In: Accounting
Adelphi Company has budgeted activity for March to reflect net income $105,000. All sales are credit sales. Receivables are planned to increase (decrease -) by $3,000 payables to increase (decrease -) by $13,000 and Depreciation Expense is $60,000. Use this information to determine how much cash will increase (decrease) during the month of March. (Decreases in accounts receivable or accounts payable will have a negative sign in front of number. Round & enter final answer to the nearest whole dollar.) During FY 2018, Adelphi Company reported sales of $400,000, a contribution margin of $5.00 per unit, fixed costs of $80,000, and net income of $40,000. Use this information to determine the number of units Adelphi sold during FY 2018. (Round answer to nearest whole number) Towson Company manufactures book cases, and each requires 40 board feet of lumber. Towson expects that 1,700 and 1,750 book cases will be built in June and July, respectively. Towson keeps lumber on hand at 35% of the next month's production needs. Use this information to determine number board feet of lumber that Towson Company should buy in June. (Round & enter final answers to the nearest whole number.)
During FY 2018, Adelphi Company reported sales of $400,000, a contribution margin of $5.00 per unit, fixed costs of $80,000, and net income of $40,000. Use this information to determine the number of units Adelphi sold during FY 2018. (Round answer to nearest whole number)
Towson Company manufactures book cases, and each requires 40 board feet of lumber. Towson expects that 1,700 and 1,750 book cases will be built in June and July, respectively. Towson keeps lumber on hand at 35% of the next month's production needs. Use this information to determine number board feet of lumber that Towson Company should buy in June. (Round & enter final answers to the nearest whole number.)
Requirement 1:
Net Income | $ 105,000.00 | |
Adjustments to reconcile net income to | ||
net cash provided by operating activities | ||
Depreciation | $ 60,000.00 | |
Increase in Accounts Receivable | $ -3,000.00 | |
Increase in Accounts Payable | $ 13,000.00 | |
$ 70,000.00 | ||
Net increase in cash during month of March | $ 175,000.00 |
Requirement 2:
Number of Units sold = (Fixed Expenses + Net Income) / Contribution Margin per Unit
= ($80,000 + $40,000) / $5
= $120,000 / $5
= 24,000 units
Requirement 3:
Units to be produced | 1,700 | book cases |
Board feet of lumber for one book case | 40 | feet |
Total Requirement for production | 68,000 | feet |
Add: Desired Ending Inventory of Lumber | 24,500 | feet |
Total Requirement | 92,500 | feet |
Less: Opening Inventory of Lumber | 23,800 | feet |
Lumber to be purchased | 68,700 | feet |
Working for July:
Units to be produced | 1,750 | book cases |
Board feet of lumber for one book case | 40 | feet |
Total Requirement for production | 70,000 | feet |
Note: It is assumed that Towson Company is not new in business and is already maintaing ending inventory at 35% of next month production requirements.