Question

1. Larson, Inc., manufactures backpacks. Last year, it sold 96,000 of its basic model for $25 per unit. The company estimates that this volume represents a 30 percent share of the current market. The market is expected to increase by 20 percent next year. Marketing specialists have determined that as a result of new competition, the company’s market share will fall to 25 percent (of this larger market). Due to changes in prices, the new price for the backpacks will be $22 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates.

Required:

Estimate Larson’s sales revenues from this model of backpack for the coming year.

2.Flex-Tite manufactures plastic parts. The inventory policy at Flex-Tite is to hold inventory equal to 136% of the average monthly sales for its main product. Sales for the following year are expected to be 936,000 units. Based on the inventory policy, the budget calls for the production of 946,000 units.
Required:

What is the beginning inventory of the component? (Do not round intermediate calculations.)

3.Cascade, Ltd., a merchandising firm, is preparing its cash budget for March. The following information is available concerning its inventories:

Inventories at beginning of March	$	288,750
Estimated purchases for March		1,132,000
Estimated cost of goods sold for March		1,158,000
Estimated payments in March for purchases in February		283,000
Estimated payments in March for purchases prior to February		51,000
Estimated payments in March for purchases in March		70	%

Required:

What are the estimated cash disbursements in March?

Answer 1

for formulas and calculations, refer to the image below -

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