CASE 1 MASTER BUDGET
Colosimo Company started business on January 1, 2016.The company estimated that sales for the first six months would beas follows:
Month
Units
Dollars
January
10,000
$ 50,000
February
8,000
40,000
March
15,000
75,000
April
17,000
85,000
May
22,000
110,000
June
30,000
150,000
The company sells all items on account and expectscollections of accounts receivable to be as follows: 60% in themonth of the sale, and the remaining 40% in the month after thesale.
Required:
It takes two pounds of raw material to make one unit offinished product. The company wants to keep an ending inventory ofraw material equal to 30% of next monthâs production needs. Howmany pounds of raw material should be purchased in each of thefirst three months?
The raw material costs $2 per pound. The company paysfor 70% of its purchases during the month of purchase and theremainder in the following month. How much cash will be disbursedduring the month of March for the purchase of rawmaterial?
The projected cash balance on March 1 is $13,500. Whatis the estimated cash balance at the end of the month? (Prepare aformal cash budget for the month of March.)
CASE 1 MASTER BUDGET
Colosimo Company started business on January 1, 2016.The company estimated that sales for the first six months would beas follows:
Month | Units | Dollars | ||
January | 10,000 | $ 50,000 | ||
February | 8,000 | 40,000 | ||
March | 15,000 | 75,000 | ||
April | 17,000 | 85,000 | ||
May | 22,000 | 110,000 | ||
June | 30,000 | 150,000 | ||
The company sells all items on account and expectscollections of accounts receivable to be as follows: 60% in themonth of the sale, and the remaining 40% in the month after thesale.
Required:
It takes two pounds of raw material to make one unit offinished product. The company wants to keep an ending inventory ofraw material equal to 30% of next monthâs production needs. Howmany pounds of raw material should be purchased in each of thefirst three months?
The raw material costs $2 per pound. The company paysfor 70% of its purchases during the month of purchase and theremainder in the following month. How much cash will be disbursedduring the month of March for the purchase of rawmaterial?
The projected cash balance on March 1 is $13,500. Whatis the estimated cash balance at the end of the month? (Prepare aformal cash budget for the month of March.)
Related questions
| [The following information applies to the questionsdisplayed below.] |
Morganton Company makes one product and it provided thefollowing information to help prepare the master budget for itsfirst four months of operations: |
| a. | The budgeted selling price per unit is $65. Budgeted unit salesfor June, July, August, and September are 9,900, 30,000, 32,000,and 33,000 units, respectively. All sales are on credit. |
| b. | Forty percent of credit sales are collected in the month of thesale and 60% in the following month. |
| c. | Theending finished goods inventory equals 30% of the following monthâsunit sales. |
| d. | The ending raw materials inventory equals 20% of the followingmonthâs raw materials production needs. Each unit of finished goodsrequires 4 pounds of raw materials. The raw materials cost $2.50per pound. |
| e. | Forty percent of raw materials purchases are paid for in themonth of purchase and 60% in the following month. |
| f. | The direct labor wage rate is $12 per hour. Each unit offinished goods requires two direct labor-hours. |
| g. | The variable selling and administrative expense per unit sold is$1.90. The fixed selling and administrative expense per month is$69,000. |
Accordingto the production budget, how many units should be produced in Julyand,
|
Please show all work , I need to see the stepscalculated out...Thank you!!
Morganton Company makes one product and it provided thefollowing information to help prepare the master budget for itsfour months of operations:
| (a) | The budgeted selling price per unit is $60. Budgeted unit salesfor June, July, August, and September are 9,200, 23,000, 25,000,and 26,000 units, respectively. All sales are on credit. |
| (b) | Thirty-percent ofcredit sales are collected in the month of the sale and 70% in thefollowing month. |
| (c) | The ending finishedgoods inventory equals 20% of the following monthâs unitsales. |
| (d) | The ending raw materials inventory equals 10% of the followingmonthâs raw materials production needs. Each unit of finished goodsrequires 4 pounds of raw materials. The raw materials cost $2.50per pound. |
| (e) | Thirty-percent ofraw materials purchases are paid for in the month of purchase and70% in the following month. |
| (f) | The direct labor wage rate is $13 per hour. Each unit offinished goods requires two direct labor-hours. |
| (g) | The variable selling and administrative expense per unit sold is$1.80. The fixed selling and administrative expense per month is$62,000. |
| If 100,800 poundsof raw materials are needed to meet production in August, how manypounds of raw materials should be purchased in July? |
| Rawmaterials to be purchased | pounds |
