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Requirement 8. Prepare a combined cash budget. (If a box is not used in the table leave the box empty; do not enter a zero. Use parentheses or a minus sign for negative cash balances and financing payments.)

Dalton Manufacturing

Combined Cash Budget

For the Quarter Ended March 31

		January
	Beginning cash balance	$4,460
	Plus: Cash collections	247240
	Total cash available	251700
	Less: cash payments:
	Direct material purchases	i
	Direct labor
	Manufacturing overhead costs
	Operating expenses
	Tax payment
	Equipment purchases
	Total cash payments
	Ending cash balance before financing
	Financing:
	Plus: New borrowings
	Less: Debt repayments
	Less: Interest payments
	Total financing
	Ending cash balance

a.

Actual sales in December were

$ 76 comma 000$76,000.

Selling price per unit is projected to remain stable at

$ 9$9

per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

January. . . . . . . . .	$80,100
February. . . . . . . .	$89,100
March. . . . . . . . . .	$82,800
April. . . . . . . . . . . .	$85,500
May. . . . . . . . . . . .	$77,400

b.

Sales are

3030%

cash and

7070%

credit. All credit sales are collected in the month following the sale.

c.

DaltonDalton

Manufacturing has a policy that states that each month's ending inventory of finished goods should be

1010%

of the following month's sales (in units).

d.

Of each month's direct material purchases,

2020%

are paid for in the month of purchase, while the remainder is paid for in the month following purchase.

TwoTwo

pounds of direct material is needed per unit at

$ 1.50$1.50

per pound. Ending inventory of direct materials should be

20 %20%

of next month's production needs.

e.

Most of the labor at the manufacturing facility is indirect, but there is some direct labor incurred. The direct labor hours per unit is

0.030.03.

The direct labor rate per hour is

$ 13$13

per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as follows:

January. . . . . . . . .	$3,510
February. . . . . . . .	$3,834
March. . . . . . . . . .	$3,600

f.

Monthly manufacturing overhead costs are

$ 6 comma 500$6,500

for factory rent,

$ 2 comma 900$2,900

for other fixed manufacturing expenses, and

$ 1.40$1.40

per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred.

g.

Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January,

DaltonDalton

Manufacturing will purchase equipment for

$ 5 comma 800$5,800

(cash), while February's cash expenditure will be

$ 11 comma 600$11,600

and March's cash expenditure will be

$ 15 comma 800.$15,800.

h.

Operating expenses are budgeted to be

$ 1.20$1.20

per unit sold plus fixed operating expenses of

$ 1 comma 400$1,400

per month. All operating expenses are paid in the month in which they are incurred. No depreciation is included in these figures.

i.

Depreciation on the building and equipment for the general and administrative offices is budgeted to be

$ 4 comma 500$4,500

for the entire quarter, which includes depreciation on new acquisitions.

j.

DaltonDalton

Manufacturing has a policy that the ending cash balance in each month must be at least

$ 4 comma 400$4,400.

It has a line of credit with a local bank. The company can borrow in increments of

$ 1 comma 000$1,000

at the beginning of each month, up to a total outstanding loan balance of

$ 125 comma 000$125,000.

The interest rate on these loans is

11%

per month simple interest (not compounded). The company would pay down on the line of credit balance

in

increments of

$ 1 comma 000$1,000

if it has excess funds at the end of the quarter. The company would also pay the accumulated interest at the end of the quarter on the funds borrowed during the quarter.

k.

The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays

$ 10 comma 800$10,800

cash at the end of February in estimated taxes.

Dalton Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Dalton Manufacturing's operations: (Click the icon to view the data.) (Click the icon to view additional data.) Read the requirements and March, and for the quarter in total. X Data Table Current Assets as of December 31 (prior year) Cash $ 4,460 $ 49,000 rter $ 15,700 Accounts receivable, net Inventory Property, plant, and equipment, net Accounts payable Capital stock $ 121,500 5,600 1,640 7,240 $ 43,000 $ 124,500 ars/ Selling price per unit.) Retained earnings $ 23,100 Print Done Month Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Dalton Manufacturing Cash Collections Budget For the Quarter Ended March 31 Month January February March Quarter Cash sales $24,030 $26,730 $24,840 $75,600 Credits sales 53,200 56,070 62,370 171,640 Total cash collections $77,230 $82,800 $87,210 $247,240 Requirement 2. Prepare a production budget. (Hint: Unit sales - Sales in dollars / Selling price per unit.) Dalton Manufacturing Production Budget For the Quarter Ended March 31 Month January February March Quarter Unit sales 8,900 9,900 9,200 28,000 Plus: Desired ending inventory 990 920 950 950 Total needed 9,890 10,820 10,150 28,950 890 990 920 890 Less: Beginning inventory Units to produce 9,000 9,830 9,230 28,060 1. Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Dalton Manufacturing Direct Materials Budget For the Quarter Ended March 31 Month January February March Quarter Units to be produced 9,000 9,830 9,230 28,060 Multiply by: Quantity (pounds) of DM needed per unit 2 2 2 2 Quantity (pounds) needed for production 18,000 19,660 18,460 56,120 Plus: Desired ending inventory of DM 3,932 3,692 3,764 3,764 23,352 21,932 3,600 22,224 3,692 59,884 3,600 3,932 Total quantity (pounds) needed Less: Beginning inventory of DM Quantity (pounds) to purchase Multiply by: Cost per pound Total cost of DM purchases 18,532 56,284 18,332 $1.50 19,420 $1.50 $1.50 $1.50 $27,498 $29,130 $27,798 $84,426 Requirement 4. Prepare a cash payments budget for the direct material purchases from Requirement 3 (Use the accounts payable balance at December 31 of prior year for the prior month payment in January.) (Round your answers to the nearest whole dollar.) Dalton Manufacturing Cash Payments for Direct Materials Budget For the Quarter Ended March 31 Month January February March Quarter 20% of current month DM purchases $5,500 $5,826 $5,560 $16,886 80% of last month's DM purchases 43,000 21,998 23,304 88,302 Total cash payments $48,500 $27,824 $28,864 $105,188 Requirement 5. Prepare a cash payments budget for direct labor. Dalton Manufacturing Cash Payments for Direct Labor Budget For the Quarter Ended March 31 Month January February March Quarter Total cost of direct labor $3,510 $3,834 $3,600 $10,944 Requirement 6. Prepare a cash payments budget for manufacturing overhead costs. (Round your answers to the nearest whole dollar.) Dalton Manufacturing Cash Payments for Manufacturing Overhead Budget For the Quarter Ended March 31 Month January February March Quarter Variable manufacturing overhead costs $12,600 $13,762 $12,922 $39,284 Rent (fixed) 6,500 6,500 6,500 19,500 Other fixed MOH 2,900 2,900 2,900 8,700 Cash payments for manufacturing overhead $22,000 $23,162 $22,322 $67,484 Requirement 7. Prepare a cash payments budget for operating expenses. (Round your answers to the nearest whole dollar.) Dalton Manufacturing Cash Payments for Operating Expenses Budget For the Quarter Ended March 31 Month January February March Quarter Variable operating expenses $10,680 $11,880 $11,040 $33,600 Fixed operating expenses 1,400 1,400 1,400 4,200 Cash payments for operating expenses $12,080 $13,280 $12,440 $37,800