1. ABM Company forecasts sales in units for January to May as follows:January 2,500, February 2,700, March 3,500, April 3,700 and May 3,5002. ABM Company would like to maintain 100 units in its ending inventory at the end of each month.3. Beginning inventory at the start of January is S0 units.4. How many units should ABM Company produce in order to fulfill the expected sales of the company?MONTHJANFEBMARCHAPRILMAYTOTALProjected SalesTarget level of endingInventoriesTotalLess: beginning inventoriesRequired production5. assume selling price is PHP200/unit.6, Sales for each month are expected to be collected as follows:• Month of sales : 20% A month after sales: 50% - 2 months after sales: 30%6Note • On January Abm Company collected from previous month sales amounted to P100,000MONTHJANFEBMARCHAPRILMAYTOTALUnitsSales in PesosCollection from current months salesCollection from previous months salesCollection from two months priorsalesTotal Collections from Sales7. Cost of sales is 50% of sales8. Operating expenses is 7% of sales9. Rent payments: Rent of PHP5,000 will be paid each month.10. Fixed salaries for the year are PHP96,000, or PHP8,000 per month.11.Taxes of PHP25,000 must be paid in April.MONTHJANFEBMARCHAPRILMAYTOTALCost of SalesCash Operating ExpenseRent ExpensesSalaries ExpensesTaxes ExpenseCash Disbursement12. Prepare Cash budget at the back, the beginning cash balance on January is P30,000 and their expected cash balanceraised to P 100,000 per month.13. Based from the Cash budget information evaluate if ABM COMPANY need to borrow money from short termfinancing or need to invest their cash to short term investment.

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1. ABM Company forecasts sales in units for January to May as follows: January 2,500, February 2,700, March 3,500, April 3,700 and May 3,500 2. ABM Company would like to maintain 100 units in its ending inventory at the end of each month. 3. Beginning inventory at the start of January is 50 units. 4. How many units should ABM Company produce in order to fulfill the expected sales of the company? MONTH APRIL JAN FEB MARCH MAY TOTAL Projected Sales Target level of ending inventories Total Less: beginning inventories Required production 5. assume selling price is PHP200/unit. 6. Sales for each month are expected to be collected as follows: Month of sales: 20% A month after sales: 50%- 2 months after sales: 30% Note · On January Abm Company collected from previous month sales amounted to P100,000 MONTH JAN FEB MARCH APRIL MAY TOTAL

1. ABM Company forecasts sales in units for January to May as follows: January 2,500, February 2,700, March 3,500, April 3,700 and May 3,500 2. ABM Company would like to maintain 100 units in its ending inventory at the end of each month. 3. Beginning inventory at the start of January is 50 units. 4. How many units should ABM Company produce in order to fulfill the expected sales of the company? MONTH APRIL JAN FEB MARCH MAY TOTAL Projected Sales Target level of ending inventories Total Less: beginning inventories Required production 5. assume selling price is PHP200/unit. 6. Sales for each month are expected to be collected as follows: Month of sales: 20% A month after sales: 50%- 2 months after sales: 30% Note · On January Abm Company collected from previous month sales amounted to P100,000 MONTH JAN FEB MARCH APRIL MAY TOTAL

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercises 2.2 and 2.3. Next year, Pietro expects to produce 50,000 units and...

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