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Feathered Friends makes backyard bird feeders. The company sells the bird feeders to home improvement stores for $12 per birdfeeder. Each birdfeeder requires 2.0 board feet of wood, which the company obtains at a cost of $5 per board foot. The company would like to maintain an ending stock of wood equal to 25% of the nextmonth's production requirements.The company would also like to maintain an ending stock of finished bird feeders equal to 10% of the next month's sales. Sales data for the company is as follows:

Requirement 1. Prepare the sales budget for the first three months of the year, as well as a summary budget for the quarter, including a separate section that details the type of sales made (cash versus credit.)

Feathered Friends
Sales Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Unit sales
Multiply by: Sales price per unit
Total sales revenue
Cash sales
Credit sales
Total sales revenue

Requirement 2. Prepare the production budget for the first three months of the year, as well as a summary budget for the quarter.

Feathered Friends
Production Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Requirement 3. Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 115,000

board feet of wood for production in April. (Round your answers to the nearest whole dollar.)

Feathered Friends
Direct Materials Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Units to be produced
Multiply by: Quantity (board feet) of DM needed per unit
Quantity (board feet) needed for production
Plus: Desired ending inventory of DM
Total quantity (board feet) needed
Less: Beginning inventory of DM
Quantity (board feet) to purchase
Multiply by: Cost per board foot
Total cost of DM purchases

Requirement 4. Prepare the cash collections budget for January, February, and March, as well as a summary for the first quarter. (Round your answers to the nearest whole dollar.)

Review the sales budget prepared in Requirement 1.

Feathered Friends
Cash Collections Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Cash sales in current month
Collections on credit sales:
70% of credit sales made one month ago
20% of credit sales made two months ago
6% of credit sales made three months ago
Total cash collections

Requirement 5. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the first quarter.

Review the direct materials budget prepared in Requirement 3.

Feathered Friends
Cash Payments for Direct Materials Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
30% of current month DM purchases
70% of last month's DM purchases
Total cash payments

Units October actual sales (prior year) November actual sales (prior year) December actual sales (prior year) January projected sales February projected sales March projected sales April projected sales 89,000 90,000 81,000 76,000 87,000 99,000 _ ..101,000 In any given month, 30% of the total sales are cash sales, while the remainder are credit sales. The company's collection history indicates that 70% of credit sales is collected in the month after the sale, 20% is collected two months after the sale, 6% is collected three months after the sale, and the remaining 4% is never collected. Assume that the total cost of direct materials purchases in December was $510,000. The company pays 30% of its direct materials purchases in the month of purchase, and pays the remaining 70% in the month after purchase

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