The ABC Company manufactures and sells a seasonal product that has peak sales in the third...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The ABC Company manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for year 2- the coming year and for the first two quarters of year 3 O a. The company's single product sells for BD: 10 per unit. Budgeted sale in units for the next six quarters are as follows (sales are on credit) Year 2 quarter year 3 quarter Budgeted unit sales - 50000 75000 120000 4 60000 80000 2 90000 b. Sales are collected in the following pattern: 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, year 2, the Compnay's balance sheet showed BD: 70000/- in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. O c. The company desires an ending finished goods inventory at the end of each quarter equal to 35% of the budgeted unit sales for the next quarter. On December 31, year 1 the company had 14,000 units on hand. d. Six pounds of raw materials are required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 24,000 pounds of raw materials on hand. e. The raw material cost BD:0.900 per ach. Raw materials purchases are paid in the following pattern: 60% paid in the quarter the purchase are made, and the remaining 40% paid in the following quarter.On January 1, yea 2, the company's balance sheet showed BD: 80000 in Accounts payable for raw material purchases, all of which will be paid for in the first quarter of the year. Page 2 of g Required: Prepare the following budgets and schedules for the year, showing both quarterly and total figures: 1. A sales budget and a schedule of expected cash collections. 2. A production budget. 3. A direct materials budget and a schedule of expected cash payments for purchases of materials. The ABC Company manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for year 2- the coming year and for the first two quarters of year 3 O a. The company's single product sells for BD: 10 per unit. Budgeted sale in units for the next six quarters are as follows (sales are on credit) Year 2 quarter year 3 quarter Budgeted unit sales - 50000 75000 120000 4 60000 80000 2 90000 b. Sales are collected in the following pattern: 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, year 2, the Compnay's balance sheet showed BD: 70000/- in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. O c. The company desires an ending finished goods inventory at the end of each quarter equal to 35% of the budgeted unit sales for the next quarter. On December 31, year 1 the company had 14,000 units on hand. d. Six pounds of raw materials are required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 24,000 pounds of raw materials on hand. e. The raw material cost BD:0.900 per ach. Raw materials purchases are paid in the following pattern: 60% paid in the quarter the purchase are made, and the remaining 40% paid in the following quarter.On January 1, yea 2, the company's balance sheet showed BD: 80000 in Accounts payable for raw material purchases, all of which will be paid for in the first quarter of the year. Page 2 of g Required: Prepare the following budgets and schedules for the year, showing both quarterly and total figures: 1. A sales budget and a schedule of expected cash collections. 2. A production budget. 3. A direct materials budget and a schedule of expected cash payments for purchases of materials.
Expert Answer:
Answer rating: 100% (QA)
Based on the provided information we are required to prepare a Sales Budget Cash Collections Schedule Production Budget and Direct Materials Budget with associated cash payments schedule Lets tackle e... View the full answer
Related Book For
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
Posted Date:
Students also viewed these accounting questions
-
The substitution u=sin(x) is suitable to evaluate the integral casx dx sin 'x O False O True
-
Saeed has finally found a Business-Loan that he has been looking for since a long time. He decided to take this loan and start his business. The bank offered him a flat 4.0% yearly interest rate...
-
Barnaby is a farmer who receives two-thirds of his total income from the sale of oranges. After two consecutive years of early frosts that destroyed his orange harvest, Barnaby found himself deep in...
-
The table below lists leading digits of 317 inter-arrival Internet traffic times for a computer, along with the frequencies of leading digits expected with Benford's law (from Table 11-1 in the...
-
A rectangular steel container has the outside dimensions shown in the figure The thickness of the bottom and top walls is t, and the thickness of side walls is t/2. Determine t if the weight of the...
-
If the capacitance of a cell membrane is measured to be \(6.0 \times 10^{-11} \mathrm{~F}\), what is the area? A. \(6.0 \times 10^{-13} \mathrm{~m}^{2}\) B. \(6.0 \times 10^{-11} \mathrm{~m}^{2}\) C....
-
Reed Paper, Co., produces the paper used by wallpaper manufacturers. Reed's fourstage process includes mixing, cooking, rolling, and cutting. During March, the Mixing Department started and completed...
-
Can you elaborate on the role of deferred constraint checking in PostgreSQL transactions, its implications for concurrency control, and how it can be utilized to achieve consistency in complex data...
-
Give a little context and background about the Afghanistan War How has the Afghanistan War affected media reporting and technology?
-
Who issues warrants? Multiple choice question. Investment bankers Stock exchanges The firm Stock brokers
-
if you are twenty years old and have the ability to save $1000 a year for the next 5 years, how much would you have at the age of 67 with an interest of 8% if invested in the stock market?
-
During the year ended December 31, 2021, Bon Jovi Company incurred direct labor costs of $750,000 and manufacturing overhead costs of $500,000. As of January 1, 2021, Bon Jovi had the following...
-
Cigna Inc. issued an annual coupon bond with 14% coupon rate last year. It has 14 years remaining to maturity. If investors require 6% return, how much should they pay for the bond? Assume that par...
-
How might the organizational culture of a criminal justice organization impede management goals to reduce misconduct?
-
V. Find the following: a. Derivative of the function. (2pts) b. sope of the function at the given point. (Ipt) c. Equation of the tangent line at the given point. (2pts) 1. f(x) = -4x* + 5x + 3x...
-
Solve each equation or inequality. |6x8-4 = 0
-
Some analysts argue that the payback period criterion is actually a measure of project risk. What is the logic behind this belief?
-
Describe the concept of a realized rate of return as if you were explaining it to your grandfather, who has never had a finance class.
-
What steps can a firm take to reduce foreign exchange rate risk? Indicate at least two different techniques.
-
Let \(\left\{x_{n}ight\}_{n=1}^{\infty}\) be a sequence of real numbers defined by \[x_{n}=\frac{n}{n+1}-\frac{n+1}{n},\] for all \(n \in \mathbb{N}\). Compute \[\liminf _{n ightarrow \infty}...
-
Let \(\left\{x_{n}ight\}_{n=1}^{\infty}\) be a sequence of real numbers defined by \[x_{n}=\left\{\begin{array}{rl}-1 & n=1+3(k-1), k \in \mathbb{N} \\0 & n=2+3(k-1), k \in \mathbb{N} \\1 &...
-
Let \(\left\{x_{n}ight\}_{n=1}^{\infty}\) and \(\left\{y_{n}ight\}_{n=1}^{\infty}\) be sequences of real numbers such that \[\lim _{n ightarrow \infty} x_{n}=x\] and \[\lim _{n ightarrow \infty}...
Study smarter with the SolutionInn App