x CIOLII ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mhe -r Budget Problem i Saved Total cash payments $ 844,200 $ 831,600 $ 846,300 Cash Budget April May June Beginning cash balance Add: Cash receipts from sales Total cash available $ 168,000 2,066,400 2,036,160 1,980,720 2,234,400 Ook Less: Cash payments for: Int Direct labor 620,550 626,850 642,600 ences Direct material 844,200 831,600 846,300 Dividends 0 42,000 0 General and administrative salaries 50,400 50,400 50,400 Loan interest 120 0 0 Long-term note interest Purchases of equipment 18,900 0 18,900 18,900 0 420,000 Sales commissions Sales salaries 165,312 157,248 161,280 12,600 12,600 12,600 Variable overhead. 111,699 112,833 115,668 Total cash payments 1,823,781 1,852,431 2,267,748 Preliminary cash balance Additional loan (loan repayment) (12,000) Ending cash balance Prev 1 of 1 Next Q Search ASUS B S. mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmhe Jet Problem i Cash Accounts receivable Raw materials inventory Finished goods inventory Assets Equipment Less: Accumulated depreciation $ 2,520,000 630,000 Total assets Saved ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity $ 844,200 12,000 2,100,000 $ 2,956,200 $ 168,000 1,446,480 413,700 1,367,268 Liabilities Accounts payable Loan payable Long-term note payable. Equity 1,890,000 Common stock Retained earnings 1,407,000 922,248 2,329,248 $ 5,285,448 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. $ 5,285,448 a. Sales for March total 86,100 units. Budgeted sales in units follow: April, 86,100; May, 81,900; June, 84,000; and July, 86,100. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 20,685 pounds. The budgeted June 30 ending raw materials inventory is 16,800 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 68,880 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $84,000 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $12.600. g. Monthly general and administrative expenses include $50,400 for administrative salaries and 0.9% monthly interest on the long- term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials Search Prev 1 of 1 L ASUS Next F2 F3 F4 F5 F6 F8 F9 F10 F11 מן F12 Prt Sc Insert De

x CIOLII ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mhe -r Budget Problem i Saved Total cash payments $ 844,200 $ 831,600 $ 846,300 Cash Budget April May June Beginning cash balance Add: Cash receipts from sales Total cash available $ 168,000 2,066,400 2,036,160 1,980,720 2,234,400 Ook Less: Cash payments for: Int Direct labor 620,550 626,850 642,600 ences Direct material 844,200 831,600 846,300 Dividends 0 42,000 0 General and administrative salaries 50,400 50,400 50,400 Loan interest 120 0 0 Long-term note interest Purchases of equipment 18,900 0 18,900 18,900 0 420,000 Sales commissions Sales salaries 165,312 157,248 161,280 12,600 12,600 12,600 Variable overhead. 111,699 112,833 115,668 Total cash payments 1,823,781 1,852,431 2,267,748 Preliminary cash balance Additional loan (loan repayment) (12,000) Ending cash balance Prev 1 of 1 Next Q Search ASUS B S. mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmhe Jet Problem i Cash Accounts receivable Raw materials inventory Finished goods inventory Assets Equipment Less: Accumulated depreciation $ 2,520,000 630,000 Total assets Saved ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity $ 844,200 12,000 2,100,000 $ 2,956,200 $ 168,000 1,446,480 413,700 1,367,268 Liabilities Accounts payable Loan payable Long-term note payable. Equity 1,890,000 Common stock Retained earnings 1,407,000 922,248 2,329,248 $ 5,285,448 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. $ 5,285,448 a. Sales for March total 86,100 units. Budgeted sales in units follow: April, 86,100; May, 81,900; June, 84,000; and July, 86,100. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 20,685 pounds. The budgeted June 30 ending raw materials inventory is 16,800 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 68,880 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $84,000 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $12.600. g. Monthly general and administrative expenses include $50,400 for administrative salaries and 0.9% monthly interest on the long- term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials Search Prev 1 of 1 L ASUS Next F2 F3 F4 F5 F6 F8 F9 F10 F11 מן F12 Prt Sc Insert De

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

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...

See similar textbooks