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Part #4: E Company has budgeted sales revenues of $160,000 for May, $210,000 for June, $235,000...

Part #4: E Company has budgeted sales revenues of $160,000 for May, $210,000 for June, $235,000 for July, and $172,000 for August. To prepare a cash budget, the company must determine the budgeted cash collections from sales. Generally the trend has been 55 percent collected in the month of sale, 25 percent collected in the month following sale, 18 percent collected in the second month following sale, and 2 percent uncollectible. Also, E Company grants a 2 percent cash discount to customers who pay in the month of sale (so they only collect 98 percent of the total amount for those sales instead of the usual 100 percent). Prepare a schedule of cash collections for the month of July only. Part #5: At the beginning of September, L Company had 1,600 finished goods units. Budgeted sales for October, November, December, and January are 8,000 units and 10,200 units and 13,600 units and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget with columns for October, November, December and Total 4th Quarter.Part #6: H Company’s Direct Labor Budget indicates the number of direct labor hours to be used in July, August, and September are 20,000 and 19,100 and 22,900 respectively. Variable overhead is expected to be $0.80 per direct labor hour. Fixed overhead per month is expected to be $6,200. Prepare an Overhead Budget with columns for July, August, September, and Total 3rd Quarter.   

Part #5: At the beginning of September, L Company had 1,600 finished goods units. Budgeted sales for October, November, December, and January are 8,000 units and 10,200 units and 13,600 units and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget with columns for October, November, December and Total 4th Quarter.

Part #6: H Company’s Direct Labor Budget indicates the number of direct labor hours to be used in July, August, and September are 20,000 and 19,100 and 22,900 respectively. Variable overhead is expected to be $0.80 per direct labor hour. Fixed overhead per month is expected to be $6,200. Prepare an Overhead Budget with columns for July, August, September, and Total 3rd Quarter.

Solutions

Expert Solution

Part # 4

Budgeted cash collections for the month of July
Particulars May June July August
$ $ $ $
Sales 160000 210000 235000 172000
Collection in the month of sale @ 55% of sales 88000 115500 129250 94600
(-) Cash Discount @ 2 % of collection in the month of sale 1760 2310 2585 1892
Net collection after cash discount 86240 113190 126665 92708
Collection in the month following sale @ 25% 40000 52500 58750
Collection in the second month following sale @ 18% 28800 37800
Budgeted cash collection for the month of July 207965

Part # 5

Production Budget
Particulars October November December Total 4th Quarter
Units Units Units
i)   Budgeted Sales units 8000 10200 13600 31800
ii) Opening 1600 2040 2720 6360
iii) Production units to meet the current sales units (i-ii) 6400 8160 10880 25440
iv) Following month’s budgeted sales @ 20 % 2040 2720 1480 6240
Budgeted production (iii+iv) 8440 10880 12360 31680

Part # 6

Overhead Budget
Particulars July August September Total 3rd Quarter
Budgeted direct labor 20000 19100 22900 62000
i)Variable overhead $ 16000 $ 15280 $ 18320 $ 49600
( $ 0.80 x 20000) ( $ 0.80 x 19100) ( $ 0.80 x 22900) ( $ 0.80 x 62000)
ii)Fixed overhead $ 6200 $ 6200 $ 6200 $ 18600
Total overhead (i+ii) $ 22200 $ 21480 $ 24520 $ 68200

ekkarill92 answered 1 month ago
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