IMPORTANT INFO TO ANSWER QUESTION:

The expected fixed manufacturing overhead costs below cover the twelve months ended December 31, 2021 and are based on actual costs to date and budgeted costs for the duration of the year. Training and development $ 47,520 Property and business taxes 36,000 Supervisors salary 89,400 Amortization on equipment 227,760 Insurance 92,460 Other 109,600 $ 602,740 a) The property and business taxes, levied by the municipality covering the calendar year, are paid in one lump sum on June 30 of each year. The expected payment for next year (2022) is $39,000.

b) The annual insurance premium is paid at the beginning of April each year, covering the subsequent 12 months, from April 1 of the current year to March 31 of the next year. The premium is expected to go up to $93,300 on April 1, 2022.

c) All other cash-related fixed manufacturing overhead costs are incurred evenly over the year, paid as incurred, and are not expected to change in 2022.

d) Altec uses the straight line method of amortization.

10)In 20x1, the average total cost to manufacture one unit was $93.90 under absorption costing.

11)Selling and administrative expenses(S&A) are known to be a mixed cost; however, there is a lot of uncertainty about what portion is fixed and what is variable. Previous experience has provided the following information: Lowest level of sales: 42,500 units Total S&A Expenses: $1,273,123 Highest level of sales: 87,500 units Total S&A Expenses: $2,493,073 These costs are paid in the month in which they occur. Not included in the above expenses are bad debt expense and the purchases discount.

12)Sales are on a cash and credit basis, with 21% collected during the month of the sale, 42% the following month, and 35% the month thereafter. 2% of sales are uncollectible (bad debt expense).

13)Sales in November and December 2021 are expected to be $1,100,000 and $1,600,000 respectively. Based on the above collection pattern this will result in accounts receivable of $1,617,000 at December 31, 2021 which will be collected in January and February, 2022.

14)During the fiscal year ending December 31, 2022, Altec will be required to make monthly income tax installment payments of $10,000. Outstanding income taxes from the year ended December 31, 2021 must be paid in March 2022. Income tax expense is estimated to be 25% of income before tax. Income taxes for the year ended December 31, 20x2, in excess of installment payments, will be paid in March, 2023.

15)Altec is planning to acquire additional manufacturing equipment for $304,750 cash. 40% of this amount is to be paid in April 2022, the rest, in May 2022. The manufacturing overhead costs shown above already include the amortization on this equipment.

16)Altec. has a policy of paying dividends at the end of each quarter. The president tells you that the board of directors is planning on continuing their policy of declaring dividends of $32,000 per quarter.

17)An arrangement has been made with the local bank that if Altec maintains a minimum balance of $15,000 in their bank account, they will be given a line of credit at a preferred rate of 5% per annum. All borrowings from and repayments to the bank must be in multiples of $1,000 and interest must be paid at the end of each month. All borrowing is considered to occur on the first day of the month, repayments on the last day of the month. Therefore, the amount subject to interest each month is the balance owing at the beginning of the month plus any amounts borrowed at the beginning of the month. Note that any amounts repaid that month do not reduce the amount subject to interest that month because they are assumed repaid on the last day of the month.

18)A listing of the estimated balances in the companys ledger accounts as of December 31, 2021 is given below (this is the ending balance sheet for 2021): Cash $ 15,680 Accounts receivable 1,617,000 Inventory-raw materials 28,050 Inventory-finished goods 28,170 Prepaid insurance 23,115 Capital assets (net) 1,328,000 $ 3,040,015 Bank loan payable $ 102,000 Accounts payable 227,800 Income tax payable 11,200 Capital stock 1,200,000 Retained earnings 1,499,010 $ 3,04,015

QUESTION:

Complete a MOH and S&A budget from this information and include an insurance budget for the year with the MOH.