| Actual sales in December were $ 70 comma 000$70,000. Selling price per unit is projected to remain stable at $ 10$10 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as? follows: | January. . . . . . . . . | $80,000 | | February. . . . . . . . | $92,000 | | March. . . . . . . . . . | $99,000 | | April. . . . . . . . . . . . | $97,000 | | May. . . . . . . . . . . . | $85,000 | |
| b. | Sales are 3030?% cash and 7070?% credit. All credit sales are collected in the month following the sale. |
| c. | DamonDamon Manufacturing has a policy that states that each? month's ending inventory of finished goods should be 2525?% of the following?month's sales? (in units). |
| d. | Of each? month's direct material? purchases, 2020?% are paid for in the month of? purchase, while the remainder is paid for in the month following purchase. TwoTwo pounds of direct material is needed per unit at $ 2.00$2.00 per pound. Ending inventory of direct materials should be 10 %10% of next? month's production needs. |
| e. | Most of the labor at the manufacturing facility is? indirect, but there is some direct labor incurred. The direct labor hours per unit is 0.010.01. The direct labor rate per hour is $ 12$12 per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as? follows: | January. . . . . . . . . | $996 | | February. . . . . . . . | $1,125 | | March. . . . . . . . . . | $1,182 | |
| f. | Monthly manufacturing overhead costs are $ 5 comma 000$5,000 for factory? rent, $ 3 comma 000$3,000 for other fixed manufacturing? expenses, and $ 1.20$1.20 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. |
| g. | Computer equipment for the administrative offices will be purchased in the upcoming quarter. In? January, DamonDamon Manufacturing will purchase equipment for $ 5 comma 000$5,000 ?(cash), while? February's cash expenditure will be $ 12 comma 000$12,000 and? March's cash expenditure will be $ 16 comma 000.$16,000. |
| h. | Operating expenses are budgeted to be $ 1.00$1.00 per unit sold plus fixed operating expenses of $ 1 comma 000$1,000 per month. All operating expenses are paid in the month in which they are incurred. No depreciation is included in these figures. |
| i. | Depreciation on the building and equipment for the general and administrative offices is budgeted to be $ 4 comma 500$4,500 for the entire?quarter, which includes depreciation on new acquisitions.?? |
| j. | DamonDamon Manufacturing has a policy that the ending cash balance in each month must be at least $ 4 comma 000$4,000. It has a line of credit with a local bank. The company can borrow in increments of $ 1 comma 000$1,000 at the beginning of each? month, up to a total outstanding loan balance of $ 125 comma 000$125,000. The interest rate on these loans is 11?% per month simple interest? (not compounded). The company would pay down on the line of credit balance in increments of $ 1 comma 000$1,000 if it has excess funds at the end of the quarter. The company would also pay the accumulated interest at the end of the quarter on the funds borrowed during the quarter. |
| k. | The? company's income tax rate is projected to be? 30% of operating income less interest expense. The company pays $ 10 comma 000$10,000 cash at the end of February in estimated taxes. DamonDamon Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to DamonDamon ?Manufacturing's operations: LOADING... ?(Click the icon to view the? data.) LOADING... ?(Click the icon to view additional? data.) Read the requirements LOADING... . Requirement 1. Prepare a schedule of cash collections for? January, February, and? March, and for the quarter in total. | Damon Manufacturing | | Cash Collections Budget | | For the Quarter Ended March 31 | | | Month | | | | | January | February | March | Quarter | | Cash sales | | | | | | Credits sales | | | | | | Total cash collections | | | | | | | | | | | | | | Enter any number in the edit fields and then click Check Answer. Data Table | Current Assets as of December 31 (prior year): | | | Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . | $4,500 | | Accounts receivable, net. . . . . . . . . . . . . . . | $48,000 | | Inventory. . . . . . . . . . . . . . . . . . . . . . . . | $15,100 | | Property, plant, and equipment, net. . . . . . . . . . . . | $120,000 | | Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . | $42,400 | | Capital stock. . . . . . . . . . . . . . . . . . . . . . . . . . . | $123,500 | | Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . | $22,500 | | Actual sales in December were $ 70 comma 000$70,000. Selling price per unit is projected to remain stable at $ 10$10 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as? follows: | January. . . . . . . . . | $80,000 | | February. . . . . . . . | $92,000 | | March. . . . . . . . . . | $99,000 | | April. . . . . . . . . . . . | $97,000 | | May. . . . . . . . . . . . | $85,000 | | | |
