D E G H 5 Unit selling price 63.00 The 2020 unit prices will not change for the first two quarters of 2021 8 Estimated sales in units are as follow 9 Actual 2020 Estimated 2021 10 November 9,800 January 10,700 11 December 10,700 February 10,200 12 March 13,000 13 April 9,800 14 May 12,400 15 b. The company produced enough units each month to meet the month's sales plus a desired inventory level that is based on the following 16 months estimated 17 18 Desired finished goods Inventory level 20% 19 20 Bnished goods inventory at the end of 2020 21 Units 2,140 22 Priceperunt $ 33.00 23 The company purchas enough w materiach month for the current month's production requirement and a percentage of 24 what will be needed in the following month's production 25 26 Desired raw materials inventory 20% 27 28 Fachunt requires 5.00 p 29 AM Unico $ 0.60 30 31 Raw Materials inventory at the end of 2020 32 units 10.500 33 34 Raw materials purchase policies 35 Amount padin current month 40X 36 Amo pardin following month GON 37 38. Direct about horrired for one unit of production 39 Direct labour hours required 1.25 hours 40 Direct labour cost per hour $ 16.00 41 42 Variable manufacturing overhead is allocated on the basis of direct labour cost 43 Predeterminal Deerhead Rate SON D F G H C . Variable manufacturing overhead is allocated on the basis of direct labour cost, Predetermined Overhead Rate SON The company has the following cash/credit sales policy Proportion of cash sales 10% Proportion of credit sales collected in following month 45% proportion of credit sales collected 2 months 8 later 55% 19 Rued overhead couts (per month) 51 Factory supervisor salary $ 75,400 52 Factory insurance $ 1,350 53 Factory rent S 7,550 54 Depreciation of factory equipment $ 1,150 55 56 Total monthly fixed selling and administrative expenses 57 Advertising 1,200 58 Depreciation 5 1,150 59 Insurance 5 1,150 60 Salaries $ 1,250 61 Other $ 1,150 62 63 Variable selling and administrative expenses 64 Shipping costs 3.90 per unit 65 Commissions 8% of sales 66 67 The company will acquire the following assets at the end of January 68 Furniture and equipment for the sales offices 515,000 69 Monthly depreciation expense 10,300 70 The acquisition of this furniture and equipment was contracted a year 71 colier and was in a contractual obligation to proceed with the purchase 72 73 74 The balance sheet us at December 31, 2020 75 + 76 Assets 77 Cash $ 75.000 78 Accounts receivable 5 912,303 79 Inventory:Raw materials 5 6,360 80 Finished goods $ 70,6205 76,980 81 Pant and equipment $ 965,000 4k The balance sheet as at December 31, 2020 5 6 Assets 7 Cash $ 75,000 8 Accounts receivable $ 912,303 19 Inventory: Raw materials $ 6,360 30 Finished goods $ 70,620 $ 76,980 31 Plant and equipment $ 965,000 132 Less Accumulated Depreciation $ 96,500 $ 868,500 83 Total Assets $ 1,932,783 84 85 abilities and Equity 86 Accounts payable $ 25,000 87 6% long term notes payable $ 880,000 88 Common shares S 710,000 89 Retained earnings $ 317,783 90 Total liabilities and shareholders' equity $ 1,932,783 91 921 93 Interest rate on debt (monthly, simple interest) 0.50% 94 Minimum cash balance $30,000 95 96 97 Additional information 98 Nicah payments except purchases of raw materials are made monthly as incurred. All borrowings occur at the beginning of each month and all repayments occur at the end of the month. Borrowings and repayments may 99 occur in any amount 100 l interest on borrowed funds is paid at the end of each month at a rate of 0.5% per month 101 A minimum cash balance of 530,000 is required at the end of each month. 102 All accounts payable is from the purchase of raw materials, all other payments are made in cath 103 104 105 106 107 108 109 110 111 112 113 114 Data Reg. 10-11 RM D Required: Assume variable costing for all parts except Part 3 1. Prepare the following budgets for each of the first three months of 2021: a. Sales budget b. Production budget C. Raw materials purchases budget d. Direct labour and manufacturing overhead budget e. Selling and administrative expense budget f. Cash budget 2. Prepare a budgeted contribution format income statement for each of the first three months of 2021 and a budgeted balance sheet as at March 31, 2021. 3. Prepare a budgeted absorption costing format income statement for each of the first three months of 2021. Also prepare a reconciliation of absorption costing net income to variable costing net income for each of the three months