.
| The WRT Corporation makes collections on sales according to the following schedule: |
| 30% in month of sale |
| 64% in month following sale |
| 6% in second month following sale |
| The following sales have been are expected: |
| Expected Sales | |
| April | $100,000 |
| May | $110,000 |
| June | $100,000 |
| Budgeted cash collections in June should be budgeted to be: |
$100,400$100,600$106,400$100,000
2.
The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,900 direct labor-hours will be required in August. The variable overhead rate is $7 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $43,230 per month, which includes depreciation of $3,530. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
$67,000$70,530$27,300$39,700
<div id=’modalCtr’> <div class=’mbody’ style=’padding: 0px;’> <!– Modal content for non-study mode –> <div style=’padding: 15px 14px 0px;’> <!– if instructions are not given -no instructions_container –><div id=’noinstructionCtr’ style=’padding-left: 90px; position: relative;’> <span style=’left: 0px; top: 0px; position: absolute;’> <img alt=” src=’http://connect.mheducation.com:80/connectweb/branding/common/images/null_instructor.png’> </span> <span style=’background: url(‘http://connect.mheducation.com:80/connectweb/branding/common/images/template/curve_ecebe5_pointer.gif’) no-repeat 0px 0px; left: 76px; top: 20px; width: 15px; height: 26px; display: block; position: absolute;’> </span> <!– yellowcurve_pointer –> <div style=’background: no-repeat 0px 0px rgb(236, 235, 229); height: 6px; overflow: hidden;’> <div style=’background-position: 0px -66px; width: 6px; height: 6px; overflow: hidden; float: left; background-image: url(‘http://connect.mheducation.com:80/connectweb/branding/common/images/template/curve_ecebe5.gif’); 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background-repeat: no-repeat;’></div> </div> </div><!– no instructions_container ends here–> <!–limitaion container starts here –> <div style=’margin-top: 20px;’> <ul> <li style=’margin-bottom: 15px; list-style-type: none;’> <div> <div style=’width: 100px; color: rgb(243, 116, 33); padding-top: 6px; font-size: 16px; font-weight: bold; float: left;’> Due date: </div> <div style=’width: 335px; font-size: 24px; float: left;’> 11/18/2015 at 6:30 PM </div> <div style=’clear: both;’></div> </div> <!– limitations_div –> <div style=’clear: both;’></div> </li> <li style=’margin-bottom: 15px; list-style-type: none;’> <div> <div style=’width: 100px; color: rgb(243, 116, 33); padding-top: 6px; font-size: 16px; font-weight: bold; float: left;’> Attempts: </div> <div style=’width: 300px; font-size: 24px; float: left;’> 1 of 1 assignment attempts </div> <div style=’width: 145px; color: rgb(102, 102, 102); padding-top: 4px; font-size: 12px; float: right;’> </div> <div style=’clear: both;’></div> </div> <!– limitations_div –> <div style=’clear: both;’></div> </li> <li style=’margin-bottom: 5px; list-style-type: none; background-color: rgb(236, 235, 229);’> <div style=’width: 100%; font-size: 12px; float: left;’> <p>If your instructor makes any policy changes while you’re in the middle of an attempt, the changes will only apply to later attempts.</p><br> </div> </li> <li style=’margin-bottom: 5px; list-style-type: none; background-color: rgb(236, 235, 229);’> <div style=’width: 100%; font-size: 12px; float: left;’><p>Note : this assignment will be automatically submitted to your instructor on the due date even if your work is incomplete.</p><!–<p>You’ll be able to see your results for each question immediately.</p>–> </div></li> </ul> </div> <!– limitations_container –> </div> <!– cellular_homework_container –><br> <!– event driven policies changes –> <!– start Chemdraw changes (commented below code block to hide IE protected mode message in ezto) <div id=’chemdrawDiv’ style=’padding: 15px 5px 0; font-size: 14px; display:none;’><div style=’background: #dceef9 url(http://connect.mheducation.com:80/connectweb/branding/common/images/template/rounded_corner.gif) no-repeat 0 0;’> <div style=’background: #dceef9 url(http://connect.mheducation.com:80/connectweb/branding/common/images/template/rounded_corner.gif) no-repeat right bottom; margin-left: 10px; padding: 10px 5px; *overflow: hidden;’> <h4 style=’background: url(http://connect.mheducation.com:80/connectweb/branding/common/images/template/notification_icon.gif) no-repeat 0 0; padding: 5px 0 8px 40px; font-size: 14px;’> NOTE: Chemdraw cannot run with Explorer in ‘Protected Mode’ </h4> </div> </div> <div style=’padding: 18px 17px;’> <div> <a href=’javascript:;’ onclick=’javascript:toggleContent();’ id=’protectedMode’ style=’color: #1086d9; text-decoration: none; background: url(http://connect.mheducation.com:80/connectweb/branding/common/images/template/arrows.gif) no-repeat 0 5px; padding-left: 13px; background-position:0 -17px’ class=’hidden’>How to disable protected mode</a> </div> <div id=’protectedContainer’ style=’padding: 15px 10px; display: none;’> <p>(If you are in a school computer lab, ask for help from an administrator.)</p> <ul style=’margin: 15px;’> <li style=’margin-top: 8px; list-style: none outside none;’>1. Click the <strong>Tools</strong> menu in <strong>Internet Explorer</strong> and select <strong>Internet Options</strong>.