Budget Problem (75 Points) 1. Projected unit sales: June sales 120,000, July sales 130,000, August 140,000, September 150,000 and October sales 170,000. 2. Sales price per unit, $15.00 3. Units in ending inventory each month should equal 10% of next month sales. 4. Raw material required per unit is 2 pounds; cost is $3.00 per lb. 5. Ending inventory required at the end of each month is 5% of next month needs. 6. Direct labor required to produce one units is .25 direct labor hour. The hourly rate is $10.00. 7. Sales and administrative expenses are projected to be: salaries $275, 000 per month, commissions 2% of sales dollars and other expenses are expected to be $75,000 per month plus 3% of sales dollars. 8. Forty percent of the sales are collected in the month of sales and 60 percent in the month following. 9. Thirty percent of raw materials purchases are paid in in the month of purchase and 70 percent in the month following. 10. Manufacturing overhead costs: a. Indirect labor, $3.00 per direct labor hour, b. Indirect materials are $1.00 per unit produced, c. Utilities are $1.00 per direct labor hour, d. Maintenance cost are $0.50 per direct labor hour, e. Supervisor salaries are $40,000 per month, f. Depreciation is $10,000 per month, g. Property taxes are $5,000 per month, h. Insurance is $7,000 per month, and i. Fixed maintenance cost is $10,000 per month. Other pertinent information: a. Beginning cash balance is $100,000 b. Beginning accounts payable balance is $530,000.

For the quarter ending September 30th provide answers for the following:

8. Cash balance at September 30th

9. Contribution margin, 10.

Net operating income,

11. Breakeven sales dollars,

12. Sales dollars needed to earn a net operating income of $400,000,

13. Ending accounts receivable balance,

14. Predetermined manufacturing overhead rate using direct labor hours as the activity, and

15. Ending accounts payable balance for raw materials.

hapter o8 1. Sales in Units and Dollars 10000 2. Units Produced 11,133 3. Cost A Raw Material $70,200.00 4. Direct Labor Cost $27,833.33 5. Manufacturing Overhead Cost $95,658.33 6. Sales and Administration cost $357,500.00 7. Cost of ending finished goods inventory 551191.6667