In: Accounting
The Bag Corporation is a distributor of high end golf bags. In the past, The Bag Corporation produced and sold the golf bags. Over time, they realized it was cheaper to buy the golf bags fully assembled and resell them to the public, therefore eliminating their need for a manufacturing plant. The Bag Corporation pays $60 per golf bag and sells them for $180.
Prepare a 2021 (January – December) Revenue Budget (for units and sales dollars) for The Bag Corporation. They anticipate selling 6,000 golf bags in January 2021 and increasing that number by 1% each month.
Prepare a 2021 Purchases Budget (for units and cost) for The Bag Corporation. They plan to have 5,000 golf bags on hand at December 31, 2020. The Bag Corporation purchases golf bags once a month and bases their purchase on 95% of the next months projected sales. (In December 2020, The Bag Corporation plans to sell 5,500 golf bags and will purchase 5,700 golf bags [January 2021 projected sales of 6,000 golf bags x 95%]. In January 2021, The Bag Corporation plans to sell 6,000 golf bags and will purchase 5,757 golf bags [February 2021 projected sales of 6,060 golf bags x 95%]).
Prepare a 2021 Cash Collections Budget for The Bag Corporation. 70% of The Bag Corporation sales are cash sales and 30% are credit sales. The credit sales are collected the following month.
Prepare a 2021 Operating Expenses Budget for The Bag Corporation. Administrative Expenses are $300,000 per month and are fixed. Marketing Expenses are 4% of the current month’s sales. Storage/Distribution Expenses are $6 per golf bag sold in each month.
Prepare a 2021 Cash Disbursements Budget for The Bag Corporation. The Bag Corporation pays for the golf bags on credit but must make full payment within 30 days. All Administrative, Marketing and Storage/Distribution expenses are paid in the current month.
Prepare a Budgeted Income Statement for the year ended December 31, 2021.
1.
Revenue budget | ||||||||||||
January | February | March | April | May | June | July | August | September | October | November | December | |
Sales in units | 6,000 | 6,060 | 6,121 | 6,182 | 6,244 | 6,306 | 6,369 | 6,433 | 6,497 | 6,562 | 6,628 | 6,694 |
Selling Price per unit | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 | $ 180.00 |
Sales Revenue | $ 10,80,000.00 | $ 10,90,800.00 | $ 11,01,708.00 | $ 11,12,725.08 | $ 11,23,852.33 | $ 11,35,090.85 | $ 11,46,441.76 | $ 11,57,906.18 | $ 11,69,485.24 | $ 11,81,180.09 | $ 11,92,991.90 | $ 12,04,921.81 |
2.
Purchase Budget | ||||||||||||
January | February | March | April | May | June | July | August | September | October | November | December | |
Sales in units | 6,000 | 6,060 | 6,121 | 6,182 | 6,244 | 6,306 | 6,369 | 6,433 | 6,497 | 6,562 | 6,628 | 6,694 |
Purchases (95% of next month sales) |
5,757 | 5,815 | 5,873 | 5,931 | 5,991 | 6,051 | 6,111 | 6,172 | 6,234 | 6,296 | 6,359 | 6,423 |
Cost per unit | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 | $ 60.00 |
Total Purchase cost | $ 3,45,420.00 | $ 3,48,874.20 | $ 3,52,362.94 | $ 3,55,886.57 | $ 3,59,445.44 | $ 3,63,039.89 | $ 3,66,670.29 | $ 3,70,336.99 | $ 3,74,040.36 | $ 3,77,780.77 | $ 3,81,558.57 | $ 3,85,374.16 |
3.
Cash Collection Budget | ||||||||||||
January | February | March | April | May | June | July | August | September | October | November | December | |
Sales Revenue | 1080000 | 1090800 | 1101708 | 1112725.08 | 1123852.331 | 1135090.854 | 1146441.763 | 1157906.18 | 1169485.242 | 1181180.094 | 1192991.895 | 1204921.814 |
Cash Sales 70 % (A) | 7,56,000 | 7,63,560 | 7,71,196 | 7,78,908 | 7,86,697 | 7,94,564 | 8,02,509 | 8,10,534 | 8,18,640 | 8,26,826 | 8,35,094 | 8,43,445 |
Credit Sales (30%) | $ 3,24,000.00 | $ 3,27,240.00 | $ 3,30,512.40 | $ 3,33,817.52 | $ 3,37,155.70 | $ 3,40,527.26 | $ 3,43,932.53 | $ 3,47,371.85 | $ 3,50,845.57 | $ 3,54,354.03 | $ 3,57,897.57 | $ 3,61,476.54 |
Credit sales collected in next month (B) | $ 3,24,000.00 | $ 3,27,240.00 | $ 3,30,512.40 | $ 3,33,817.52 | $ 3,37,155.70 | $ 3,40,527.26 | $ 3,43,932.53 | $ 3,47,371.85 | $ 3,50,845.57 | $ 3,54,354.03 | $ 3,57,897.57 | |
Total Cash Collection (A + B) | $ 7,56,000.00 | $ 10,87,560.00 | $ 10,98,435.60 | $ 11,09,419.96 | $ 11,20,514.16 | $ 11,31,719.30 | $ 11,43,036.49 | $ 11,54,466.85 | $ 11,66,011.52 | $ 11,77,671.64 | $ 11,89,448.36 | $ 12,01,342.84 |
Since Account receivable at beginning of the year are not provided hence not taken in account.
