Problem 24-01A a-c (Part Level Submission) (Video)

Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.

Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $301,000 in quarter 1 and $425,500 in quarter 2.

Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.)

Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.)

Prepare the selling and administrative expense budget.

The Schofield Inc. uses a periodic inventory system. The company has a beginning inventory of 1,250 units at $15 each on January 1. Schofield purchases 1,500 units at $14 each in February and 700 units at $16 each in March. There were no additional purchases or sales during the remainder of the year.

Schofield sells 1,300 units during the quarter. If Schofield uses the LIFO method, what is its cost of goods sold?

Multiple Choice

• $19,400

• $20,800

• $19,600

• $650.

Shadee Corp. expects to sell 600 sun visors in May and 330 in June. Each visor sells for $19. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 65 units.

It expects the following unit sales for the third quarter:      

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 38 percent is collected during the following month, and 10 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Shadee Corp. expects to sell 560 sun visors in May and 320 in June. Each visor sells for $18. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.

It expects the following unit sales for the third quarter:

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 40 percent is collected during the following month, and 10 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Shadee Corp. expects to sell 630 sun visors in May and 380 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 80 and 45 units, respectively. Ending finished goods inventory for June will be 50 units.

It expects the following unit sales for the third quarter:      

Sixty percent of Shadee’s sales are cash. Of the credit sales, 52 percent is collected in the month of the sale, 36 percent is collected during the following month, and 12 percent is never collected.

Required:

Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Shadee Corp. expects to sell 600 sun visors in May and 380 in June. Each visor sells for $11. Shadee’s beginning and ending finished goods inventories for May are 90 and 55 units, respectively. Ending finished goods inventory for June will be 65 units.

It expects the following unit sales for the third quarter:      

Sixty percent of Shadee’s sales are cash. Of the credit sales, 50 percent is collected in the month of the sale, 38 percent is collected during the following month, and 12 percent is never collected.

Required:

Calculate each of Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

Shadee Corp. expects to sell 630 sun visors in May and 370 in June. Each visor sells for $14. Shadee’s beginning and ending finished goods inventories for May are 80 and 40 units, respectively. Ending finished goods inventory for June will be 55 units. It expects the following unit sales for the third quarter: July 530 August 460 September 440 Sixty percent of Shadee’s sales are cash. Of the credit sales, 54 percent is collected in the month of the sale, 37 percent is collected during the following month, and 9 percent is never collected. Required: Calculate Shadee’s total cash receipts for August and September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

The gross margin is 25% of sales.

Actual and budgeted sales data:

Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.

Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.

One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.

Monthly expenses are as follows: commissions, 12% of sales; rent, $4,200 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $747 per month (includes depreciation on new assets).

Equipment costing $3,400 will be purchased for cash in April.

Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the preceding data:

1. Complete the following schedule: Schedule of Expected Cash Collection. April, May, June, Quarter

2. Complete the following: Merchandise Purchases Budget. April, May, June, Quarter

3. Complete the following cash budget:

4. Prepare an absorption costing income statement for the quarter ended June 30.

5. Prepare a balance sheet as of June 30.