Balance Sheet and Following Account Balances

Retained earnings 109,oho 712,000 712. 000 b. Actual gross revenue for declination and budgeted gross sales for the next four months ar as follow s December (actual) 2800 units It is expected that sales go forth increase by 40% in the month of January and by a further 50% in the next month. The hobby month sales would drop by 50% an d past will will ream remain in cons Tanta for for the next next 2 moon months this The management will not alter the selling price, which is currently $100 Management wants finished goods inventory to be 20% of the following months sales One units of finished goods require 2 kilos of raw materials. The price of materials is currently $10 per kilo and is expected to increase by 50% in February hereafter it will remain continual for the next four months. The management wants raw materials inventory to be 10% of the following months p decrement needs Each unit of product requires 2 hours of direct materials for completion. The laborers are ex pected to work for a total of 4000 hours per month at a wage rat e Of $6 per hour. Any additional work requires an overtime payment of time and a half(prenominal). Manufactu lot overhead variable $5 per labor hours worked fixed $17000 per MO nth. Sales are 20% for cash and 80% on credit.Half of the credit sales are collected in the month following sale while the remaining half is collected in second month after the sales. The accounts receivable at December 31 are a ending of December credit sales. Monthly expenses are budgeted as follows salaries and wages, $10,000 per month a advertising, $70,000 per month shipping, 5% of sales other expenses, 3% of sales. Depreciation, I including depreciation on new assets acquired during the quarter, will be $42,000 for the quart err. One- half of a months raw materials purchases is give for in the month of purchase the to her half is paid in the following month.Shipping expenses are paid in the month following the shipment. , while ad vertising I s paid in one months advance. During February, the caller-out will purchase a new copy machine for $1,700 cash. Du ring March, other equipment will be purchased for cash at a cost of $84,500. During January, the company will defend and pay $45,000 in cash dividends. Management wants to maintain a minimum cash balance of $30,000. The company h as an agreement with a local bank that allows the company to borrow in increments of $1,0 00 at the beginning of each month. The interest rate on these loans is 1% per month and for is