</li> <li style=’margin-top: 8px; list-style: none outside none;’>2. When the <strong>Internet Options</strong> window opens, click the <strong>Security</strong> tab.</li> <li style=’margin-top: 8px; list-style: none outside none;’>3. Uncheck the box that says <strong>Enable Protected Mode</strong>, then click <strong>Apply</strong>.</li> <li style=’margin-top: 8px; list-style: none outside none;’>4. Click <strong>OK</strong>.</li> <li style=’margin-top: 8px; list-style: none outside none;’>5. Quit <strong>Internet Explorer</strong>, then re-open it.</li> </ul> <p style=’text-align: center; margin-top: 20px;’><em>The next time you open Chemdraw, it should launch successfully.</em></p> </div> </div><script>function toggleContent(){$(‘a#protectedMode’).toggleClass(‘hidden’);if($(‘a#protectedMode’).hasClass(‘hidden’)){$(‘a#protectedMode’).css(‘background-position’,’0 -17px’);$(‘#protectedContainer’).hide();}else{$(‘a#protectedMode’).css(‘background-position’,’0 4px’);$(‘#protectedContainer’).show();}}</script><script>if($.cookie(‘chemdrawMessage’) ==’true’){$(‘#chemdrawDiv’).show();}else{$(‘#chemdrawDiv’).hide();}</script> </div> <!– End Chemdraw changes–> </div> <!– mbody –> </div> <!– modalCtr –>
3.
| Richards Corporation has the following budgeted sales for the first half of next year: |
| Cash Sales | Credit Sales | |
| January | $80,000 | $180,000 |
| February | $85,000 | $200,000 |
| March | $36,000 | $160,000 |
| April | $41,000 | $136,000 |
| May | $51,000 | $230,000 |
| June | $110,000 | $260,000 |
|
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: |
| Collections on credit sales: |
| 55% in month of sales |
| 30% in month of following sales |
| 15.0% in second month following sales |
|
The accounts receivable balance on January 1 is $68,000. Of this amount, $54,000 represents uncollected December sales and $14,000 represents uncollected November sales. |
| The total cash collected during January would be: |
$241,000$300,000$120,000$229,000
4.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow:
| • |
Sales are budgeted at $380,000 for November, $400,000 for December, and $400,000 for January. |
| • |
Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. |
| • | The cost of goods sold is 75% of sales. |
| • |
The company would like to maintain ending merchandise inventories equal to 65% of the next month’s cost of goods sold. Payment for merchandise is made in the month following the purchase. |
| • | Other monthly expenses to be paid in cash are $22,200. |
| • | Monthly depreciation is $19,400. |
| • | Ignore taxes. |
| Balance Sheet | |
| October 31 | |
| Assets | |
| Cash | $32,000 |
| Accounts receivable, net of allowance for uncollectible accounts | 80,000 |
| Merchandise inventory | 185,250 |
| Property, plant and equipment, net of $608,000 accumulated depreciation | 1,190,000 |
| Total assets |
$1,487,250 |
| Liabilities and Stockholders’ Equity | |
| Accounts payable | $250,000 |
| Common stock | 880,000 |
| Retained earnings | 357,250 |
| Total liabilities and stockholders’ equity |
$1,487,250 |
December cash disbursements for merchandise purchases would be:
$275,250$294,750$300,000$195,000
5.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow:
| • |
Sales are budgeted at $350,000 for November, $370,000 for December, and $370,000 for January. |
| • |
Collections are expected to be 80% in the month of sale, 18% in the month following the sale, and 2% uncollectible. |
| • | The cost of goods sold is 75% of sales. |
| • |
The company would like to maintain ending merchandise inventories equal to 80% of the next month’s cost of goods sold. Payment for merchandise is made in the month following the purchase. |
| • | Other monthly expenses to be paid in cash are $21,900. |
| • | Monthly depreciation is $19,100. |
| • | Ignore taxes. |
| Balance Sheet | |
| October 31 | |
| Assets | |
| Cash | $29,000 |
| Accounts receivable, net of allowance for uncollectible accounts | 77,000 |
| Merchandise inventory | 210,000 |
| Property, plant and equipment, net of $605,000 accumulated depreciation | 1,175,000 |
| Total assets |
$1,491,000 |
| Liabilities and Stockholders’ Equity | |
| Accounts payable | $287,500 |
| Common stock | 850,000 |
| Retained earnings | 353,500 |
| Total liabilities and stockholders’ equity |
$1,491,000 |
The difference between cash receipts and cash disbursements in December would be:
$16,000$132,100$62,600$30,550
6.
LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.6 hours of direct labor at the rate of $15.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.
The budgeted direct labor cost per unit of Product WZ would be:
$15.00 per unit
$31.80 per unit
$8.20 per unit
$54.00 per unit
7.
Skeete Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $4.10 per unit. The budgeted fixed selling and administrative expense is $30,150 per month, which includes depreciation of $3,420. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 4,000 units are planned to be sold in November.
| Required: |
| Prepare the selling and administrative expense budget for November. |
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