Question :
182. The treasurer of Systems Company has accumulated the following budget : 1239566
182. The treasurer of Systems Company has accumulated the following budget information for the first two months of the coming year:
March
April
Sales.
$450,000
$520,000
Manufacturing costs
290,000
350,000
Selling and administrative expenses
41,400
46,400
Capital additions
250,000
—
The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6,400 of the probable monthly selling and administrative expenses. Insurance is paid in February and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are expected to be paid in March.Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500 ($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000.Prepare a monthly cash budget for March and April.
183. Door & Window Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows:
August
$120,000
September
200,000
October
230,000
The company expects to sell 40% of its merchandise for cash. Of the sales on account, 25% are expected to be collected in the month of the sale and the remainder in the following month.Prepare a schedule indicating total cash collections for August, September, and October.
184. Star Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows:
August
$250,000
September
200,000
October
275,000
The company expects to sell 50% of its merchandise for cash. Of the sales on account, 30% are expected to be collected in the month of the sale and the remainder in the following month.Prepare a schedule indicating cash collections for August, September, and October.
185. Doran Technologies produces a single product. Expected manufacturing costs are as follows:Variable costs
Direct materials
$4.00 per unit
Direct labor
$1.20 per unit
Manufacturing overhead
$0.95 per unit
Fixed costs per month
Depreciation
$6,000
Supervisory salaries
$13,500
Other fixed costs
$3,850
Required:Estimate manufacturing costs for production levels of 25,000 units, 30,000 units, and 35,000 units per month.
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