Question

Prepare the budgets for each month in the first quarter of 2104for the Bullwinkle, Inc.

*Slaes

Unit Selling Price $12.00

Unit Sales for November, 2013 $112,500.00

Unit Sales for December, 2013 $102,100.00

Expected unit sales for May, 2014 $137,500.00

Expected unit sales for April, 2014 $125,000.00

Expected unit sales for March, 2014 $116,000.00

Expected unit sales for February, 2014 $112,500.00

Expected unit sales for January, 2014 $113,000.00

Bullwinkle, Inc. likes to keep 10% of the next month's unitsales in ending inventory. All sales are on account. 85% of theAccounts Receivalbe are collected in the month of sale, and 15% ofthe Account Receivable are collected in the mont after sale.Account Receivable on December 31,2013, totaled $183,780.

Desired Ending Direct Materials 3/31/14 12625.0lbs

Metal, Plastic, and Rubber together are $0.75 per pound perunit.

Bullwinkle, Inc. likes to keep 5%of the materials needed ofr thenext month in ending inventory. Payment for materials is madewithin 15 days. 50% is paid in the month of purchase, and 50% ispaid in the month after purchase. Accounts Payable on December 31.2013 totaled $120,595 and were paid in full in January 2014.Beginning Raw Materials on December 31,2013 was 11,295 pounds.

*Direct Labor

Labor requires 2 pounds per unit for completion and is paid at arate of $8.00 per hour.

*Manufacturing Overhead

Indirect Materials $0.30 per labor hour

Indirect Labor $0.50 per labor hour

Utilities $0.45 per labor hour

Maintenace $0.25 per labor hour

Salaries $42,000 per month

Depreciation $16,800 per month

Property Taxes $2675 per month

insurance $1200 per month

Janitorial $1300 per month

All manufacturing overhead costs are variable except salaries,depreciation, property taxes, insurance and janitorial.

*Selling and Administrative Expenses

Variable selling and Administrative cost per unit is $1.60

Advertising $15,000 a month

Insurance $1,400 a month

Salaries $72,000 a month

Depreciation $2,500 a month

Other fixed cost $3,000 a month

*Other info

Cash balance on December 31,2013, totaled $100,500 butmanagement has decided it would like to maintain a cash balance ofat least $800,000 beginning on January 31, 2014. Dividends are paideach month at the rate of $2.50 per share for 5000 sharesoutstanding. The company has an open line of credit with ExchangeBank. The terms of agreement requires borrowing to be in $1000increments at 8% interest. The funds borrowed in January 2014 werepaid back on February 28, 2014. A $500,000 equipment purchase isplanned for February, 2014

1. schedule for expected cash collection from custormers,

2. schedule for expected payments for materials purchases (roundtotals to nearest dollar),

3. cash budget.