CALCULATE THE BUDGETED MANUFACTURING COST PER UNIT (ASSUME THAT FIXED MANUFACTURING OVERHEAD IS BUDGETED TO BE $0.70 PER UNIT FOR THE YEAR) FOR JANUARY, FEBRUARY, MARCH, AND FOR THE QUARTER IN TOTAL

04 Jun CALCULATE THE BUDGETED MANUFACTURING COST PER UNIT (ASSUME THAT FIXED MANUFACTURING OVERHEAD IS BUDGETED TO BE $0.70 PER UNIT FOR THE YEAR) FOR JANUARY, FEBRUARY, MARCH, AND FOR THE QUARTER IN TOTAL

Question

Budget Assignment

Dudley Manufacturing is preparing its
master budget for the first quarter of the upcoming year. The following data pertain to Dudley
Manufacturing’s operations:

Cash $
4,500.00

Accounts receivable, net 49,000.00

Inventory 12,657.50

Property, Plant, and Equipment, net 122,500.00

Accounts Payable
42,400.00

Capital stock
126,000.00

Retained Earnings 22,920.00

a.
Actual sales in December were $70,000. Selling price per unit is projected to remain
stable at $10 per unit throughout the budget period. Sales for the first five months of the
upcoming year are budgeted to be as follows:

January $83,000

February $92,000

March $94,000

April $97,000

May $89,000

b.
Sales are 30% cash and 70%
credit. All credit sales are collected
in the month following the sale.

c.
Dudley Manufacturing has a
policy that states that each month’s ending inventory of finished goods should
be 25% of the following month’s sales (in units)

d.
Of each month’s direct material
purchases, 10% are paid for in the month of the purchase, while the remainder
is paid for in the month following purchase.
Two pounds of direct material is needed per unit at $2 per pound. Ending inventory of direct materials should be
10% 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 hour per unit
is 0.02. The direct labor rate per hour
is $10 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 $1,705

February $1,850

March $1,895

f.
Monthly manufacturing overhead
costs are $5,000 for factory rent, $3,000 for other fixed manufacturing
expenses, and $1.20 per unit produced 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, Dudley Manufacturing will
purchase equipment for $6,200 (cash), while February’s cash expenditures will
be $12,000 and March’s cash expenditure will be $16,800.

h.
Operating expenses are budgeted
to be $1.00 per unit sold plus fixed operating expenses of $1,400 per
month. All operating expenses are paid
in the month in which they are incurred.

i.
Depreciation on the building
and equipment for the general and administrative offices is budgeted to be
$4,700 for the entire quarter, which includes depreciation on new acquisitions.

j.
Dudley Manufacturing has a
policy that the ending cash balance in each month must be at least $4,000. It has a line of credit with a local
bank. The company can borrow in
increments of $1,000 at the beginning of each month, up to a total outstanding
loan balance of $160,000. The interest
rate on these loans is 2% per month simple interest (not compounded). Dudley Manufacturing would pay down on the
line of credit balance 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 $11,000 cash at the end of
February in estimated taxes.

Requirements:

Please complete project using excel
spreadsheet

Upload completed budget to “Connect” by
the due date and bring “hard” copy to class

Properly label all schedules (points
will be taken off if headings are not included)

Each schedule should include: January, February, March and Total for
Quarter

Project should include the following
schedules:

1. Schedule of Cash Collections
for January, February, March, and for the quarter in total

2. Production budget for January, February, March, and for the quarter
in total

3. Direct materials budget for January, February, March, and for the
quarter in total

4. Cash payments budget for the direct material purchases from
requirement 3 for January, February, March, and for the quarter in total

5. Cash payments budget for direct labor for January, February, March,
and for the quarter in total

6. Cash payments budget for manufacturing overhead costs for January,
February, March, and for the quarter in total

7. Cash payments budget for operating expenses for January, February,
March, and for the quarter in total

8. Cash budget for January, February, March, and for the quarter in
total

9. Calculate the budgeted manufacturing cost per unit (assume that
fixed manufacturing overhead is budgeted to be $0.70 per unit for the year) for
January, February, March, and for the quarter in total

10. Prepare a budgeted income statement for the quarter ending March 31,
xxxx – 10 points

11. Calculate ending balances as of March 31, xxxx for:

a) Accounts Receivable

b) Ending Inventory

c) Property, Plant and Equipment net of depreciation

d) Accounts Payable

e) Note Payable

f) Retained Earnings