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23-1
SOLUTION
Chapter 23 Waterways Continuing Problem
WCP23
(a) Sales budget
Waterways Corporation
Sales Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Expected unit sales
113,333
112,500
116,667
342,500
(b) Production budget
Waterways Corporation
Production Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Expected unit sales
113,333
112,500
116,667
342,500
Add: Desired ending finished goods units
11,250
11,667
12,500*
12,500
23-2
(c) Direct materials budget
Waterways Corporation
Direct Materials Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Units to be produced (from part b)
113,250
112,917
117,500
343,667
Direct materials per unit
2
2
2
2
Total pounds needed for production
226,500
225,834
235,000
687,334
(d) Direct labor budget
Waterways Corporation
Direct Labor Budget
For the first quarter of 2017
First
Quarter
January
February
March
Quarter
Units to be produced (from part b)
113,250
112,917
117,500
343,667
23-3
(e) Manufacturing overhead budget
Waterways Corporation
Manufacturing Overhead Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Variable costs
Indirect materials (30¢ per hour)
$ 6,795
$ 6,775
$ 7,050
$ 20,620
Indirect labor (50¢ per hour)
11,325
11,292
11,750
34,367
Utilities (45¢ per hour)
10,193
10,162
10,575
30,930
Fixed costs
Salaries
42,000
42,000
42,000
126,000
Depreciation
16,800
16,800
16,800
50,400
Property taxes
2,500
2,500
2,500
7,500
Insurance
1,200
1,200
1,200
3,600
(f) Selling and administrative expense budget
Waterways Corporation
Selling and Administrative Expense Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Budget sales in units (from part a)
113,333
112,500
116,667
342,500
Variable expenses per unit
$ 1.62
$ 1.62
$ 1.62
$ 1.62
Total variable S & A expense
$ 183,599
$ 182,250
$ 189,001
$ 554,850
Fixed expenses:
23-4
(g) Collections from customers
Schedule of Expected Collections from Customers
January
February
March
Quarter
Accounts receivable, 12/31/13
$ 183,750
$ 183,750
January ($1,359,996)
1,155,997*
$ 203,999**
$1,359,996
February ($1,350,000)
1,147,500
$ 202,500
$1,350,000
(h) Payments for direct materials
Schedule of Expected Payments for Direct Materials
January
February
March
Quarter
Accounts payable, 12/31/13
$ 120,595.00
$ 120,595.00
January ($170,578)
85,289.00
$ 85,289.00
170,578.00
23-5
(i) Cash budget
Waterways Corporation
Cash Budget
For the first quarter of 2017
First Quarter
January
February
March
Quarter
Beginning cash balance
$ 100,500
$ 800,688
$ 817,576
$ 100,500
Add: Receipts
Equipment purchase
500,000
500,000
Dividends
12,500
12,500
12,500
37,500
Total disbursements
755,559
1,217,838
736,464
2,709,861
Excess (deficiency) of available cash over cash disbursements
684,688
934,349
1,473,615
1,474,388
Financing:
