Please show the solution, thanks! 4G 46 6:18 s J0.6031Down Under Company's budgetedsales and budgeted cost of sales forthe coming year are P126 million andP72 million, respectively. Short-terminterest rates are expected toaverage 10%. If Down Under canincrease inventory turnover from itscurrent level of nine times per year toa level of 12 times per year, its costsaving in the coming year areexpected to beYour answerA firm has daily cash receipts ofP300,000. A bank has offered toprovide a lockbox service that willreduce the collection time by threedays. The bank required a monthlyfee of P2,000 for providing thisservice. If monthly rates areexpected to average 6% during theyear, what is the additional annualincome (loss) of using the lockboxsystem? *Your answer

1) Calculate the average inventory: a) Inventory turnover =Cost of Goods SoldAverage Inventory…

Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its

Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter21: Budgeting

Section: Chapter Questions

Problem 9DQ: A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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Please show the solution, thanks!

4G 46 6:18 s J
0.60
31
Down Under Company's budgeted
sales and budgeted cost of sales for
the coming year are P126 million and
P72 million, respectively. Short-term
interest rates are expected to
average 10%. If Down Under can
increase inventory turnover from its
current level of nine times per year to
a level of 12 times per year, its cost
saving in the coming year are
expected to be
Your answer
A firm has daily cash receipts of
P300,000. A bank has offered to
provide a lockbox service that will
reduce the collection time by three
days. The bank required a monthly
fee of P2,000 for providing this
service. If monthly rates are
expected to average 6% during the
year, what is the additional annual
income (loss) of using the lockbox
system? *
Your answer

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