***Need Help with finishing the direct material budget and the cash disbursements budget.

. Support information is attached. Background info:*****

November of 20x0, and the group was discussing preparation of the firm's master budget for 20x1. "I've decided to go ahead and purchase the industrial robot we've been talking about. We'll make the acquisition on January 2 of next year, and I expect it will take most of the year to train the personnel and reorganize the production process to take full advantage of the new equipment."

In response to a question about financing the acquisition, Vaughn replied as follows: "The robot will cost $1,260,000. We'll finance it with a one-year $1,260,000 loan from Shark Bank and Trust Company. I've negotiated a repayment schedule of four equal installments on the last day of each quarter. The interest rate will be 10 percent, and interest payments will be quarterly as well." With that the meeting broke up, and the budget process was on.

Frame-It Company is a manufacturer of metal picture frames. The firm's two product lines are designated as S (small frames; 5 7 inches) and L (large frames; 8 10 inches). The primary raw materials are flexible metal strips and 9-inch by 24-inch glass sheets. Each S frame requires a 2-foot metal strip; an L frame requires a 3-foot strip. Allowing for normal breakage and scrap glass, Frame-It can get either four S frames or two L frames out of a glass sheet. Other raw materials, such as cardboard backing, are insignificant in cost and are treated as indirect materials. LaKendra Jackson, Frame-It's controller, is in charge of preparing the master budget for 20x1. She has gathered the following information:

1. Sales in the fourth quarter of 20x0 are expected to be 70,000 S frames and 60,000 L frames. The sales manager predicts that over the next two years, sales in each product line will grow by 6,000 units each quarter over the previous quarter. For example, S frame sales in the first quarter of 20x1 are expected to be 76,000 units.
2. Frame-It's sales history indicates that 70 percent of all sales are on credit, with the remainder of the sales in cash. The company's collection experience shows that 80 percent of the credit sales are collected during the quarter in which the sale is made, while the remaining 20 percent is collected in the following quarter. (For simplicity, assume the company is able to collect 100 percent of its accounts receivable.)
3. The S frame sells for $14, and the L frame sells for $18. These prices are expected to hold constant throughout 20x1.
4. Frame-It's production manager attempts to end each quarter with enough finished-goods inventory in each product line to cover 20 percent of the following quarter's sales. Moreover, an attempt is made to end each quarter with 20 percent of the glass sheets needed for the following quarter's production. Because metal strips are purchased locally, Frame-It buys them on a just-in-time basis; inventory is negligible.

