Question

Weygandt, Accounting Principles, 13e Help I System Announcements CAL CULATOR PRINTER VERSION BACK NEX Question 2 Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 Unit sales for December 2019 Expected unit sales for January 2020 Expected unit sales for February 2020 Expected unit sales for March 2020 Expected unit sales for April 2020 Expected unit sales for May 2020 Unit selling price 112,000 102,000 114,000 112,000 117,000 124,000 139,000 $12 waterways likes to keep 10% of the next month's 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, 2019, totaled $183,600. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,380 pounds. Payment for materials is made within 15 days. 509% is paid in th month of purchase, and 50% is paid in th totaled $103,730. e month after purchase. Accounts Payable on December 31, 2019, Weygandt, Accounting Principles, 13e Help I System Announcements CALCULATOR PRINTER VERSION Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Property taxes Insurance Maintenance 30 per labor hour 500 per labor hour 404 per labor hour 20c per labor hour $42,000 per month $16,300 per month $2,700 per month $1,300 per month $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50. $15,000 a month $1,400 a month $70,000 a month $2,200 a month $2,800 a month Advertising Insurance Salaries Depreciation Other fixed costs S Weyndt Accounting Principles, 13e Help 1 System Announcements CALCULATOR PRINTER VERSION BACK NEXT Other Information The Cash balance on December 31, 2019, totaled $103,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.30 per share for 4,960 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. waterways borrows on the first day of the month and repays on the last day of the month. A $510,000 equipment purchase is planned for February Your answer is correct. For the first quarter of 2020, prepare a sales budget WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 First Quarter January February March Quarter Expected Unit Sales 11200 1 17000 343000 Unit Selling Price 12 12 14040 1344000 1368000 Total Sales 4116000 CALCULATOR PRINTER VERSION BACK NEXT Your answer is correct For the first quarter of 2020, prepare a production budget WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 First Quarter January February March Quarter 117000 Expected Unit Sales Add . Desired Ending Finished Goods Unitv Total Required Units Less ' | | Beginning Finished Goods Unit Required Production Units Click if you would like to Show Work for this question: Open Show Work 114000 112000 12400 11700 123700 11200 112500 11200 129400 125200 11400 113800 11700 344000 117700 SHOW ANSWER SHOW SOLUTION LINK TO TEXT LINK TO TEXT LINK TO TEXT New Tab a t Weygandt, Accounting Principles, 13e nts CALCULATOR PRINTER VERSION 'BACK HER For the first quarter of 2020, prepare a direct materials budget. (Round cost per pound to 2 decimal places e.g. 0.25 and all other answers to 0 decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2020 First Quarter JanuaryfebruaryM MarchQuarter Units to be Produced 113800 1125 Direct Materials Per Unit Total Pounds Required for Production 2276 225000 , L Desired Ending Inventory 5625 5885 6200 30885 241600 Total Materials Required 233225 563 5625 5885 LessBeginning Materials Inventory 235715 227590 225260 Direct Materials Purchases 0.80 Cost Per Pound 188572 180208 182072 Total Cost of Direct Materials Purchases Click if you would like to Show Work for this question: Oen Show Work

Answer 1

WATERWAYS CORPORATION
Direct Materials Budget
For the first quarter of 2020
	January	February	March	Quarter
Units to be produced	113800	112500	117700	344000
Direct Materials per unit	2	2	2	2
Total Pounds required for Production	227600	225000	235400	688000
Add : Desired Ending Inventory	11250	11770	12550	12550
Total Materials Required	238850	236770	247950	700550
Less : Beginning Materials Inventory	11380	11250	11770	11380
Direct Materials Purchases	227470	225520	236180	689170
Cost per pound	$0.80	$0.80	$0.80	$0.80
Total cost of Direct Material Purchases	$181,976.00	$180,416.00	$188,944.00	$551,336.00
Working
Material required for Production in April-2020 and desired inventory as of March-31
Expected unit sales for April-2020	124000
Add : Ending Inventory (10% of 139000 units)	13900
Less : Beginning Inventory (10% of 124000 units)	12400
Units to be produced	125500
Direct Materials per unit	2
Total Pounds required for Production	251000
Desired Ending Inventory as of March end (5%)	12550