JK has prepared a budget for the next 12 months when it intends to make and sell four products, details of which are shown below: Product Sales in units (thousands) Selling price per unit Variable cost per unit 10 К20 K14.00 K 10 К40 K8.00 L 50 K4 K4.20 M 20 K10 K7.00 Budgeted fixed costs are K240 000 per annum and total assets employed are K570000. Required: a). produce a profit-volume graph of the above data noting the important or significant figures and points on the graph b). comment on useful management points which can be read from the graph.
Q: The production department of Hareston Company has submitted the following forecast of units to be…
A: Budgeting is an important part of the business process. Without budgeting a business cannot track…
Q: The director of Sonic Ltd has been asked to produce a budgeted income statement for the six months…
A: The net profit: The net profit is computed as the profit after paying all operating expenses…
Q: The budgeted income for PCY Ltd. for next year is: Sales – 100,000 units @ $20…
A: To calculate the sale price per unit for the special order , relevant cost plus desired profit must…
Q: Delta Company has required you to prepare a cash budget on the basis of following information: i.…
A: Cash Budget: Cash Flow of business over a specific period of time is estimated by cash Budget .…
Q: NUBD bases its manufacturing overhead budget on machine hours. Estimated machine hours are 10,000…
A: Cash Budget is Prepared so that there is no shortages of cash when it comes at the time of…
Q: TJH bases its manufacturing overhead budget on machine hours. Estimated machine hours are 10,000 for…
A: Formula: Variable manufacturing overhead = Estimated machine hours x Per machine hour
Q: The marketing department of Jessi Corporation has submitted the following sales forecast for the…
A: Working: Schedule of cash collections 1 2 3 4 Total Accounts Receivable,…
Q: Fairfield Company management has budgeted the following amounts for its next fiscal year: Selling…
A: Contribution margin per unit = Sales - variable costs = $40 - $25 = $15 per unit
Q: Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter…
A: The selling and administrative expense budget is prepared to record the expenses to be incurred to…
Q: A Company manufactures and sells one product which requires 8 kg of raw material in its manufacture.…
A: We have the following information: Company manufactures and sells one product which requires 8 kg…
Q: The marketing department of Jessi Corporation has submitted the following sales forecast for the…
A: 1. Expected Cash Collections - Expected cash collection is the amount received from the customer in…
Q: XYZ company is preparing its cash budget for the first quarter of. the year. It has $10,000 in cash…
A: Budgeted total cash payment = Inventory purchase + other operating expenses - depreciation = $25,000…
Q: Golden Corporation is preparing its cash budget for the next year. Sales are expected to be at…
A: The budget is prepared to estimate the requirements for the future period. The cash budget is…
Q: A farm is preparing its cash budget for the next year. Sales are expected to be P100,000 in January,…
A: Here in this question, we are required to calculate budgeted collection for April. Budget is an…
Q: Golden Corporation is preparing its cash budget for the next year. Sales are expected to be at…
A: January February March April Budgeted sales P100,000 200000 300000 100000 Cash sales (50%)…
Q: 7. Toews Ltd has prepared the following flexible budget for the coming year. The Budgeted level of…
A: The variable cost changes with level of production but fixed cost remains constant at every level of…
Q: NUBD bases its manufacturing overhead budget on machine hours. Estimated machine hours are 10,000…
A: Solution: Manufacturing overhead cost affect the cash budget = Amount of cash manufacturing…
Q: XYZ company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash…
A: Answer: with formula:
Q: Rawlings Company prepared the following budget information for the coming year: Product A Product B…
A: Budgeting: A budget is a spending plan in light of pay and costs. Budgeting is the method involved…
Q: Farooq Company has accumulated the following budget data for the year 2020. Sales: 60,000 units,…
A: A budgeted income statement is the income statement that is prepared with the data forecasted for…
Q: Fairfield Company management has budgeted the following amounts for its next fiscal year: Selling…
A: Break-even analysis is used to identify the break-even point. It is that point at which the fixed…
Q: The following information relates to DGB Corporation: All sales are on account and are budgeted as…
A:
Q: The marketing department of Jessi Corporation has submitted the following sales forecast for the…
A: 1. Jessi Corporation Company's Total Sales Particulars Ist Quarter 2nd quarter 3rd quarter…
Q: budgeted direct materials purchases
A: Opening direct material for Quarter 2 = (Units to be produced in Quarter 2 * 3 pounds per unit *…
Q: LOL CORP. collects 20% of a month's sales in the month of sale, 70% in the month following sale, and…
A: In many cases, companies sell its goods on credit. In such cases, realization of cash from its…
Q: Britten plc is preparing its production budget for product A for the forthcoming year. Budgeted…
A: Budgeted number of units to be produced = Budgets sales+ ending inventory- opening inventory
Q: Orange Company prepared the following budget information for the coming year: Product A Product B…
A: Break-Even Point:-It is calculated by dividing fixed cost by the contribution per unit. It is a unit…
Q: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted…
A: Credit sales refers to the purchases made by the customers who does not make the full cash payment…
Q: Shep Company combines its operating expenses for budget purposes in a selling and administrative…
A: Selling Commission = 20,000 units X $ 30 per unit X 6% Selling Commission = $ 36,000 Delivery…
Q: Canyon Corporation's budgeted production schedule, by quarters, for the coming year is as follows:…
A: Direct material purchases (in pounds) = Total direct material required for quarter + Ending…
Q: A Company manufactures and sells one product which requires 8 kg of raw material in its manufacture.…
A: We have the following information: A Company manufactures and sells one product which requires 8 kg…
Q: The marketing department of Jessi Corporation has submitted the following sales forecast for the…
A: Total sales = Units sold*Sales price per unit
Q: Sohar Company. estimates its sales at 180,000 units in the first quarter and that sales will…
A: Production units means how many units needs to be produce to fulfill sales demand and ending…
Q: Florida Co. manufactures a single product and keeps its inventory of finsihed goods at 75% of the…
A: Inventory: It refers to the assets of an entity for the final purpose of reselling, producing, or…
Q: The total budgeted sales of Nana Kay Ltd for October, the first month of the last quarter in 2019…
A: Cash collections simply means the amount of money collected by an entity during a period of time.…
Q: XYZ company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash…
A: The cash budget is prepared to project the cash inflows and cash outflows for a particular period.
