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The Large Box Car Division buys its wood on account. It pays for $(17)40\%$ of its purchases of direct

materials in the quarter in which they were purchased and $(18)60\%$ in the quarter after they were

purchased

Each large box car requires $(19)3$ hours of direct labor. Employees engaged in direct labor will be paid

an estimated $(20)$ $$10\mathrm{.}00$ per labor hour. Wages and salaries are paid on the ${15}^{th}$ and ${30}^{th}$ of each month.

Variable manufacturing overhead is estimated to be $(21)$ $$2\mathrm{.}00$ per direct labor hour for the coming fiscal

year. All variable manufacturing overhead expenses are paid for in the quarter incurred.

Fixed manufacturing overhead is estimated to total $(22)$ $$69,750$ each quarter, with $(23)$ $$15,000$ out of

the total amount of $(22)$ $$69,750$ representing depreciation on machinery, equipment and the factory. All

other fixed manufacturing overhead expenses are paid in cash in the quarter they occur. The fixed

manufacturing overhead rate will be computed by dividing the year's total fixed manufacturing overhead

by the year's budgeted direct labor hours. Round the fixed overhead rate to the nearest penny.

Variable selling and administrative expenses are estimated to be $(24)$ $$4\mathrm{.}00$ per box car sold. Fixed

selling and administrative expenses are expected to total $(25)$ $$40,000$ each quarter, with $(26)$ $$20,000$

out of the total amount of $(25)$ $$40,000$ representing depreciation on the office space, furniture and

equipment. Other than depreciation, all selling and administrative expenses are paid for in the quarter

they occur.

On $(36)$ June, $2024,$ the last month of the $4^{th}$ quarter, the Large Box Car Division plans to buy new

machinery and equipment for $(27)$ $$400,000.$ The new machinery and equipment will be acquired at the

very end of the fiscal year, so it will not be used in production and sales during the coming year and it will

not be depreciated until the following year. The Large Box Car Division expects to pay $(28)50\%$ down in

cash and finance the remaining $(29)50\%$ of the equipment cost with a note payable from a local bank

with whom they do business with. No interest payablef will accrue on the eHow to solve

DATE: June $1,2024$

TO: $,$ cCSU Consulting

FROM: Mark Swain, President, Tommy's Box Cars

SUBJECT: Master Budget for the fiscal year July $1,2024-$ June $30,2025$

Our controller, Tommy Swain is negotiating with potential new Wood suppliers in Kentucky. We need the

Large Box Car Division's Master Budget for the fiscal year ended $(36)$ June $30,2025$ for our corporate

strategic planning process, and we cannot wait for Tommy's return from Kentucky. We would like you to

prepare the Large Box Car Division's Master Budget for the fiscal year ended $(36)$ June $30,2025.$

The deliverables are as follows:

Sales budget, including a schedule of expected cash collections.

Production budget.

Direct materials budget, including a schedule of expected cash disbursements for materials.

Direct labor budget.

Manufacturing overhead budget.

Ending finished goods inventory budget calculating the expected value of the finished

goods inventory as of $(36)$ June $30,2025.$

Selling and administrative expense budget.

Cash budget.

Budgeted income statement for the year ended $(36)$ June $30,2025.$

Budgeted balance sheet for $(36)$ June $30,2025.$

All the Master Budget schedules except those marked with an asterisk for the Large Box Car Division

should include a column for each quarter and a total column for the fiscal year. We only need annual

totals for the budgeted financial statements $($schedules $9$ and $10)$ and we only need a year$-$end total for

the value of finished goods inventory $($schedule $6).$

The hard copies of these budget schedules should be delivered by the company deadline. You can print

more than one schedule per page, but do not have a page break in the middle of a budget schedule. I

like to be able to view an entire budget schedule without flipping back and forth between pages. Please

also use a type font of between $10-12$ points for printing. We also need you to submit $($via e$-$mail$)$ the

Excel spreadsheet that you used to create the budget schedules you print so we can use the spreadsheet

as a starting point for future budgets. Upload the Excel spreadsheet on Blackboard. We need that

spreadsheet file the night before the meeting.

I've attached a brief description of the Large Box Car Division to the budget data Tommy gave me before

he left for Kentucky. We eagerly await your results.

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