Question

Please pleeease help me. I have been struggling for 3 days to find the answer.

I NEED ANSWER FOR Budgeted Manufacturing Cost per Unit account and Budgeted Income statement and balance sheet. Please show calculations if possible. Thank you Current assets as of December 31 (prior year):  

     Cash $4,650.00, Accounts receivable, net $57,600.00, Inventory   $15,600.00; Property, plant, and equipment, net $121,500.00; Accounts payable   $42,800.00;   Capital stock $124,500.00; Retained earnings   $22,800.00

A:            Actual Sales in December were$72,000. Selling price per unit projected to remain stable at $12 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follow: January    $ 104,400    , February $ 108,000 , March $ 112,800 , April $ 109,200, May $ 105,600

B:            Sales are 20% cash and 80% credit. All credit sales are collected in the months following the sale.                                                 

C:            the company has a policy that states that each months ending inventory of finished goods should be 10% of the following month's sales (in units)                             

D:            Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. 3kg of direct material is needed at $2.00 per kg. Ending inventory of direct materials should be 30% of next month's production needs

E;             Monthly manufacturing conversion costs Factory rent $ 4,500.00, Other fixed manufacturing expenses $ 2,800.00, Variable manufacturing overhead ($1.10 per unit) $ 1.10, No depreciation is included in these figures. All expenses are paid in the month in which they are incurred

F:    Computer equipment for administrative offices will be purchased in the upcoming quarter incurred, In January, Osborne Manufacturing will purchase January purchase - equipment for $6000 (cash). February cash expenditure will $ 12,800.00, March cash expenditure $15,600.00

g:             Operating expenses are budgeted to be $1.30 per unit sold     $ 1.30 , Plus fixed operating expenses of 1800 per month      $ 1,800.00. All operating expenses are paid in the month in which they are incurred.

H:      Depreciation on the building and equipment for the general administrative offices is budgeted to $4600 for the entire quarter, which includes depreciation on new acquisitions. Depreciation on the building and equipment budget $4,600.00

I:              The Company has a policy that the ending cash balance in each month must be at least $4200, The Company has a line of credit with a local bank. It can borrow increments of $1000 at the beginning of each month up to a total outstanding loan balance of $130,000. The interest rate on these loans is 2% per month simple interest. The company pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the      J:      The company's income tax is projected to be 30% of operating income less interest expense. The company pays $10800 cash at the end of February in estimated taxes   

Answer 1

Cash collection budget
	January	February	March	Quarter
Cash sales	20880	21600	22560	65040
Credit sales	57600	83520	86400	227520
Total cash collections	78480	105120	108960	292560

January

Cash = 104400*20% =20880

Credit = 72000*80% =5700

February

Cash = 108000*20% =21600

Credit = 104400*80% =83520

March

Cash = 112800*20% =22560

Credit = 108000*80% =86400

Production budget
	January	February	March	Quarter
Unit sales	8700	9000	9400	27100
Plus: Desired ending inventory (next month’s unit sales *10%)	900	940	910	910
Total needed	9600	9940	10310	28010
Less: Beginning inventory (current month’s unit sales *10%)	870	900	940	870
Number of units to produce	8730	9040	9370	27140

January

Unit sales = 104400/12 = 8700

February

Unit sales = 108000/12 = 9000

March

Unit sales = 112800/12 = 9400

April

Unit sales = 109200/12 = 9100

Direct materials budget
	January	February	March	Quarter
Units to be produced	8730	9040	9370	27140
Multiply by: Quantity (pounds) of DM needed per unit	3	3	3	3
Quantity (pounds) needed for production	26190	27120	28110	81420
Plus: Desired ending inventory of DM (next month’s quantity needed for production *30%)	8136	8433	8163	8163
Total quantity (pounds) needed	34326	35553	36273	89583
Less: Beginning inventory of DM	7857	8136	8433	7857
Quantity (pounds) to purchase	26469	27417	27840	81726
Multiply by: cost per pound	2	2	2	2
Total cost of DM purchases	52938	54834	55680	163452

Units to be produced in April = 9100+(105600/12*10%)-910 = 9070

Quantity (pounds) needed for production in April = 9070*3 =27210

Cash payments for direct materials purchase
	January	February	March	Quarter
December purchases (From Accounts Payable)	42800			42800
January purchases	10588	42350		52938
February purchases		10967	43867	54834
March purchases			11136	11136
Total payments	53388	53317	55003	161708

January

52938*20% = 10588

52938*80% = 42350

February

54834*20% = 10967

54834*80% = 43867

March

55680*20% = 11136

Cash payments for manufacturing overhead budget
	January	February	March	Quarter
Rent (fixed)	4500	4500	4500	13500
Other MOH (fixed)	2800	2800	2800	8400
Variable manufacturing overhead costs (unit to be produced *1.10)	9603	9944	10307	29854
Total disbursements	16903	17244	17607	51754

Cash payments for operating expense budget
	January	February	March	Quarter
Variable operating expenses (unit sales *1.30)	11310	11700	12220	35230
Fixed operating expenses	1800	1800	1800	5400
Total payments for operating expenses	13110	13500	14020	40630

Combine cash budget
	January	February	March	Quarter
Cash balance, beginning	4650	4729	5188	4650
Plus: cash collections	78480	105120	108960	292560
Total cash available	83130	109849	114148	297210
Less cash payments:
DM purchases	53388	53317	55003	161708
MOH costs	16903	17244	17607	51754
Operating expenses	13110	13500	14020	40630
Tax payment		10800		10800
Equipment purchases	6000	12800	15600	34400
Total cash payments	89401	107661	102230	299292
Ending cash before financing	(6271)	2188	11918	(2082)
Financing:
Borrowings	11000	3000		14000
Repayments			(6000)
Interest payments			(780)	(6000)
Total financing	11000	3000	(6780)	7220
Cash balance, ending	4729	5188	5138	5138

Budgeted Manufacturing Cost per Unit
Direct materials cost per unit	$6.00
Variable manufacturing costs per unit	$1.10
Fixed manufacturing overhead per unit	$0.80
Cost of manufacturing each unit	$7.90

(13500+8400)/ 27140 = $0.80

Budgeted Income Statement
Sales (104400+108000+112800)	325200
Less: Cost of goods sold (27100*7.90)	(214090)
Gross profit	111110
Less: Operating expenses	(40630)
Less: Depreciation expense	(4600)
Operating income	65880
Less: interest expense	(780)
Less: income tax expense @ 30% (65880-780)*30%)	(19530)
Net income	$45570