Question

In: Accounting

As they get closer to the end of the current year, John and Chan begin to...

As they get closer to the end of the current year, John and Chan begin to think about next year. John is the head of the budget team and he has already gathered some of the information he needs to prepare the next year’s budget. His sales forecast remains 30,000 Men’s Razors and 10,000 Women’s Razors at a selling price of $45.00 and $55.00 for the whole year. John would consider changing the selling price of one or both of the products if he felt it would increase profits or market share.

The Men’s Razor is made out of 1 pound of raw materials at a cost of $5.00 per unit. The Women’s Razor uses 1.5 pounds of raw materials at a cost of $7.00 per unit. Raw Materials are purchased on credit and paid for fifty percent in the first quarter following the purchase and the remainder in the second quarter following the purchase. The last year’s Q3 and Q4 purchases of raw materials were $45,000 and $95,000 respectively. John wants an ending balance of raw materials equal to ten percent of the raw materials needed in the next quarter. The beginning balance of raw materials was 1,200 pounds split equally between the two products.

Unit sales for 2017 are forecasted to be:

Q1

Q2

Q3

Q4

Q1 Next Year

Men’s Razor-Units

5,000

5,000

5,000

15,000

5,200

Women’s Razor-Units

2,000

2,000

2,000

4,000

2,300

      Sales are forty percent cash and sixty percent credit. Credit sales are collected fifty percent in the quarter following the sale and forty-five percent in the second quarter following the sale. Five percent of credit sales are expected to go uncollected. Total sales for Q3 and Q4 of the previous year, which are expected to be partially collected during this year, were $300,000 and $850,000.

12. Prepare a Sales (Revenues) Budget and Cash Collection schedule for the year ended December 31, 2017.

13. Prepare a Raw Materials Purchases budget and Cash Payments schedule for the year ended December 31, 2017.

14. Prepare a Direct Labor budget for the year ended December 31, 2017. Recall from a previous part of the project that the Men’s Razor takes 1.5 DL hours to manufacture and the Women’s Razor takes 2.0 DL hours and that the subcontractors who assembly the razors get paid $10.00 per hour.

Solutions

Expert Solution


Related Solutions

If the salary is paid at the end of the year, how much will John get?...
If the salary is paid at the end of the year, how much will John get? 1. He can keep his current job at the management firm D&L. His annual salary at the firm is $65,000 per year and is salary is expected to increase at 3% per year until retirement. He is currently 28 years old and he expects to work for 40 more years. His current job includes a full paid health insurance plan and is current average...
In the current year, John gives $140,000 of land to John, Jr. In the current year,...
In the current year, John gives $140,000 of land to John, Jr. In the current year, John's wife gives $170,000 of land to Andy and $52,000 cash to John, Jr. Assume the couple elects gifts splitting for the current year and the current year is 2016. What are the couple's taxable gifts? How would your answer to Part a change if John's wife gave the $52,000 of cash to Larry (instead of to John, Jr.)
An investment of $100,000 will begin returning $11,600 annually at the end of the second year...
An investment of $100,000 will begin returning $11,600 annually at the end of the second year and it will continue at that rate for 10 years. If there is no cash inflow in the first year, what is its payback period? A. 10.6 years B. 9.9 years C. 9.6 years D. 9.2 years E. 8.9 years Simply Shoes, Inc. is evaluating an expansion that will cost $1 million and is expected to generate the following cash flows: year 1: –...
Why will the price level tend to rise as firms get closer to their productive capacity?...
Why will the price level tend to rise as firms get closer to their productive capacity? Would expansionary fiscal and monetary policy be beneficial on the vertical portion?
Q1 [The following information applies to the questions displayed below.] At year-end December 31, Chan Company...
Q1 [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $759,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $380 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the...
the average total cost curve and the average variable cost curve get A.closer and closer as...
the average total cost curve and the average variable cost curve get A.closer and closer as output​ increases, because the average total cost curve is declining. B.farther and farther apart as output​ increases, because the average variable cost curve is rising. C. closer and closer as output​ increases, because the average fixed cost curve is declining. D.farther and farther apart as output​ increases, because the average total cost curve is rising. E.closer and closer as output​ increases, because the average...
Do equipotential lines get closer together or further apart at a sharp corner of a cconductor?...
Do equipotential lines get closer together or further apart at a sharp corner of a cconductor? what about the electric field lines? What does this indicate about the electric field strength in this region?
Write a function sin_x_crossings(begin, end, skip) that uses sin math function which takes begin, end and...
Write a function sin_x_crossings(begin, end, skip) that uses sin math function which takes begin, end and skip as input parameters, and returns the x-points as a Python list that crosses the x-axis (i.e., x-value that just before it crosses). Hint: see axis-crossing lecture notes for hints. Note: you cannot use for or while loops. Note2: numpy has been imported as np For example: Test Result import math ans = sin_x_crossings(0, 4 * math.pi, 0.01) for val in ans: print(round(val, 2))...
At year-end December 31, Chan Company estimates its bad debts as 0.20% of its annual credit...
At year-end December 31, Chan Company estimates its bad debts as 0.20% of its annual credit sales of $603,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $302 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the transactions of December 31, February 1, and June 5. Record...
At year-end (December 31), Chan Company estimates its bad debts as 0.5% of its annual credit...
At year-end (December 31), Chan Company estimates its bad debts as 0.5% of its annual credit sales of $975,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $580 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries for these transactions. Record the estimated bad debts expense. Wrote off P. Park's...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT