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.