ABC Inc has the following estimates for the next four months: March April May June Sales units 94 84 96 80 Production units 90 75 90 70 Raw material purchases in units 80 80 85 85 Wages 2550 2875 3850 3850 Variable overheads 1020 1150 1540 1540 Fixed overheads 3200 3200 3200 3200 Estimated sales price Esitmated raw material price per unit 219 € 45 € Wages and overheads are paid the month they are incurred All sales and raw material purchases are on credit: Debtors are allowed 2 months credit Raw materials are purchased on 1 month credit Cash from a loan of 130 000 is due to be received on 1 May Machinery costing An interest payment A dividend of 122 000 will be received in May and paid for in June 9 000 wil be paid in June 12 000 € will be paid in June Depreciation for the four months, including that of the new machinery is: 1 200 € per month (new machine does't yet affect thi Balance sheet information: Beginning cash balance is: 6 750 Beginning accounts receivable, excluding bad debts 18 080 (50% are from last months sales) Beginning accounts payable due to raw material purchases are: Old bad debts in A/R, to be written off in June 3 900 € 3 000 Required: A) Construct the sales budget (in €) for the four months B) Construct a raw material purchases budget C) Construct a cash budget for the four months
ABC Inc has the following estimates for the next four months: March April May June Sales units 94 84 96 80 Production units 90 75 90 70 Raw material purchases in units 80 80 85 85 Wages 2550 2875 3850 3850 Variable overheads 1020 1150 1540 1540 Fixed overheads 3200 3200 3200 3200 Estimated sales price Esitmated raw material price per unit 219 € 45 € Wages and overheads are paid the month they are incurred All sales and raw material purchases are on credit: Debtors are allowed 2 months credit Raw materials are purchased on 1 month credit Cash from a loan of 130 000 is due to be received on 1 May Machinery costing An interest payment A dividend of 122 000 will be received in May and paid for in June 9 000 wil be paid in June 12 000 € will be paid in June Depreciation for the four months, including that of the new machinery is: 1 200 € per month (new machine does't yet affect thi Balance sheet information: Beginning cash balance is: 6 750 Beginning accounts receivable, excluding bad debts 18 080 (50% are from last months sales) Beginning accounts payable due to raw material purchases are: Old bad debts in A/R, to be written off in June 3 900 € 3 000 Required: A) Construct the sales budget (in €) for the four months B) Construct a raw material purchases budget C) Construct a cash budget for the four months
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 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...
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Transcribed Image Text:ABC Inc has the following estimates for the next four months:
March
April
May
June
Sales units
94
84
96
80
Production units
90
75
90
70
Raw material purchases in units
80
80
85
85
Wages
2550
2875
3850
3850
Variable overheads
1020
1150
1540
1540
Fixed overheads
3200
3200
3200
3200
Estimated sales price
219 €
Esitmated raw material price per unit
45 €
Wages and overheads are paid the month they are incurred
All sales and raw material purchases are on credit:
Debtors are allowed
2 months credit
Raw materials are purchased on
1 month credit
Cash from a loan of
130 000 is due to be received on 1 May
Machinery costing
122 000 will be received in May and paid for in June
An interest payment
9 000 wil be paid in June
A dividend of
12 000 € will be paid in June
Depreciation for the four months, including that of the new machinery is:
1 200 € per month (new machine does't yet affect this)
Balance sheet information:
Beginning cash balance is:
6 750
Beginning accounts receivable, excluding bad debts
18 080 (50% are from last months sales)
Beginning accounts payable due to raw material purchases are:
Old bad debts in A/R, to be written off in June
3 900 €
3 000
Required:
A) Construct the sales budget (in €) for the four months
B) Construct a raw material purchases budget
C) Construct a cash budget for the four months
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