New Ventures intends to start business on January 1. Production plans for the first four months...

New Ventures intends to start business on January 1. Production plans for the first four months of operations are as follows: January 20,000 units February 46,000 units March 84,000 units April 84,000 units Each unit requires 3 kilograms of material. The firm would like to end each month with enough raw material inventory on hand to cover 25% of the following month’s production needs. The material costs $6 per kilogram. Management anticipates being able to pay for 40% of the purchases in the month of purchase. The firm will receive a 10% discount for these early payments. Management anticipates having to defer payment to the next month on 60% of the firm’s purchases. No discount will be taken on these late payments. The business starts with no inventories on January 1.

Determine the budgeted payments for purchases of materials for each of the first three months of operations. (Round answers to the nearest whole dollar, e.g. 5,275.)

January February March

Solutions

Expert Solution

Solution to above problem of accounting (topic - budgets & budgetary control) is attached in 1 JPEG image. Please go through the solution step by step.

ekkarill92 answered 10 months ago

Next > < Previous

Related Solutions

Direct material purchases and budgeted payments Campbell Manufacturing intends to start business on January 1. Production...

Direct material purchases and budgeted payments Campbell Manufacturing intends to start business on January 1. Production plans for the first four months of operations are as follows: January 8,000 units February 20,000 units March 28,000 units April 28,000 units Each unit requires two pounds of material. The firm would like to end each month with enough raw material to cover 25 percent of the following month’s production needs. Raw material costs $7 per pound. Management pays for 40 percent of...

Natural Company purchased a new machine for production on January 1, 2014. The company intends to...

Natural Company purchased a new machine for production on January 1, 2014. The company intends to depreciate it over 5 years using double-declining balance method. The salvage value is $6,000. Purchase price $60,000 Sales tax $5,175 Insurance during shipping $2,600 Installation and testing $2,225 Extended service warranty $1,200 a) Calculate the cost of the new machine. b) Prepare the journal entry to record the machine purchase. c) Prepare the depreciation schedule for the five year period. d) Prepare the journal...

Natural Company purchased a new machine for production on January 1, 2014. The company intends to...

Natural Company purchased a new machine for production on January 1, 2014. The company intends to depreciate it over 5 years using double-declining balance method. The salvage value is $6,000. Purchase price $60,000 Sales tax $5,175 Insurance during shippiing $2,600 Installation and testing $2,225 Extended service warranty $1,200 a) Calculate the cost of the new machine. b) Prepare the journal entry to record the machine purchase. c) Prepare the depreciation schedule for the five year period.

1. With the information for the first four months of production, determine the variable cost per...

1. With the information for the first four months of production, determine the variable cost per unit and the fixed cost using the high-low method. Total Cost Units Produced January $155,100 9,000 February 166,350 9,750 March 158,100 9,200 April 157,350 9,150 2. For 20Y5, Moore’s Mowers had total sales of $42,000, with each product selling for $15 each. Each product had variable costs of $8. Calculate the (a) contribution margin, (b) contribution margin ratio, and (c) unit contribution margin. Round...

1. Carlos plans to start a new dry cleaning business. For that he purchased a space...

1. Carlos plans to start a new dry cleaning business. For that he purchased a space which costed him $100,000. For that he withdrew his savings worth $50,000 and borrowed the remaining $50,000 from a bank. His savings was earning him 3% interest per annum and the banks charges him 6% interest per annum. Based on this what would be Carlos opportunity cost of purchasing the space? a. $3,000 b. $1,500 c. $3,000 d. $4,500 2. Which of the following...

The controller of X Company estimates sales and production for the first four months of 2016...

The controller of X Company estimates sales and production for the first four months of 2016 as follows: January February March April Sales $30,200 $39,000 $55,000 $25,900 Production in units 1,010 1,670 2,140 2,510 Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct material to produce a finished unit, and...

Question 33 The controller of Harrington Company estimates sales and production for the first four months...

Question 33 The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows: January February March April Sales $29,300 $38,600 $54,400 $24,200 Production in units 1,100 1,600 2,000 2,700 Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct materials to produce a finished...

Sioux Corporation is estimating the following sales for the first four months of next year: January:...

Sioux Corporation is estimating the following sales for the first four months of next year: January: $260,000 Febraury: $230,000 March: $270,000 April: $320,000 Sales are normally collected 60% in the month of slae, 35% in the month following the sale, and the remaining 5% being uncollectible. Based on this information, how much cash should Sioux expect to collect during the month of April? A.) $286,500 B.) $320,000 C.) $192,000 D.) $94,500

Because friends and neighbors frequently praise her baking skills, Becky plans to start a new business...

Because friends and neighbors frequently praise her baking skills, Becky plans to start a new business baking cakes for customers. She wonders how to determine the cost of her cakes. Assume financial statement data are prepared in accordance with GAAP. 1. Identify the three components of product cost incurred in producing cakes and give examples of each. Also classify the costs as fixed, variable, or mixed. Explain any assumptions you use in determining your costs and classifying them. 2. Explain...

It is January 1st, 2014 and Oscar D’Souza has decided to start a new business. He...

It is January 1st, 2014 and Oscar D’Souza has decided to start a new business. He wants to forecast the first year’s Income Statement and Balance sheet. He believes the assumptions below are reasonable – and wants you to assist him by creating the forecasted statements. You agree. Please construct an Income Statement and Balance Sheet from the information provided below. (25 points) -First year sales will total $100,000 -Gross margins will be 50% -Operating margins will be 20% -Accounts...

Subjects