The company is preparing its budget for the coming year, 2017. The first step is to plan for the first quarter of that coming year. The following information has been gathered from their managers.

Grading guidelines are on the instruction tab.Finished Goods inventory Planning The company likes to keep 140% of the next month?s unit?s sales in finished goods ending inventory.

The company like to keep 5% of the Material need for the next month?s production in the raw materials ending.

Interest accumulates to the loan balance and is paid I full with each repayment.

Interest accumulates to the loan balance and is paid in full with each repayment.

Required:

a) Prepare a sales budget

b) Prepare a production budget.

c) Prepare a direct material budget.

d) Prepare a direct labor budget.

e) Prepare a manufacturing overhead budget.

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Sales Information Period November December January February March April May Unit selling price Units $ es 108,000 Actual 97,000 Actual 106,000 Planned 107,000 Planned 110,000 Planned 119,000 Planned 131,000 Planned 11.00 Accounts Receivable & Collections Sales on Account Collections Activity Month of Sale Month after Sale Balance at 12/31/16 $ 100% 75% 25% 185,000.00 Materials Inventory Costs & Planning Direct Materials Metal Amount Used per Unit 2 lb $ Cost 1.00 lb Accounts Payable & Disbursements Purchases on Account Payment Activity Month of Purchase Month after Purchase Balance at 12/31/16 $ 100% 45% 55% 120,000 Direct Labor & Costs Time per Unit Production Pay Rate/Hour Manufacturing Overhead Costs Variable costs per direct labor hour Indirect materials Indirect labor Utilities Maintenance Fixed costs per month Salaries Depreciation Property taxes Insurance Janitorial Selling and Administrative Costs Variable costs per unit sold Fixed costs per month Advertising $ $ $ $ $ 9 minutes. 7.00 0.25 0.45 0.45 0.25 42,000 16,800 2,675 1,200 1,300 1.45 15,000 Insurance Salaries Depreciation Other fixed costs Income Taxes Accrued on Monthly Net Income Amounts Accrued Q4 2016 paid January 2017 $ Cash and Financing Matters Cash Balance, 12/31/2016 2017 Minimum Balance Required Monthly Dividends Outstanding Shares Line of Credit Limit Borrowing Increment Required Interest Rate Draws Ronaumontr $ None $ 14,000 72,000 25,000 3,000 35% rounded to nearest dollar 200,000 90,500 720,000 2.30 per share 5,000 1,000 7% First of Month Last of Month Cash and Financing Matters Cash Balance, 12/31/2016 2017 Minimum Balance Required Monthly Dividends Outstanding Shares Line of Credit Limit Borrowing Increment Required Interest Rate Draws Repayments $ $ None $ 90,500 720,000 2.30 per share 5,000 1,000 7% First of Month Last of Month Additional Item Fixed Asset Purchase Month $ 450,000 February Sales Information Period November December January February March April May Unit selling price Units $ es 108,000 Actual 97,000 Actual 106,000 Planned 107,000 Planned 110,000 Planned 119,000 Planned 131,000 Planned 11.00 Accounts Receivable & Collections Sales on Account Collections Activity Month of Sale Month after Sale Balance at 12/31/16 $ 100% 75% 25% 185,000.00 Materials Inventory Costs & Planning Direct Materials Metal Amount Used per Unit 2 lb $ Cost 1.00 lb Accounts Payable & Disbursements Purchases on Account Payment Activity Month of Purchase Month after Purchase Balance at 12/31/16 $ 100% 45% 55% 120,000 Direct Labor & Costs Time per Unit Production Pay Rate/Hour Manufacturing Overhead Costs Variable costs per direct labor hour Indirect materials Indirect labor Utilities Maintenance Fixed costs per month Salaries Depreciation Property taxes Insurance Janitorial Selling and Administrative Costs Variable costs per unit sold Fixed costs per month Advertising $ $ $ $ $ 9 minutes. 7.00 0.25 0.45 0.45 0.25 42,000 16,800 2,675 1,200 1,300 1.45 15,000 Insurance Salaries Depreciation Other fixed costs Income Taxes Accrued on Monthly Net Income Amounts Accrued Q4 2016 paid January 2017 $ Cash and Financing Matters Cash Balance, 12/31/2016 2017 Minimum Balance Required Monthly Dividends Outstanding Shares Line of Credit Limit Borrowing Increment Required Interest Rate Draws Ronaumontr $ None $ 14,000 72,000 25,000 3,000 35% rounded to nearest dollar 200,000 90,500 720,000 2.30 per share 5,000 1,000 7% First of Month Last of Month Cash and Financing Matters Cash Balance, 12/31/2016 2017 Minimum Balance Required Monthly Dividends Outstanding Shares Line of Credit Limit Borrowing Increment Required Interest Rate Draws Repayments $ $ None $ 90,500 720,000 2.30 per share 5,000 1,000 7% First of Month Last of Month Additional Item Fixed Asset Purchase Month $ 450,000 February

Answer rating: 100% (QA)

a Sales budget January February March Total Unit sales 106000 107000 110000 323000 Unit selling pric... View the full answer