Question

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,600 direct labor-hours will be required in January. The variable overhead rate is $7 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,100 per month, which includes depreciation of $3,660. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Multiple Choice

$61,300

$18,200

$57,640

$39,440

.

Harrti Corporation has budgeted for the following sales:

July	$	446,400
August	$	581,400
September	$	615,700
October	$	890,700
November	$	737,000
December	$	697,000

Sales are collected as follows: 20% in the month of sale; 55% in the month following the sale; and the remaining 25% in the second month following the sale. In Razz's budgeted balance sheet at December 31, at what amount will accounts receivable be shown?

Multiple Choice

$697,000

$184,250

$557,600

$741,850

Answer 1

2) Harrti Corporations Accounts receivables for Dec 31st are computed below

Till October, there will be no Accounts receivable,since by december 31st every amount related to October will be received.
Coming to the month of November, 25% of November sales will be receivable in next january = 737000*25% = $184250
Similarly for December,
55% of sales Revenue will be received in next January = 697000*55%= $383350
25% of sales Revenue will be received in next February = 697000*25%=$174250
therefore total receivables as on December 31st = ($184250+$383350+$174250)= $741850
Hence option D is right