Waterways Corporation is preparing its budget for the coming year, 2022. 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 2021		113,000
Unit sales for December 2021		102,000
Expected unit sales for January 2022		114,000
Expected unit sales for February 2022		111,000
Expected unit sales for March 2022		115,000
Expected unit sales for April 2022		125,000
Expected unit sales for May 2022		139,000
Unit selling price		$12

Waterways likes to keep 10% of the next months 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, 2021, totaled $183,600. 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, 2021 totaled 11,370 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2021, totaled $120,595.

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		50		per labor hour
Utilities		50		per labor hour
Maintenance		20		per labor hour
Salaries		$42,000		per month
Depreciation		$15,100		per month
Property taxes		$3,000		per month
Insurance		$1,100		per month
Maintenance		$1,300		per month

Selling and Administrative
Variable selling and administrative cost per unit is $1.50.
Advertising		$14,000	a month
Insurance		$1,300	a month
Salaries		$74,000	a month
Depreciation		$2,800	a month
Other fixed costs		$2,900	a month

Other Information The Cash balance on December 31, 2021, totaled $102,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.30 per share for 4,750 shares outstanding. The company has an open line of credit with Romneys Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $450,000 equipment purchase is planned for February.

(a)For the first quarter of 2022, prepare a sales budget.

(b) For the first quarter of 2022, prepare a production budget.

(c) For the first quarter of 2022, prepare a direst materials budget

(d) For the first quarter of 2022, prepare a direct labor budget

(e) For the first quarter of 2022, prepare a manufacturing overhead budget.

(f) For the first quarter of 2022, prepare a selling and administrative budget

(g) for the first quarter of 2022, prepare a schedule for expected cash collections from customers

(h) for the first quarter of 2022, prepare a schedule for expected payments for materials purchase.

(i) For the first quarter of 2022, prepare a cash budget.

• a)Sales Budget:-

  	January	February	March	Total
  Unit Sales
  Unit Selling price
  Sales (in dollars)

  b)Production Budget:-

  	January	February	March	Total
  Unit Sales
  Add:-Desired ending inventory(10%of next month sales)
  Total units
  Less:-Inventory in hand(10% of current month)
  Units required to be produced

  c)Direct Materials(DM) Budget:-

  	January	February	March	Total
  Units required to be produced
  DM required per unit (in pounds)
  DM required for production (in pounds)
  Add:-Desired ending inventory (5% of next month requirement)
  Total DM (in pounds)
  Less:-DM inventory in hand at beginning
  DM required to be purchased (in pounds)
  DM cost per pound(in $)
  Total DM cost (in $)

  d)Direct Labor (DL) budget:-

  	January	February	March	Total
  Units required to be produced
  DL required per unit
  DL required for production
  DL cost per hour (in $)
  Total DL cost (in $)