Q: Electro Company budgets production of 450,000 transmissions in the second quarter and 520,000…
A: Direct Materials Budget: The direct materials usage budget is prepared to estimate the number of…
Q: Brodrick Company expects to produce 21,700 units for the year ending December 31. A flexible budget…
A: At flexible budget, Selling price per unit = $542,500 / 21,700 units = $25 per unit So Total sales =…
Q: The total budgeted sales of Obaapa Ltd for April, the first month of the second quarter in 2021 were…
A: Accounts receivable represents the revenue that has been earned but the payment has not been…
Q: GHI Company manufactures two products that sell to the same market. Its budget and operating results…
A: Contribution margin variance refers to the variance which is computed by figuring the difference…
Q: M/s. MNO produces cookies. The company is currently in the process of establishing a master budget…
A: M/s. MNO produces cookies. The company is currently in the process of establishing a master budget…
Q: Shamrock Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting…
A: Budget is an important tool in every organization. It is an estimation of the sales, production,…
Q: A. Parkson Limited has produced an overhead budget for next year based on two levels of activity,…
A: Parkson Limited has budgeted overhead for next year based on two levels i.e., 5000 units and 8000…
Q: Canucks plc has prepared the following flexible budget for the coming year. The Budgeted level of…
A: Budgeted Cost: In business, a budgeted cost is an estimate of the expenditures that a firm…
Q: Magika Enterprises has prepared the following budget for the month of November: Selling Price…
A: Solution: Computation of Overall CM ratio Product A Product B Product C Total Selling price…
Q: Lea Company's sales budget shows the following projections for the year ending Dec. 31, 2021: First…
A: Lea Company's Production Budget For the Year Ended December 31, 2021…
Q: A company that manufactures a single product has provided the following budgeted standard cost and…
A: The Numerical has covered the Concept of Break-Even Point in the Break-even analysis. The Break-even…
Q: The TESS Company has budgeted sales for the year as follows: Quarter 1 10,000 Quarter 2 12,000…
A: Budgeting means where standard is set for various activities and department , then actual is…
Q: A company has budgeted to use 2,400 units of component BEN10 in its production department during the…
A: Economic Order Quantity: It is the order quantity which reduces total holding costs and carrying…
Help how to go about it
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000Use the following information for Exercises 9-50 and 9-51: Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for 475, and the S12L5 sells for 300. Projected sales (number of speakers) for the coming 5 quarters are as follows: The vice president of sales believes that the projected sales are realistic and can be achieved by the company. Exercise 9-50 Sales Budget Refer to the information regarding Stillwater Designs above. Required: 1. Prepare a sales budget for each quarter of 20X1 and for the year in total. Show sales by product and in total for each time period. 2. CONCEPTUAL CONNECTION How will Stillwater Designs use this sales budget?Barnstormer sells airplane accessories for $20 each. It expects sales of 120,000 units in quarter 1 and a 7% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year.
- Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?Navigator sells GPS trackers for $50 each. It expects sales of 5,000 units in quarter 1 and a 5% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year.Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
- Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead. 2. Prepare a cost of goods sold budget for Play-Disc for the year. 3. What if the beginning inventory of finished goods was 75,200 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.OPTIMAL CAPTTAL BUDGET Marble Construction estimates that its WACC is 10% if equity comes from retained earnings. However, if the company issues new stock to raise new equity, it estimates that its WACC will rise to 10.8%. The company believes that it will exhaust its retained earnings at 2,500,000 of capital due to the number of highly profitable projects available to the firm and its limited earnings. The company is considering the following seven investment projects: Project Size IRR A 650,000 14.0% B 1,050,000 13.5 C 1,000,000 11.2 D 1,200,000 11.0 E 500,000 10.7 F 650,000 10.3 G 700,000 10.2 Assume that each of these projects is independent and that each is just as risky as the firm's existing assets. Which set of projects should be accepted, and what is the firm's optimal capital budget?Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
- Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.