Question

A- All of Winner Corporation's sales are on account. 35% of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder (20%) are collected in the second month following sale. The following are budgeted sales data for the company:

Total sales

January $50,000

February  $60,000

March $40,000   

April $30,000

What is the amount of cash that should be collected in April? Show your calculations

2- Alfa Corporation manufactures and sells bikes. Expected mug sales Alfa (in units) for the next three months are as follows:

Budgeted unit sales

October 30,000

November  34,000

December  36,000

Alfa likes to maintain a finished goods inventory equal to 30% of the next month's estimated sales. How many bikes should Alfa plan on producing during the month of November? Show your calculations

3- C- KDDM Corporation makes one product. April May June July Budgeted unit sales 8,200 8,700 13,100 13,600 respectivley Each unit of finished goods requires 4 pounds of raw materials. The ending finished goods inventory equals 10% of the following month's sales. The ending raw materials inventory equals 40% of the following month's raw materials production needs. What is the budgeted raw material purchases for May? Show your calculations

4- D-The manufacturing overhead budget at XYZ Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,400 direct labor-hours will be required in January. The variable overhead rate is $5.20 per direct labor hour. The company's budgeted fixed manufacturing overhead is $60,000 per month, which includes depreciation of $17,200. All other fixed manufacturing overhead costs represent current cash flows.

1- What is the budgeted manufacturing overhead cost for January?

2- What is the January cash disbursement for manufacturing overhead on the manufacturing overhead budget? Show your calculations

3- What is the predetermined manufactured overhead cost rate?

Answer 1

1)	Collection in April would be			=	(35% of April's Sales) + (45% of March's Sales) + (20% of February's Sales)
				=	(35% of $ 30000) + (45% of $ 40000) + (20% of $ 60000)
				=	$ 40,500.00

2)	Particulars			October	November	December
	Budgeted sales			30000	34000	36000
Add:	Desired ending F.G inventory			10200	10800
Less:	Beginning F.G inventory			9000	10200
	Production required				34600

3)	Particulars			April	May	June	July
	Budgeted sales			8200	8700	13100	13600
Add:	Desired ending F.G inventory			870	1310	1360
Less:	Beginning F.G inventory			820	870	1310
	Production required			8250	9140	13150
	R.M req. per unit			4	4	4
	Total R.M req. for production			33000	36560	52600
Add:	Desired ending R.M inventory			14624	21040
Less:	Beginning R.M inventory			13200	14624
	R.M purchase required				42976

4)
1)	Budgeted Manu. OH cost for January				=	(4400 x $ 5.2) + $ 60000
					=	$ 82,880.00
2)	Budgeted Cash disbursement for Manu. OH				=	$ 82880 - $ 17200
					=	$ 65,680.00
3)	Predetermined Manu. OH cost rate				=	(Fixed Manu. OH / Direct Labor Hours) + Variable OH rate
					=	($ 60000 / 4400 hrs) + $ 5.2
					=	$        18.84