PLEASE SHOW HOW I WOULD PUT IT INTO EXCEL Waterways Corporation is preparing its budget for the coming year. The first step is to plan
PLEASE SHOW HOW I WOULD PUT IT INTO EXCEL
Waterways Corporation is preparing its budget for the coming year. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers.
Sales:
Actual unit sates for November | 112,500 |
Actual unit sales for December | 102,100 |
Expected unit sales for January | 113,000 |
Expected unit sales for February | 112,500 |
Expected unit sales for March | 116,000 |
Expected unit sales for April | 125,000 |
Expected unit sales for May | 137,500 |
Unit selling price | $12 |
Waterways wants to keep 10% of the next months unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31 totaled 183,780.
Direct Materials:
The product uses metal, plastic, and rubber. In total, each unit requires 2 pounds of material at an average cost of 0.75 per pound.
Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase and 50% is paid in the month after purchase. Accounts Payable on December 31 totaled $120,595. Raw materials on December 31 totaled 11,295 pounds.
Direct Labor:
Labor requires 12 minutes per unit for completion and is paid at a rate of $18 per hour.
Manufacturing Overhead:
Indirect materials | 30 cents per labor hour |
Indirect labor | 50 cents per labor hour |
Utilities | 45 cents per labor hour |
Maintenance | 25 cents per labor hour |
Salaries | $42,000 per month |
Depreciation | $16,800 per month |
Property taxes | $2,675 per month |
Insurance | $1,200 per month |
Janitorial | $1,300 per month |
Selling and Administrative Expenses:
Variable selling and administrative cost per unit is $1.60.
Advertising | $15,000 per month |
Insurance | $1,400 per month |
Salaries | $72,000 per month |
Depreciation | $2,500 per month |
Other fixed costs | $3,000 per month |
Other Information:
The cash balance on December 31 totaled $100,500, but management has decided that it wants to maintain a cash balance of at least $800,000 beginning January 31. Dividends are paid each month at the rate of $2.50 per share for 5,000 shares outstanding. The company has an open line of credit with the First National Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 8% interest. Waterways borrows on the first day of the month and repays on the last day of the month. Reserve repayment, if required, until Waterways can pay the entire amount. A $500,000 equipment purchase is planned for February.
Instructions (Do all parts):
Note: All budgets and schedules should be prepared by month for the first quarter (January, February, and March). Round all figures to the nearest dollar. For labor hours round to whole hours.
a. Prepare a sales budget.
b. Prepare a production budget.
c. Prepare a direct materials budget.
d. Prepare a direct labor budget.
e. Prepare a manufacturing overhead budget.
f. Prepare a selling and administrative budget.
g. Prepare a schedule for expected cash collections from customers.
h. Prepare a schedule for expected payments for materials purchases.
i. Prepare a cash budget.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started