Osaka Manufactures has the following budgeted cash stream for four quarters of an upcoming year i.e. 2021. The Beginning cash balance is $ 42,500 Management plans to spend $130,000 during the year on equipment purchases $50,000 in the first quarter, $40,000 in the second quarter, $20,000 in the third quarter and $20,000 in the fourth quarter Board of directors has approved cash dividends of $8,000 per quarter Collection from the customers are $ 230,000, $ 480,000, $740,000 & $520,000 respectively in four quarters Direct Material Payments are $49,500, $72,300, $100,050 and $79,350 respectively over the four quarters Direct labor Payouts are $84,000, $192,000, $216,000 and $114,000 respectively over the four quarters MOH payment are $68,000, $96,800, $103,200 and $76,000 respectively Selling and admin expenses are $107,000, $143,000, $ 161,000 and $125,000 You are required to highlight excess/deficiency of cash available over disbursement for each of four quarters and suitable action required to be taken on company’s senior management part.
Osaka Manufactures has the following budgeted cash stream for four quarters of an upcoming year i.e. 2021. The Beginning cash balance is $ 42,500 Management plans to spend $130,000 during the year on equipment purchases $50,000 in the first quarter, $40,000 in the second quarter, $20,000 in the third quarter and $20,000 in the fourth quarter Board of directors has approved cash dividends of $8,000 per quarter Collection from the customers are $ 230,000, $ 480,000, $740,000 & $520,000 respectively in four quarters Direct Material Payments are $49,500, $72,300, $100,050 and $79,350 respectively over the four quarters Direct labor Payouts are $84,000, $192,000, $216,000 and $114,000 respectively over the four quarters MOH payment are $68,000, $96,800, $103,200 and $76,000 respectively Selling and admin expenses are $107,000, $143,000, $ 161,000 and $125,000 You are required to highlight excess/deficiency of cash available over disbursement for each of four quarters and suitable action required to be taken on company’s senior management part.
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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Concept explainers
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.
Question
Osaka Manufactures has the following budgeted cash stream for four quarters of an upcoming year i.e. 2021.
- The Beginning cash balance is $ 42,500
- Management plans to spend $130,000 during the year on equipment purchases $50,000 in the first quarter, $40,000 in the second quarter, $20,000 in the third quarter and $20,000 in the fourth quarter
- Board of directors has approved cash dividends of $8,000 per quarter
- Collection from the customers are $ 230,000, $ 480,000, $740,000 & $520,000 respectively in four quarters
- Direct Material Payments are $49,500, $72,300, $100,050 and $79,350 respectively over the four quarters
- Direct labor Payouts are $84,000, $192,000, $216,000 and $114,000 respectively over the four quarters
- MOH payment are $68,000, $96,800, $103,200 and $76,000 respectively
- Selling and admin expenses are $107,000, $143,000, $ 161,000 and $125,000
You are required to highlight excess/deficiency of cash available over disbursement for each of four quarters and suitable action required to be taken on company’s senior management part.
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