Bigelow Company has just begun business and needs to generate a sales forecast (in units) for their first quarter of operations. Sales forecast for the Bigelow Company are: Jan. 20,000 Feb. 40,000 March 80,000 Apr. 50,000 ADDITIONAL INFORMATION a. Ending finished goods inventory should be equal to one half of next monthΒs sales projection. b. Each unit requires 3 pounds of material at a cost of $5 per pound. c. Labor cost is $10 per unit produced. d. Ending raw material inventory should be equal to twenty percent of next months material requirement. e. Factory overhead is $25,000 per month of which $10,000 is for depreciation. f. All costs are paid in the month incurred except purchases which are paid in the following month. g. Selling Price per unit is $50. All sales are on account with collections estimated at 10% in the m
onth of sale, 60% the month following the sale, 25% the second following month and 5% are uncollectable. h. Bigelow began the business with $50,000 in cash and requires an ending cash balance of at least $5,000. Bigelow can borrow money from a local bank in $1,000 increments at an interest rate of 1% per month. REQUIRED: 1. Prepare a sales budget for Jan. through March 2. Prepare a production budget for Jan. through March. 3. Prepare a purchases budget for Jan. through March. 4. Prepare a cash budget for Jan. through March. Repeat requirements 1-4 for each of the following four assumptions. ( A total of 5 cash budgets). Ending Finished Goods Ending Raw Material Raw Material Cost Inventory Inventory per pound A. 20% 20% $6 B. 30% 30% $4 C. 40% 50% $5 D. 10% 10% $3 use: Managerial Accounting 14E- Garrison, Noreen, Brewer book