Question

In: Accounting

Kohlman Company began its operations on March 31 of the current year. Projected manufacturing costs for...

Kohlman Company began its operations on March 31 of the current year. Projected manufacturing costs for the first three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation, insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs. Insurance was paid on March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are expected to be paid in the month in which they are incurred with the balance to be paid in the following month.
The cash payments for manufacturing in the month of April are:
a.$128,000.
b.$117,600.
c.$156,800.
d.$96,000.

Solutions

Expert Solution

The cash payments for manufacturing cost in the month of April are is as follows:

April ($)
3/4 of remaining manufacturing costs are expected to be paid in the month in which they are incurred ($156,800 - $28,800)* 3/4 $96,000
1/4 manufacturing costs are expected to be paid in following Month $0
Total cash payments for manufacturing cost $96,000

Note: The business operation is started in Mach 31, so there is no manufactured cost is given in the March and therefore, there is no (1/4) manufacturing cost is calculated which is payable in following month that is in April.

So correct answer is option (d) or $96,000

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:   April May June Manufacturing costs (1) $158,000 $190,000 $218,000 Insurance expense (2) 1,040 1,040 1,040 Depreciation expense 1,870 1,870 1,870 Property tax expense (3) 570 570 570 (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred and one-fourth is paid for in the following month.(2) Insurance expense is $1,040 a month; however, the insurance is...
Finch Company began its operations on March 31 of the current year.  Finch has the following projected...
Finch Company began its operations on March 31 of the current year.  Finch has the following projected costs: April May June Manufacturing costs (1) $156,800 $195,200 $217,600 Insurance expense (2) 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense (3) 500 500 500 ​ (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. (2) Insurance expense is $1,000 a month; however, the insurance is paid four...
Finch Company began its operations on March 31 of the current year. Finch has the following...
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $155,900 $198,700 $206,800 Insurance expense** 990 990 990 Depreciation expense 2,110 2,110 2,110 Property tax expense*** 600 600 600 *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $990 a month; however, the insurance is paid four times yearly in the first...
Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units...
Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production cost were $14 per unit, variable selling expenses were $2 per unit, fixed overhead totaled $12,000, and fixed selling and administrative expenses totaled $30,000. Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units during...
As of the end of the first year of operations, the projected total current assets is?
A family friend, Mr. Burn Out availed of the early retirement scheme offered by his employer. He said that he was already tired of the same routine of spending eight full hours in an office doing the same thing for the last twenty years. Mr. Burn Out plans to get into the field of entrepreneurship. He would invest part of his retirement pay in a business that would deal with the sale of medical supplies to local clinics and hospitals....
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. ​ The cash collections expected in October are a. $320,000 b. $304,250 c....
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business—September, October, and November—are $237,000, $304,000, and $414,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in September from accounts receivable are estimated to be
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business—September, October, and November—are $260,000, $375,000, and $400,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in November from accounts receivable are projected to be a.$276,500 b.$280,000 c.$316,400...
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $243,000, $307,000, and $429,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in October from accounts receivable are estimated to be a.$247,128...
The ledger of Oriole Company on March 31 of the current year includes the selected accounts...
The ledger of Oriole Company on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared. Debit Credit Supplies $6,900 Prepaid Insurance 8,280 Equipment 57,500 Accumulated Depreciation—Equipment $19,320 Notes Payable 46,000 Unearned Rent Revenue 28,520 Rent Revenue 138,000 Interest Expense 0 Salaries and Wages Expense 32,200 An analysis of the accounts shows the following. 1. The equipment depreciates $644 per month. 2. Half of the unearned rent revenue was earned during the quarter....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT