Heartbreaker Inc. manufactures a product with a selling price of $60 per unit. Units and monthly cost data follow: Variable: Selling and administrative. Direct materials. Direct labor.... Variable manufacturing overhead. Fixed: Selling and administrative.. Manufacturing (including depreciation of $11,000).. 5 per unit sold 12 per unit manufactured 12 per unit manufactured 6 per unit manufactured $17,000 per month 34,000 per month Heartbreaker pays all bills in the month incurred. All sales are on account with 50 percent collected the month of sales and the balance collected the following month There are no sales discounts or bad debts. Heartbreaker desires to maintain an ending finished goods inventory equal to 20 percent of the following month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1, 2017, inventories are in line with those policies Actual unit sales for December and budgeted unit sales for January, February and March of 2017 are as follows: December January 11,250 $675,000 $600,000 February 15,000 $900,000 March Sales Units Sales Dollars 10,000 13,000 $780,000 Additional Information: The January 1 beginning cash balance is projected to be $6,000 For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost Each unit of finished product requires one unit of raw materials. Heartbreaker intends to pay a cash dividend of $12,000 in January. Required: a. Prepare a production budget for January and February b. Prepare a purchases budget in units for January. c. Prepare a manufacturing cost budget for January d. Prepare a cash budget for January Prepare a contribution income statement for January. е.

Principles of Accounting Volume 2

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Chapter5: Process Costing

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Please answer last 2 subparts.

Prepare a cash budget for January
Prepare a contribution income statement for January.

Heartbreaker Inc. manufactures a product with a selling price of $60 per unit. Units and
monthly cost data follow:
Variable:
Selling and administrative.
Direct materials.
Direct labor....
Variable manufacturing overhead.
Fixed:
Selling and administrative..
Manufacturing (including depreciation of $11,000)..
5 per unit sold
12 per unit manufactured
12 per unit manufactured
6 per unit manufactured
$17,000 per month
34,000 per month
Heartbreaker pays all bills in the month incurred. All sales are on account with 50
percent collected the month of sales and the balance collected the following month
There are no sales discounts or bad debts.
Heartbreaker desires to maintain an ending finished goods inventory equal to 20
percent of the following month's sales and a raw materials inventory equal to 10 percent
of the following month's production. January 1, 2017, inventories are in line with those
policies
Actual unit sales for December and budgeted unit sales for January, February and
March of 2017 are as follows:
December January
11,250
$675,000 $600,000
February
15,000
$900,000
March
Sales Units
Sales Dollars
10,000
13,000
$780,000
Additional Information:
The January 1 beginning cash balance is projected to be $6,000
For the purpose of operational budgeting, units in the January 1 inventory of
finished goods are valued at variable manufacturing cost
Each unit of finished product requires one unit of raw materials.
Heartbreaker intends to pay a cash dividend of $12,000 in January.
Required:
a. Prepare a production budget for January and February
b. Prepare a purchases budget in units for January.
c. Prepare a manufacturing cost budget for January
d. Prepare a cash budget for January
Prepare a contribution income statement for January.
е.

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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