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
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
Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale.
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)
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.
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
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.
Computer equipment for the…