4.
Operting Expense Budget | ||||||||||||
January | February | March | April | May | June | July | August | September | October | November | December | |
Administrative Expense | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 | $ 3,00,000.00 |
Marketing Expense (4% of sales ) | $ 43,200.00 | $ 43,632.00 | $ 44,068.32 |
Related SolutionsPar, Inc., produces a standard golf bag and a deluxe golf bag on a weekly basis....Par, Inc., produces a standard golf bag and a deluxe golf bag on
a weekly basis. Each golf bag requires time for cutting and dyeing
and time for sewing and finishing, as shown in the following
table:
Hours Required per Bag
Product
Cutting and Dyeing
Sewing and Finishing
Standard Bag
1/22
11
Deluxe Bag
11
2/33
The profits per bag and weekly hours available for cutting and
dyeing and for sewing and finishing are as follows:
Product
Profit per Unit...
EZ Carry Corp. is the maker of high quality golf bags. The company currently has three...EZ Carry Corp. is the maker of high quality golf bags. The
company currently has three different lines of bags, which it sells
to sporting goods stores and golf shops throughout the world. EZ
Carry sells a constant mix of 4 small bags for each medium-sized
bag and 5 medium bags for each large-sized bag. Total fixed costs
for the year are expected to be $2,027,562. (Note: round all
decimals to three places; round final answers up to nearest whole...
XYZ is the maker of high quality golf bags. The company currently has three different lines...
XYZ is the maker of high quality golf bags. The
company currently has three different lines of bags, which it sells
to sporting goods stores and golf shops throughout the world.
XYZ sells a constant mix of 1 medium-sized bags for
2 small bag and 4 medium bags for 3 large-sized bag.
Total fixed costs for the year are expected to
be
2027562
Note: round all decimals to three places in the
computation
Small
Medium
Large
Selling price per bag...
Let PSand PDrepresent the prices charged for each standard golf bag and deluxe golf bag respectively....Let PSand PDrepresent the prices charged
for each standard golf bag and deluxe golf bag respectively. Assume
that “S” and “D” are demands for standard and deluxe bags
respectively.
S = 2250 –
15PS (8.1)
D = 1500 –
5PD (8.2)
Revenue generated from the sale of S number of standard bags is
PS*S. Cost per unit production is $70 and the cost for
producing S number of standard bags is 70*S.
So the profit for producing and selling S number of...
Paper bags are produced in a perfectly competitive market. Bemidji Bag Company produces paper bags in...Paper bags are
produced in a perfectly competitive market. Bemidji Bag Company
produces paper bags in this market. The equilibrium price in the
paper bag market is $400 per pallet.
(4 points) Briefly explain why Bemidji Bag will want to price
at $400 per pallet and will be able to sell all the bags
it wants to produce at this price. What is the price elasticity of
demand for Bemidji Bag’s demand and how does this differ from the
price...
Par Inc. is a small manufacturer of golf equipment. It produces two types of golf bags:...Par Inc. is a small manufacturer of golf equipment. It produces
two types of golf bags: Standard and Deluxe. Each bag type requires
the following operations (and production times) to produce one
unit:
Production Time (hours)
Time Available
Operation
Standard
Deluxe
(hours/month)
Cutting and Dyeing
0.7
1
630
Sewing
0.5
5/6
600
Finishing
1
2/3
708
Inspection
0.1
0.25
135
Time available refers to the production capacity for each of the
above operations. For example, 630 total hours a month...
A soil distributor sells fertilizer in 10 kg bags. A customer feels that the distributor sells...A soil distributor sells fertilizer in 10 kg bags. A customer
feels that the distributor sells underweight bags. To support his
hunch, he purchases 8 bags of soil. They have an average weight of
9.75 kg with standard deviation 0.7 kg. Does the customer have a
case against the distributor? Test using α = 0.05.
Suppose a small company is in the business of making golf bags to be sold at...
Suppose a small company is in the business of making golf bags
to be sold at a local golf course where state championships are
often held. They make 2 types of golf bags, a standard bag and a
deluxe bag. The table below gives the information for limitations
of materials and labor hours, and also for the profit for each type
of bag. The materials and labor hours are the amount available per
week, and the profit is the profit...
Suppose a small company is in the business of making golf bags to be sold at...
Suppose a small company is in the business of making golf bags
to be sold at a local golf course where state championships are
often held. They make 2 types of golf bags, a standard bag and a
deluxe bag. The table below gives the information for limitations
of materials and labor hours, and also for the profit for each type
of bag. The materials and labor hours are the amount available per
week, and the profit is the profit...
There are two bags of coins. In the first bag there are 3 gold, 2 silver...There are two bags of coins. In the first bag there are 3 gold,
2 silver coins. In the second bag there are 1 gold, 4 silver coins.
2 coins are randomly picked from the first bag, and then dropped
into the second bag. Then a coin is randomly selected from the
second bag. If this coin is a gold coin, what is the probability
that both coins picked from the first bag were gold?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|