Badlands, Inc. manufactures a household fan that sells for $25 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from the company's accounting records. • Badlands maintains a minimum cash balance of $18,000. Total payments in January 20x1 are budgeted at $215,000. • A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: Cash Receipts January From December 31 accounts receivable $ From January sales From February sales February 111,000 93,000 $ 148,000 74,400 • March 20x1 sales are expected to total 8,500 units. • Finished-goods inventories are maintained at 20 percent of the following month's sales. • The December 31, 20x0, balance sheet revealed the following selected figures: cash, $24,200; accounts receivable, $111,000; and finished goods, $24,900. Required: 1. Calculate the number of units of finished goods to be manufactured in January 20x1. 2. Calculate the financing required in January, if any, to maintain the firm's minimum cash balance.
Badlands, Inc. manufactures a household fan that sells for $25 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from the company's accounting records. • Badlands maintains a minimum cash balance of $18,000. Total payments in January 20x1 are budgeted at $215,000. • A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: Cash Receipts January From December 31 accounts receivable $ From January sales From February sales February 111,000 93,000 $ 148,000 74,400 • March 20x1 sales are expected to total 8,500 units. • Finished-goods inventories are maintained at 20 percent of the following month's sales. • The December 31, 20x0, balance sheet revealed the following selected figures: cash, $24,200; accounts receivable, $111,000; and finished goods, $24,900. Required: 1. Calculate the number of units of finished goods to be manufactured in January 20x1. 2. Calculate the financing required in January, if any, to maintain the firm's minimum cash balance.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Badlands, Inc. manufactures a household fan that sells for $25 per unit. All sales are on account, with 40 percent of sales
collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from
the company's accounting records.
• Badlands maintains a minimum cash balance of $18,000. Total payments in January 20x1 are budgeted at $215,000.
• A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period:
Cash Receipts
January
From December 31 accounts receivable $
From January sales
From February sales
February
111,000
93,000
$ 148,000
74,400
• March 20x1 sales are expected to total 8,500 units.
• Finished-goods inventories are maintained at 20 percent of the following month's sales.
• The December 31, 20x0, balance sheet revealed the following selected figures: cash, $24,200; accounts receivable,
$111,000; and finished goods, $24,900.
Required:
1. Calculate the number of units of finished goods to be manufactured in January 20x1.
2. Calculate the financing required in January, if any, to maintain the firm's minimum cash balance.
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