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Midterm

BUS-2003 Study Guide - Midterm Guide: Computer Hardware, Budget, Kilogram


Department
BUSINESS AND ADMINISTRATION
Course Code
BUS-2003
Professor
Debbie Mortimer
Study Guide
Midterm

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DEPARTMENT OF BUSINESS AND ADMINISTRATION
BUS2003
Test 4
November 17, 2010
Name:____________________________________________________
Student Number: __________________________________________
Instructions: Please answer the following questions on the examination test sheets. If you
need more room, please use the back of the pages. Show your calculations in detail.
Grading:
Q1
/8
Q2
/18
Q3
/ 12
Q4
/ 10
Total
/48

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Question One: (8 marks)
TabComp Inc. is a retail distributor for MZB-33 computer hardware and related software.
TabComp prepares annual sales forecasts, of which the first six months of the coming year are
presented below:
Cash sales account for 25% of TabComp's total sales, 30% of the total sales are paid by bank
credit card, and the remaining 45% are on open account (TabComp's own charge accounts). The
cash and bank credit card sale payments are received in the month of the sale. Bank credit card
sales are subject to a 4% discount, which is deducted immediately. The cash receipts for sales on
open account are 70% in the month following the sale and 28% in the second month following
the sale; the remaining are uncollectible.
TabComp's month-end inventory requirements for computer hardware units are 30% of the next
month's sales. The units must be ordered two months in advance due to long lead times quoted by
the manufacturer.

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Required:
a) Calculate the cash that TabComp can expect to collect during April. Show all of your
calculations. (4 marks)
b) Determine the number of computer hardware units that should be ordered in January. Show all
of your calculations. (4 marks)
Question One Solution:
a) The cash that TabComp can expect to collect during April is calculated below:
1 mark per calculation = 4 marks
b) The number of units that TabComp should order in January is calculated as follows:
1 mark per calculation = 4 marks
January sales 130
BI (130 x 0.30) (39)
EI (120 x 30%) 36
Total 127
Question Two:
A sales budget is given below for one of the products manufactured by the OMI Co.:
January 25,000 units
February 40,000 units
March 65,000 units
April 45,000 units
May 35,000 units
June 30,000 units
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