3. Prepare Frame-It Company's production budget for Q4(20x0) and 20x1. 0 Answer is complete and correct. S frames: Sales (in units) 70,000 9 76,000 9 82,000 9 88,000 9 94,000 9 340,000 Add: Desired ending inventory 15,200 9 16,400 9 17,600 9 18,800 9 20,000 9 20,000 9 Total units needed 85,200 92,400 99,600 106,800 114,000 360,000 Less: Expected beginning inventory 14,000 9 15,200 9 16,400 9 17,600 9 18,800 9 15,200 9 Units to be produced 71,200 77,200 83,200 89,200 95,200 344,800 L frames: Sales (in units) 60,000 9 66,000 0 72,000 0 78,000 0 84,000 9 300,000 Add: Desired ending inventory 13,200 9 14,400 9 15,600 9 16,800 9 18,000 9 18,000 9 Total units needed 73,200 80,400 87,600 94,800 102,000 318,000 Less: Expected beginning inventory 12,000 9 13,200 0 14,400 0 15,600 0 16,800 9 13,200 0 Units to be produced 61,200 67,200 73,200 79,200 85,200 304,800 Required: 1. Prepare Frame-It Company's sales budget for 04(20x0) and 20x1 S frame unit sales 9 Answer is complete and correct. 76,000 9 82,000 9 x S sales price 8 frame sales revenue L frame unit sales $ $ 149 $ 1,064,000 66,000 9 $ 149 $ 1,148,000 $ 4,760,000 300,000 staIesprice $ 189$ 189$ 189$ 189$ 189$ 189 Lframe sales revenue $ 1,080,000 $ 1,188,000 $ 1,296,000 $ 1,404,000 $ 1,512,000 $ 5,400,000 Total sales revenue $ 2,060,000 $ 2,252,000 $ 2,444,000 $ 2,636,000 $ 2,828,000 $ 10,160,000 Cash sales\" as 618,000 9 $ 675,600 9 $ 733,200 9 $ 790,800 9 $ 848,400 9 $ 3,048,000 Sales on accountT 1,442,000 9 1,576,400 9 1,710,800 9 1,845,200 9 1,979,600 9 7,112,000 '30% of total sales. 170% of total sales. 2. Prepare Frame-It Company's cash receipts budget for 20x1. 0 Answer is complete and correct. Cash sales $ 675,600 9 $ 733,200 9 $ 790,800 0 $ 848,400 9 $ 3,048,000 Cash collections from credit sales made during current quarter" 1,261,120 0 1,368,640 0 1,476,160 0 1,583,680 0 5,689,600 Cash collections from credit sales made during previous quarter'l' 288,400 0 315,280 a 342,160 a 369,040 0 1,314,880 Total cash receipts $ 2125420 $ 14171120 $ 25091120 $ 2301'\" $10 052 480 *80% of current quarter's credit sales. 120% of previous quarter's credit sales. 4. Frame-It's production manager attempts to end each quarter with enough nished-goods inventory in each product line to cover 20 percent of the following quarter's sales. Moreover, an attempt is made to end each quarter with 20 percent of the glass sheets needed for the following quarter's production. Because metal strips are purchased locally, Frame-It buys them on ajustin-time basis; inventory is negligible 5. All of Frame-It's direct-material purchases are made on account, and 80 percent of each quarter's purchases are paid in cash during the same quarter as the purchase. The other 20 percent is paid in the next quarter. 6. Indirect materials are purchased as needed and paid for in cash. Workinprocess inventory is negligible 7. Projected production costs in 20x1 are as follows: 5 Frame L Frame Direct material: Metal strips: 5: 2 feet @ $2 per foot $ 4 L: 3 feet @ $2 per foot $ 6 Glass sheets: 5: a sheet @ $12 per sheet 3 L: 1; sheet @ $12 per sheet 6 Direct labor: 0.1 hour @ $2I 2 2 Production overhead: 0.1 directlabor hour x $10 per hour 1 1 Total production cost per unit $ 10 $ 15 8. The predetermined overhead rate is $10 per direct-labor hour. The following production overhead costs are budgeted for 20x1. lst Quarter 2nd Quarter 3rd Quarter 4th Quarter Entire Year Indirect material $ 14,740 $ 15,740 $ 16,74! $ 17,740 $ 64,960 Indirect labor 55,660 59,660 63,660 67,660 246,640 Other overhead 44,000 49,IIO 54,000 59,0I0 206,000 Depreciation 33,000 33,000 33,000 33,000 132,000 Total overhead $ 147,400 $ 157,4I0 $ 167,40I $ 177,4I0 $ 649,60 8. The predetermined overhead rate is $10 per direct-labor hour. The following production overhead costs are budgeted for 20x1. lst Quarter 2nd Quarter 3rd Quarter 4th Quarter Entire Year Indirect material $ 14,74I $ 15,740 $ 16,740 $ 17,740 $ 64,960 Indirect labor 55,660 59,660 63,660 67,660 246,640 Other overhead 44,00I 49,000 54,000 59,000 206,000 Depreciation 33,000 33,000 33,000 33,000 132,000 Total overhead $ 147,40I $ 157,4I0 $ 167,400 $ 177,400 $ 649,600 All of these costs will be paid in cash during the quarter incurred except for the depreciation charges. 9. Frame-It's quarterly selling and administrative expenses are $113,000, paid in cash. 10. Jackson anticipates that dividends of $63,000 will be declared and paid in cash each quarter. 11. FrameIt's projected balance sheet as of December 31, 20x0, follows: Cash $ 108,009 Accounts receivable 150,000 Inventory: Raw material 126,960 Finished goods 350,000 Plant and equipment (net of accumulated depreciation) 9,300,000 Total assets $ 10,934,969 Accounts payable $ 110,320 Common stock 6,300,009 Retained earnings 3,624,640 Total liabilities and stockholders' equity $ 10,I34,96I Required information Year Metal strips: S frames to be produced 0 x Metal quantity per unit (feet) Needed for S frame production 0 0 0 0 0 O L frames to be produced 0 x Metal quantity per unit (feet) Needed for L frame production 0 0 0 0 0 O Total metal needed for production; to be purchased (feet) O x Price per foot Cost of metal strips to be purchased $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Glass sheets: S frames to be produced 0 x Glass quantity per unit (sheets) Needed for S frame production 0 0 0 0 0 O L frames to be produced 0 x Glass quantity per unit (sheets) Needed for L frame production 0 0 0 0 0 O Total glass needed for production (sheets) 0 0 0 0 0 O Add: Desired ending inventory 14, 180 Total glass needs 0 0 0 0 0 14, 180 Less: Expected beginning inventory Glass to be purchased 0 0 0 0 0 14, 180 x Price per glass sheetRaw-material purchases: Cash payments for purchases during the current quarter Cash payments for purchases during the preceding quarter Total cash payments for raw-material purchases $ 0 $ 0 $ 0 $ 0 $ Direct labor: Frames produced (S and L) 0 Direct-labor hours to be used 0 O O 0 0 x Rate per direct-labor hour Total cash payments for direct labor Production overhead: Indirect material Indirect labor Other Total cash payments for production overhead Cash payments for selling and administrative expenses Total cash disbursements $ 0 0 0 $ 0$ 0$ 0$ 0$ 0 :i:i:i:lE $ 0$ 0$ 0$ 0$ 0