For the purpose of preparing cash projections and other budget estimates for the third quarter of 200B, the following information is presented to you by the management of Virgo Corporation:

	Pesos	Units
April	530,000	10,600
May	550,000	11,000
June	570,000	11,400

Projected sales for the four months following the second quarter.

	Pesos	Units
July	540,000	10,800
August	550,000	11,000
September	560,000	11,200
October	580,000	11,600

All sales are on charge basis and billed at the end of the month. A 5% discount is given on collections within 15 days from billing date. Sales collections are generally made as follows:
70% within the month following the billing date (40% of this being collected within
the discount period)
27% on the second month following the billing date
3% considered uncollectible
Merchandise purchases are generally paid as follows:
50% within the month they are incurred
50% after the month they are incurred
Ending inventory in units (Cost per unit is P40.00) is 30% higher than the following month's sales units. Operating expenses are on cash basis and are estimated to be 15% of the current month's sales including monthly depreciation of P10,000. As of June 30, 200B, Accounts Receivable balance was P630,000 and Merchandise Inventory was P565,000.

18. The budgeted Cash collections for the month of July would be

19. The budgeted cash payments for the month of September would be

20. The projected net income for September would be

21. The balance of accounts receivable at the end of July, assuming that no uncollectible accounts are written off for July would be.

 

VII. Sales of C Company are budgeted at 15,000 units for the month of May. The following changes are expected at the end of May. Finished goods inventory will increase by 2,500 units. Materials inventory will decrease by 4,000 lbs. Accrued direct labor costs will increase by 18,000 and the accounts payable will increase by P55,000. Each unit of product requires 2 lbs of materials at P8/lb and 3 hours of direct labor at P11/hour.

22. How much is the budgeted direct labor cost?
23. How much is the budgeted direct matenal cost?
24. How much payments for materials will be made?
25. How much payments for prime costs will be made?

Answer rating: 100% (QA)

18 The budgeted cash collections for the month of July would be July Sales 10800 units x P540 per unit P5832000 Collections within the month 70 x P583... View the full answer