Capp Corporation is a producer of industrial goods. Data regarding operations follow: Data for Sales and...
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Capp Corporation is a producer of industrial goods. Data regarding operations follow: Data for Sales and Cash Collections: Sales are budgeted at $175,000 for October, $180,000 for November, $170,000 for December, and $190,000 for January. The average selling price is $50 per unit. • Collections are expected to be 60% in the month of sale, 35% in the month following the sale, and 5% uncollectible. The October beginning balance in the accounts receivable account is $60,000. All of it will be collected in October. Additional Data for Production and Raw Materials: (Note use the sales information above and the following data). The company desires an ending merchandise inventory (finished goods) equal to 20% of the following month's sales. • The beginning merchandise balance (finished goods) is 1,100 units. It takes 4 items of materials per each finished unit. Each item of raw materials average cost is $10. • The company desires an ending raw materials equal to 10% of the following month's required production needs. • The beginning raw materials balance is 4,000 units. Additional Data for Expected Cash Payments: . 40% of the merchandise is paid for in the month of purchase, with the remaining 60% paid in the month following the purchase. • The October beginning balance in the accounts payable account is $55,000. All of it will be paid in October. Required: a. Prepare a Schedule of Expected Collections for October, November, and December. b. Prepare a Production Schedule for October, November, December and the fourth quarter. Capp Corporation is a producer of industrial goods. Data regarding operations follow: Data for Sales and Cash Collections: Sales are budgeted at $175,000 for October, $180,000 for November, $170,000 for December, and $190,000 for January. The average selling price is $50 per unit. • Collections are expected to be 60% in the month of sale, 35% in the month following the sale, and 5% uncollectible. The October beginning balance in the accounts receivable account is $60,000. All of it will be collected in October. Additional Data for Production and Raw Materials: (Note use the sales information above and the following data). The company desires an ending merchandise inventory (finished goods) equal to 20% of the following month's sales. • The beginning merchandise balance (finished goods) is 1,100 units. It takes 4 items of materials per each finished unit. Each item of raw materials average cost is $10. • The company desires an ending raw materials equal to 10% of the following month's required production needs. • The beginning raw materials balance is 4,000 units. Additional Data for Expected Cash Payments: . 40% of the merchandise is paid for in the month of purchase, with the remaining 60% paid in the month following the purchase. • The October beginning balance in the accounts payable account is $55,000. All of it will be paid in October. Required: a. Prepare a Schedule of Expected Collections for October, November, and December. b. Prepare a Production Schedule for October, November, December and the fourth quarter.
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a Schedule of Expected Collections October Sales 175000 Collections 60 in the month of sale 175000 60 105000 35 in the month following the sale 180000 ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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