Compute the required answer for each of the following independent situations.

a). For next year, Penny Suits projects $8,000,000 of sales and total fixed manufacturing costs of $2,000,000. Variable manufacturing costs are estimated at 65 percent of sales. Assuming no change in inventory, what is the company?s projected cost of goods sold?

b). Tommy?s Company has projected the following information for October:

What are expected cash disbursements for inventory purchases for October?

c). Buda Corp. is attempting to budget its overhead costs for March 2014. Overhead is a mixed cost with the following flexible budget formula: y = $250,000 + $17.50X, where X represents machine hours. Fixed overhead includes $95,000 of depreciation. If Buda Corp. expects to utilize 7,500 machine hours in March, what is the company?s budgeted March overhead cost? How much cash will the company pay for budgeted overhead in March?

d). Elizabeth Enterprises expects to begin 2014 with a cash balance of $15,000. Cash collections from sales and on account during the year are expected to be $470,500. The firm wants to maintain a minimum cash balance of $5,000. Budgeted cash disbursements for the year are as follows:

The company can, if necessary, borrow in $1,000 amounts. Prepare a cash budget for 2014.

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Sales Gross profit (based on sales) Increase in Merchandise Inventory in October Decrease in Accounts Payable for October $800,000 25% $ 20,000 $ 45,000 Payoff of note payable Interest on note payable Purchase of computer system Payments for operating costs and inventory purchases Direct labor payments Cash overhead payments Cash selling and administrative payments $ 52,500 4,700 17,900 193,500 110,000 106,400 94,800 Sales Gross profit (based on sales) Increase in Merchandise Inventory in October Decrease in Accounts Payable for October $800,000 25% $ 20,000 $ 45,000 Payoff of note payable Interest on note payable Purchase of computer system Payments for operating costs and inventory purchases Direct labor payments Cash overhead payments Cash selling and administrative payments $ 52,500 4,700 17,900 193,500 110,000 106,400 94,800

Answer rating: 100% (QA)

Ans a Sales projection 8000000 Total fixed manufacturing cost 2000000 Variable manufacturing cost es... View the full answer