PLEASE SHOW HOW I WOULD PUT IT INTO EXCEL Waterways Corporation is preparing its

Question

PLEASE SHOW HOW I WOULD PUT IT INTO EXCEL

Waterways Corporation is preparing its budget for the coming year. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers.

Sales:

Actual unit sates for November

112,500

Actual unit sales for December

102,100

Expected unit sales for January

113,000

Expected unit sales for February

112,500

Expected unit sales for March

116,000

Expected unit sales for April

125,000

Expected unit sales for May

137,500

Unit selling price

$12

Waterways wants 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 totaled 183,780.

Direct Materials:

The product uses metal, plastic, and rubber. In total, each unit requires 2 pounds of material at an average cost of 0.75 per pound.

Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase and 50% is paid in the month after purchase. Accounts Payable on December 31 totaled $120,595. Raw materials on December 31 totaled 11,295 pounds.

Direct Labor:

Labor requires 12 minutes per unit for completion and is paid at a rate of $18 per hour.

Manufacturing Overhead:

Indirect materials

30 cents per labor hour

Indirect labor

50 cents per labor hour

Utilities

45 cents per labor hour

Maintenance

25 cents per labor hour

Salaries

$42,000 per month

Depreciation

$16,800 per month

Property taxes

$2,675 per month

Insurance

$1,200 per month

Janitorial

$1,300 per month

Selling and Administrative Expenses:

Variable selling and administrative cost per unit is $1.60.

Advertising

$15,000 per month

Insurance

$1,400 per month

Salaries

$72,000 per month

Depreciation

$2,500 per month

Other fixed costs

$3,000 per month

Other Information:

The cash balance on December 31 totaled $100,500, but management has decided that it wants to maintain a cash balance of at least $800,000 beginning January 31. Dividends are paid each month at the rate of $2.50 per share for 5,000 shares outstanding. The company has an open line of credit with the First National Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 8% interest. Waterways borrows on the first day of the month and repays on the last day of the month. Reserve repayment, if required, until Waterways can pay the entire amount. A $500,000 equipment purchase is planned for February.

Instructions (Do all parts):

Note: All budgets and schedules should be prepared by month for the first quarter (January, February, and March). Round all figures to the nearest dollar. For labor hours round to whole hours.

a. Prepare a sales budget.

b. Prepare a production budget.

c. Prepare a direct materials budget.

d. Prepare a direct labor budget.

e. Prepare a manufacturing overhead budget.

f. Prepare a selling and administrative budget.

g. Prepare a schedule for expected cash collections from customers.

h. Prepare a schedule for expected payments for materials purchases.

i. Prepare a cash budget.

Actual unit sates for November

112,500

Actual unit sales for December

102,100

Expected unit sales for January

113,000

Expected unit sales for February

112,500

Expected unit sales for March

116,000

Expected unit sales for April

125,000

Expected unit sales for May

137,500

Unit selling price

$12

Explanation / Answer

1. SALES BUDGET Jan Feb March Expected Sales units 113000 112500 116000 Selling price per unit 12 12 12 Budgeted Sales in $ 1356000 1350000 1392000 2. PRODUCTION BUDGET Jan Feb March April May Expected Sales Units 113000 112500 116000 125000 137500 Add: Desired Closing inventory 11250 11600 12500 13750 (10% of next sales) (112500*10%) (116000*10%) (125000*10%) (137500*10%) Less: Opening inventory 11300 11250 11600 12500 (113000*10%) Budgeted Production in units 112950 112850 116900 126250 3. Material Budget Jan Feb March April Budgeted Production 112950 112850 116960 126250 Material requirement per unit 2 2 2 2 Material requirement in pounds 225900 225700 233920 252500 Add: Desired Closing inven of RM 11285 11696 12625 (5% of material of next month req.) (225700*5%) (233920*5%) (252500*5%) Less: Beginning inv of material 11295 11285 11696 (225900*5%) Budgeted Purchasein pounds 225890 226111 234849 Purchase price per pound 0.75 0.75 0.75 Budgeted purchase in $ 169417.5 169583.25 176136.75 4. LABOUR BUDGET Jan Feb March Budgeted Production 112950 112850 116960 Labour required per unit in mins 12 12 12 Total Labour time in mins 1355400 1354200 1403520 Budgted labour hours 22590 22570 23392 Labour rate per hour 18 18 18 Budgeted Labour cost in $ 406620 406260 421056

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