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Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 Unit sales for December 2019 Expected unit sales for January 2020 Expected unit sales for February 2020 Expected unit sales for March 2020 Expected unit sales for April 2020 Expected unit sales for May 2020 Unit selling price 114,000 101,000 114,000 114,000 116,000 124,000 137,000 S12 Waterways likes 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, 2019, totaled $181,800 Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019. totaled 11.400 pounds. Payment for materials is made within 15 days. 5096 is paid in the month of purchase, and 5096 is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $102.885. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials 30 per labor hour Indirect labor 50c per labor hour Utilities 50c per labor hour Maintenance 30c per labor hour Salaries $43,000 per month Depreciation $15,600 per month Property taxes $2.500 per month Insurance $1,200 per month Maintenance $1,400 per month Selling and Administrative Variable selling and administrative cost per unit is $1.70. Advertising $13,000 a month Insurance $1,300 a month Salaries $72,000 a month Depreciation $2,200 a month Other foxed costs $2,900 a month Other Information The Cash balance on December 31, 2019, totaled $101.000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.50 per share for 5,050 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 996 interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $460.000 equipment purchase is planned for February For the first quarter of 2020. prepare a sales budget. WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 7 First Quarter January February 114000 14000 Quarter Expected Unit Sales y March 116000 12 334000 Unit Selling Price v s 12 5 12 Total Sales 1368000 5 1368000 $ 1392000 $ 4128000 Question Part Score For the first quarter of 2020. prepare a production budget. WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 First Quarter February 114000 124000 Quar March 116000 Expected Unlt Sales Add : Desired Ending Finished Goods Unit 7 11400 11400 11600 Total Required Units 125600 128400 125400 11400 Less : Beginning Finished Goods Unlt 21400 11600 Required Production Units 114000 114200 116800 For the first quarter of 2020. prepare a direct materials budget. (Round cost per pound to 2 decimal places, eg. 0.25 and all other answers to decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2020 First Quarter January February 114000 114200 March Units to be produced 116800 Direct Materials Per Unit 7 228000 Total Pounds Required for Production Add Desired Ending Inventory nding Irwentory 228400 1680 233600 12530 1420 Total Materials Required 239420 240080 246130 Less Beginning Materials inventory ning Materials inventory 11400 1420 11680 Direct Materials Purchases 234450 Cost Per Pound 228020 0.80 282426 $ 228560 0.80 182928 5 s 0.80 Total Cost of Direct Materials Purchases : $ 2 87580 Question Part Score For the first quarter of 2020. prepare a direct labor budget. (Round time per unit to nearest hour, eg. 30 minutes will be rounded to 0.5 hours) WATERWAYS CORPORATION Direct Labor Budget For the First Quarter of 2020 First Quarter January February March Quarter to be produced 114000 114200 116800 345000 Labor Cost Per Hour 0.2 02 0.2 0.2 Required Direct Labor Hours 22800 22840 23360 69000 Labor Cost Per Hour 9.00 $ 9.00 9.00 9.00 Direct Labor Cost 205200 5 205560 210240 621000 For the first quarter of 2020. prepare a manufacturing overhead budget. (Round overhead rate to 2 decimal places, eg. 5.25 and all other answers to O decimal places, eg. 2.520. List Variable Costs first.) WATERWAYS CORPORATION Manufacturing Overhead Budget For the First Quarter of 2020 V First Quarter February January March Quarte Variable Costs Indirect Materials Indirect Labor U tles Maintenance Total Variable Cost Fixed Costs Salarles Depreciation Property Taxes Insurance Maintenance Total Fed Costs Total Manufacturing Overhead For the first quarter of 2020. prepare a selling and administrative budget. (Enter per unit expenses rounded to 2 decimal places. Eg. 1.25) WATERWAYS CORPORATION Selling and Administrative Expense Budget For the First Quarter of 2020 First Quarter February January Budget Sales In Units Variable Expenses Per Unit Total Variable S&A Expense Fixed Expenses Advertising Insurance Salaries Depreciation Other Total Fixed Expenses Total S&. A Expenses Question Part Score For the first quarter of 2020. prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers January February March Quarter Accounts receivable, 12/31/19 $ January sales February sales March sales Total cash collections For the first quarter of 2020. prepare a schedule for expected payments for materials purchases. (Round answers to decimal places, eg 2,520.) Schedule of Expected Cash Payments for Purchases January February March Quarter Accounts payable, 12/31/19 $ January February March Total payments

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