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a. c. a.c Additional Information a. Budgeted sales are 1,000 laptops for the first quarter and are expected to increase by 200 laptops per quarter. Cash sales are expected to make up 10% of total sales, the remainder will be on account. The expected sales price per computer is $70. b. Finished goods inventory on December 31, 2020, consists of 300 computers at $36 each. Desired ending finished goods inventory is 40% of the next quarter's sales; first-quarter sales for 2020 are expected to be 1,800 computers; FIFO inventory costing is used. d. Raw Materials Inventory on December 31, 2020, consists of 750 pieces of the required component used to manufacture the laptops. e. Direct materials requirements are 25 pieces of material per computer. The cost of each piece is $4. f. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2021, is 750 computer pieces; indirect materials are insignificant and not considered for budgeting purposes. 8. Each computer requires 0.30 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $3 per computer. i. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $10,860 per quarter for other costs, such as utilities, insurance, and property taxes. 1. Fixed selling and administrative expenses include $8,000 per quarter for salaries; 54,800 per quarter for rent; $1,950 per quarter for insurance; and $2,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expenditures include $25,000 for new manufacturing equipment to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2020, Accounts Receivable is received in the first quarter of 2021; uncollectible accounts are considered insignificant and not considered for budgeting n. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter December 31, 2020, Accounts Payable is paid in the first quarter of 2021. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. q. Nerdzy desires to maintain a minimum cash balance of $20,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 12% per year and paid at the beginning of the quarter based on the amount a.e Nerdzy Computer Company Balance Sheet December 31, 2020 Assets Current Assets Cash A/R Raw Materials Inventory Finished Goods Inventory Total Current Assets Plant Property & Equipment Equipment Less: Accumulated Depreciation Total Assets 20,000 30,000 3,000 10,800 63,800 168,000 (39,000) 129,000 192,800 Liabilities Current Liabilities: Accounts Payable 16,000 Stockholders' Equity Common Stock, no par Retained Earnings Total stockholders' equity Total Liabilities and Stockholders' Equity 130,000 46,800 176,800 192,800 K M o P sic if to Nerdzy Computer Company Sales Budget For the Year Ended December 31, 2021 01 02 Q3 Total Budgeted laptops to be sold 1,000.00 1,200 1,400 1,600 5,200 Sales Price per laptop 70.00 70.00 70.00 70.00 70.00 Total Sales $ 70,000 $ 84,000 S 98,000 S 112,000 5 364,000 04 ow a.b Production Budget Nerdzy Computer Company Production Budget For the Year Ended December 31, 2021 Q1 Q2 Budgeted laptops to be sold 1,000 1,200 Plus: Desired laptops in ending inven 480 560 Total laptops needed 1,075 1,275 Less: Laptops in beginning inventory 300.00 480 Budgeted computers to be produced 1,180 1,280 Q3 04 1,400 640 1,475 560 1.480 Total 1,600 5,200 720 300 1,675 5,500 640 300.00 1.680 5,620 will a.c Direct Materials Budget Nerdzy Computer Company Direct Materials Budget For the Year Ended December 31, 2021 Q1 02 Q3 Q4 Total es for Budgeted laptops to be produced 1,180 1,280 1,480 1,680 5,620 Direct materials per laptop 2.50 2.50 2.50 2.50 2.50 nent Direct materials needed for productic 2,950 3,200 3,700 4,200 14,050 Plus: Desired DM in end inventory 1,280 1,480 1,480 1,680.00 750.00 ce is $4. Total DM needed 4,230 4,680 5,830 4,950 14,800 for Less: DM in beg. Inv 750.00 1,280 1,480 1,680 750.00 Budgeted purchases of DM 3,400 3,900 3,270 14,050 DM cost per item 4.00 4.00 4.00 4.00 4.00 Budgeted purchases of DM S 13,920 S 13,600 5 15,600 $ 13,080 $ 56,200 3,480 02 03 04 Total 02 03 04 Total a.i Schedule of Cash Payments Schedule of Cash Payments 01 Total DM Purchases Cash Payments 01 Direct Materials: Accounts Payable Balance, 12/31/2020 01purchases, paid in 01 01 purchases, paid in 02 Q2 purchases paid in 02 02 purchases paid in Q3 03 Purchases paid in Q3 Q3 Purchases paid in 04 Q4 Purchases paid in Q4 Total Payments for DM Direct Labor: Total Payments for DL Manufacturing Overhead: Variable MOH Utilities, Ins, Prop Taxes Total payments for MOH S&A Expenses: Salaries Expense Rent Expense Insurance Expense Supplies Expense Total Payments for S8A expenses Income Taxes: Total payments for income taxes Capital Expenditures: Total Payments for Cap. Expenditures Total Cash payments (before interest 04 Total a. Cash Budget Nerdzy Computer Company Cash Budget For the Year Ended December 31, 2021 01 02 03 Beg Cash Balance Cash receipts cash available Cash payments Purchases of DM DL MOH S&A Exp Income taxes Capital Expenditures Interest Expense Total cash payments Ending cash balance before financing minimum cash balance desired Projected cash excess (deficiency) Financing Borrowing Principal repayments Total effects of financing Ending Cash Balance

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