Problems (Group B) P9-65B Comprehensive budgeting problem (Learning Objectives 2 & 3) Osborne Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Osborne Manufacturing's operations: Current assets as of December 31 (prior year): Cash ....... 4,640 Accounts receivable, net....- $ 57,600 Inventory ..... $ 15,600 Property, plant, and equipment, net .......- $121,500 e. Monthly manufacturing conversion costs are $4,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. Accounts payable ....... $ 42,800 No depreciation is included in these figures. All expenses are paid in the month in Capital stock ....... $124,500 which they are incurred. $ 22,800 f. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Osborne Manufacturing will purchase equipment for $6,000 (cash), a. Actual sales in December were $72,000. Selling price per unit is projected to remain while February's cash expenditure will be $12,800, and March's cash expenditure will stable at $12 per unit throughout the budget period. Sales for the first five months of be $15,600 the upcoming year are budgeted to be as follows: g. Operating expenses are budgeted to be $1.30 per unit sold plus fixed operating expenses of $1,800 per month, All operating expenses are paid in the month in which January .......... they are incurred. February..... $104,400 h. Depreciation on the building and equipment for the general and administrative offices is March .... $108,000 budgeted to be $4,600 for the entire quarter, which includes depreciation on new $112,800 acquisitions. April...... $109,200 i, Osborne Manufacturing has a policy that the ending cash balance in each month must $105,600 be at least $4,200. The company has a line of credit with a local bank. It can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan b. Sales are 20% cash and 80% credit. All credit sales are collected in the month follow- balance of $130,000. The interest rate on these loans is 2% per month simple interest ing the sale. (not compounded). Osborne Manufacturing pays down on the line of credit balance if it c. Osborne Manufacturing has a policy that states that each month's ending inventory of has excess funds at the end of the quarter. The company also pays the accumulated finished goods should be 10% of the following month's sales (in units). interest at the end of the quarter on the funds borrowed during the quarter. d. Of each month's direct material purchases, 20% are paid for in the month of purchase, The company's income tax rate is projected to be 30% of operating income less interest while the remainder is paid for in the month following purchase. Three kilograms of expense. The company pays $10,800 cash at the end of February in estimated taxes. direct material is needed per unit at $2.00 per kilogram, Ending inventory of direct materials should be 30% of next month's production needs