Answered: Alpha CD has budgeted its activity for…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 1E: The sales department of Macro Manufacturing Co. has forecast sales for its single product to be...

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Question

Alpha CD has budgeted its activity for December according to the following information:

1.   Sales at P400,000, all for cash.

2.   Budgeted depreciation for December is P10,000.

4.   The cash balance at December 1 was P10,000.

5.   Selling and administrative expenses are budgeted at P40,000 for December and are paid for in cash.

6.   The planned merchandise inventory on December 31 and December 1 is P12,000.

7.   The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash.

How much are the budgeted cash disbursements for December?

P230,000
P340,000
P350,000
P328,000

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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