The management team at Blossom Corporation is capitalizing on the trend for live-edge cedar fireplace mantels-beautiful,...
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The management team at Blossom Corporation is capitalizing on the trend for live-edge cedar fireplace mantels-beautiful, simple, organic. In fact, sales are so strong they are running out of inventory. This means that budgeting for next year will be extremely important, to ensure sure that Blossom can source enough cedar. With budgeted sales as the starting point for the entire process, the management team agrees that the following levels present the most likely scenario for the first five months of the upcoming year. January February March April May Budgeted number of mantels to be sold. 420 430 440 420 460 In addition to sales volume, many other specifics are required in order to complete the company's operating budgets. Key details associated with prices, costs, and usage are as follows. Budgeted selling price is $500 per mantel. Each mantel measures 3 inches x 12 inches x 4 feet. Target ending inventory of finished mantels is 20% of next month's budgeted sales. However, beginning inventory on January 1 is expected to be only 42 units. Blossom' primary DM, rough-cut cedar, is purchased from the supplier already at the desired height and depth (3 inches high, 12 inches deep). Blossom cuts the cedar planks to the desired 4-foot lengths. Each rough-cut board costs Blossom $50 per foot. Target ending DM inventory (rough-cut cedar) is 50% of next month's production needs. DL to sand, stain, and treat the rough-cut cedar costs $20 per hour. Each mantel requires one hour of labor time. MOH resources include variable costs budgeted to be $10/board foot, plus budgeted monthly Fixed MOH costs of $4,400. Depreciation of $2,100 is included in that monthly fixed cost. SG&A costs are also broken down into their variable and fixed components: budgeted variable SG&A costs are $50/unit sold, while budgeted fixed monthly SG&A costs are $66,000, which includes $8,500 of depreciation. All sales are made on account, with 25% paying in the month of sale and 70% paying in the month following the sale. The remainder is considered uncollectible. December sales in the prior year were budgeted to be $235,000. Beginning finished goods inventory was held at a cost of $265/unit from the prior year. (a1) Prepare the Sales forecast (and corresponding schedule of cash receipts) for Blossom Corp. Budgeted Sales Volume January 420 February 430 March 440 Budgeted Selling Price $ 500 $ 500 $ 500 Budgeted Sales Revenue 210000 $ 215000 $ 220000 (a1) Prepare the Sales forecast (and corresponding schedule of cash receipts) for Blossom Corp. January 420 February 430 March 440 Quarter 1290 $ 500 $ 500 $ 500 $ 500 $ 210000 $ 215000 $ 220000 $ 645000 Collections from December 31 A/R Balance $ Collections from January Sales Collections from February Sales Collections from March Sales Total Cash Receipts January $ February $ $ $ $ N $ January February March $ $ Quarter $ $ $ $ $ Fabric January February $ $ $ $ January February March Quarter $ $ $ $ $ $ $ $ (a4) Prepare the DL budget for Blossom Corp. January February March $ $ $ $ $ $ (a4) Prepare the DL budget for Blossom Corp. January February March Quarter $ $ $ $ $ $ $ $ (a5) Prepare the MOH budget for Blossom Corp. 31 $ January February $ $ $ D o (a5) Prepare the MOH budget for Blossom Corp. 31 $ January February $ $ $ D o (a5) Prepare the MOH budget for Blossom Corp. January February March Quarter $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Attempts: 0 of 2 used Cohmit An Save for Later $ $ S $ $ $ $ $ $ $ $ $ Attempts: 0 of 2 used Submit Answer $ January $ February $ March $ $ $ $ $ $ $ $ $ $ $ $ $ Quarter $ January $ February $ March $ $ $ $ $ $ $ $ $ $ $ $ $ Quarter The management team at Blossom Corporation is capitalizing on the trend for live-edge cedar fireplace mantels-beautiful, simple, organic. In fact, sales are so strong they are running out of inventory. This means that budgeting for next year will be extremely important, to ensure sure that Blossom can source enough cedar. With budgeted sales as the starting point for the entire process, the management team agrees that the following levels present the most likely scenario for the first five months of the upcoming year. January February March April May Budgeted number of mantels to be sold. 420 430 440 420 460 In addition to sales volume, many other specifics are required in order to complete the company's operating budgets. Key details associated with prices, costs, and usage are as follows. Budgeted selling price is $500 per mantel. Each mantel measures 3 inches x 12 inches x 4 feet. Target ending inventory of finished mantels is 20% of next month's budgeted sales. However, beginning inventory on January 1 is expected to be only 42 units. Blossom' primary DM, rough-cut cedar, is purchased from the supplier already at the desired height and depth (3 inches high, 12 inches deep). Blossom cuts the cedar planks to the desired 4-foot lengths. Each rough-cut board costs Blossom $50 per foot. Target ending DM inventory (rough-cut cedar) is 50% of next month's production needs. DL to sand, stain, and treat the rough-cut cedar costs $20 per hour. Each mantel requires one hour of labor time. MOH resources include variable costs budgeted to be $10/board foot, plus budgeted monthly Fixed MOH costs of $4,400. Depreciation of $2,100 is included in that monthly fixed cost. SG&A costs are also broken down into their variable and fixed components: budgeted variable SG&A costs are $50/unit sold, while budgeted fixed monthly SG&A costs are $66,000, which includes $8,500 of depreciation. All sales are made on account, with 25% paying in the month of sale and 70% paying in the month following the sale. The remainder is considered uncollectible. December sales in the prior year were budgeted to be $235,000. Beginning finished goods inventory was held at a cost of $265/unit from the prior year. (a1) Prepare the Sales forecast (and corresponding schedule of cash receipts) for Blossom Corp. Budgeted Sales Volume January 420 February 430 March 440 Budgeted Selling Price $ 500 $ 500 $ 500 Budgeted Sales Revenue 210000 $ 215000 $ 220000 (a1) Prepare the Sales forecast (and corresponding schedule of cash receipts) for Blossom Corp. January 420 February 430 March 440 Quarter 1290 $ 500 $ 500 $ 500 $ 500 $ 210000 $ 215000 $ 220000 $ 645000 Collections from December 31 A/R Balance $ Collections from January Sales Collections from February Sales Collections from March Sales Total Cash Receipts January $ February $ $ $ $ N $ January February March $ $ Quarter $ $ $ $ $ Fabric January February $ $ $ $ January February March Quarter $ $ $ $ $ $ $ $ (a4) Prepare the DL budget for Blossom Corp. January February March $ $ $ $ $ $ (a4) Prepare the DL budget for Blossom Corp. January February March Quarter $ $ $ $ $ $ $ $ (a5) Prepare the MOH budget for Blossom Corp. 31 $ January February $ $ $ D o (a5) Prepare the MOH budget for Blossom Corp. 31 $ January February $ $ $ D o (a5) Prepare the MOH budget for Blossom Corp. January February March Quarter $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Attempts: 0 of 2 used Cohmit An Save for Later $ $ S $ $ $ $ $ $ $ $ $ Attempts: 0 of 2 used Submit Answer $ January $ February $ March $ $ $ $ $ $ $ $ $ $ $ $ $ Quarter $ January $ February $ March $ $ $ $ $ $ $ $ $ $ $ $ $ Quarter
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Excellence in Business Communication
ISBN: 978-0136103769
9th edition
Authors: John V. Thill, Courtland L. Bovee
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