Question

Is this correct? IF not, please indicate where. Also, if I have left out any calculations explaining, please add... Thank you.

Question 1
Pottery Manufacturing Limited has projected sales and production in units for the second quarter of the coming year as follows:
		October	November	December
	Sales	50,000	40,000	60,000
	Production	60,000	50,000	50,000
Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $100,000 per month, paid in the month incurred. The accounts payable balance on September 30 totals $190,000, which will be paid in October. All units are sold on account (as credit sales) for $14 each. There are no cash sales. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on October 1 totalled $500,000 ($90,000 from August's sales and the remainder from September).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements for the Pottery Manufacturing Limited.
	October	November	December
Acc. Payable	190000
October production cost	120000	180000
November production cost		100000	150000
December production cost			100000
cash disbursements for production cost	310000	280000	250000
selling and admin. Expenses	100000	100000	100000
Total cash disbursements	410000	380000	350000
	October	November	December
Units made	60000	50000	50000
production cost/unit	5	5	5
budgeted production cost	300000	250000	250000
	October	November	December
cash reciepts of Acc. Recievables
August sales	90000
September sales	307500	102500
October sales	420000	210000	70000
November sales		336000	168000
December sales			504000
Total Cash Receipts	817500	648500	742000
	October	November	December
Units sold	50000	40000	60000
Selling Price/ unit	14	14	14
budgeted sales	700000	560000	840000

Answer 1

the answer is correct.

a. Prepare a schedule for each month showing budgeted cash disbursements for the Pottery Manufacturing Limited. (5 marks)
	October	November	December
Acc. Payable	$190,000.00
October production cost	$120,000.00	$180,000.00
November production cost		$100,000.00	$150,000.00
December production cost			$100,000.00
cash disbursements for production cost	$310,000.00	$280,000.00	$250,000.00
selling and admin. Expenses	$100,000.00	$100,000.00	$100,000.00
Total cash disbursements	$410,000.00	$380,000.00	$350,000.00
	October	November	December
Units made	60000	50000	50000
production cost/unit	5	5	5
budgeted production cost	$300,000.00	$250,000.00	$250,000.00
	October	November	December
cash reciepts of Acc. Recievables
August sales	$ 90,000.00
September sales	$307,500.00	$102,500.00
October sales	$420,000.00	$210,000.00	$ 70,000.00
November sales		$336,000.00	$168,000.00
December sales			$504,000.00
Total Cash Receipts	$817,500.00	$648,500.00	$742,000.00
	October	November	December
Units sold	50000	40000	60000
Selling Price/ unit	14	14	14
budgeted sales	$700,000.00	$560,000.00	$840,000.00