Question

PLEASE, PLEASE. HELP ME I  NEED ANSWER FOR Combined Cash Budget account and Budgeted Manufacturing Cost per Unit account. 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. 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 intersest. 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 quarter                                                                                                                                            

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

Answer-
Summary of Cash receipts
	Jan	Feb	Mar	TOTAL
Sales (in units)	8700	9000	9400	27100
Sale price p.u	$                 12	$                 12	$                 12
Sales	$ 1,04,400.00	$ 1,08,000.00	$ 1,12,800.00	$ 3,25,200.00
Cash received in the month of Sale (20%)	$    20,880.00	$    21,600.00	$    22,560.00	$    65,040.00
Cash Received in the following Month (80%)		$    83,520.00	$    86,400.00	$ 1,69,920.00
Opening balance	$    57,600.00			$    57,600.00
Cash collection	$    78,480.00	$ 1,05,120.00	$ 1,08,960.00	$ 2,92,560.00
Production budget
	Jan	Feb	Mar	TOTAL
Budgeted Sales	8,700	9,000	9,400	27,100
Ending Inventory in units	900	940	910	2,750
Total Requirement	9,600	9,940	10,310	29,850
Less: Opening Inventory	870	900	940	2,710
Total Production	8,730	9,040	9,370	27,140
Direct material PurchaseBudget
	Jan	Feb	Mar	TOTAL
Units to be produced	8,730	9,040	9,370	27,140
Direct Material required per unit (in kg)	3	3	3	3
Total material required(in kg)	26,190	27,120	28,110	81,420
Add: Desired ending direct materals ( in kg)	2,712	2,811	2,721	8,244
Total material required	28,902	29,931	30,831	89,664
Less: opening inventory	2,619	2,712	2,811	8,142
Total Material to be purchased	26,283	27,219	28,020	81,522
Cost per kg	$                    2	$                    2	$                    2	$                    2
Total Cost of Material purchased	$          52,566	$          54,438	$          56,040	$      1,63,044
Statement showing cash disbursements for the year
Description	1	2	3	Total
Total Cost of Material purchased	$          52,566	$          54,438	$          56,040	$      1,63,044
Purchases to be paid in same quarter (20%)	$    10,513.20	$    10,887.60	$    11,208.00	$          32,609
Purchases to be paid in following quarter (80%)	$          42,800	$    42,052.80	$    43,550.40	$      1,28,403
Total Cash paid to supplier	$          53,313	$          52,940	$          54,758	$      1,61,012
Other Disbursements				$                  -
Factory rent	4500	4500	4500	$          13,500
Monthly Fixed Manufacturing Expenses	2800	2800	2800	$            8,400
Variable Overhead	9,603.0	9,944.0	10,307.0	$          29,854
Equipment purchase	6000	12800	15600	$          34,400
Operating Expenses	11310	11700	12220	$          35,230
Fixed operating expenses	1800	1800	1800	$            5,400
Interest expense	220	284	290	$               794
Income tax		10800		$          10,800
Total Cash Disbursements	$          89,546	$      1,07,568	$      1,02,275	$      2,99,390
Cash Budget
Description	Jan	Feb	Mar
Begining Cash Flow	$            4,650	$            4,200	$            4,200
Cash Inflow	$          78,480	$      1,05,120	$      1,08,960
Cash outflow	$          89,546	$      1,07,568	$      1,02,275
Ending Balance	$          -6,416	$            1,752	$          10,885
Minimum Balance	$            4,200	$            4,200	$            4,200
Cumulative Surplus/(deficit)	$        -10,616	$          -2,448	$            6,685
Amount borrowed	$          11,000	$            3,000
Interest	$               220	$               284	$               290
Balance of borrowings at the end	$          11,220	$          14,504	$            8,109
Amount refunded			$            6,685
Calculation of Budgeted Cost p.u
Description	Jan	Feb	Mar
Direct material p.u	$              6.00	$              6.00	$              6.00
Variable manufacturing overhead p.u	$              1.10	$              1.10	$              1.10
Total Variable cost p.u	$              7.10	$              7.10	$              7.10
No.of units produced	8,730	9,040	9,370
Total Variable cost	$    61,983.00	$    64,184.00	$    66,527.00
Add: fixed expenses
Factory rent	$      4,500.00	$      4,500.00	$      4,500.00
Other fixed Manufacturing expense	$      2,800.00	$      2,800.00	$      2,800.00
Total Expenses	$    69,283.00	$    71,484.00	$    73,827.00
Budgeted Cost p.u	$              7.94	$              7.91	$              7.88