Your department is planning a 10 percent increase in sales for the entire three- month period (February-April). Sales for the period last year were $19,000. Fifty percent of the total planned sales are projected to occur in March, and 25 percent of sales are planned to occur in each of the other two months. Planned stock-sales ratio for each month is 2.0. Total planned reductions for the period are 5 percent of planned sales. Reductions are projected to occur for each month as follows: February (10 percent), March (40 percent), and April (50 percent). An ending inventory of $5,000 is planned for the period. PLANNED REDUCTIONS FOR FEBRUARY ARE: O $150.00 $261.25 $104.50 O $16.50 Question 39 ( Effectively used, open-to-buy allows buyers to accomplish all the following EXCEPT Limit overbuying Reduce markdowns Improve stock turnover Increase markdowns

Your department is planning a 10 percent increase in sales for the entire three- month period (February-April). Sales for the period last year were $19,000. Fifty percent of the total planned sales are projected to occur in March, and 25 percent of sales are planned to occur in each of the other two months. Planned stock-sales ratio for each month is 2.0. Total planned reductions for the period are 5 percent of planned sales. Reductions are projected to occur for each month as follows: February (10 percent), March (40 percent), and April (50 percent). An ending inventory of $5,000 is planned for the period. PLANNED REDUCTIONS FOR FEBRUARY ARE: O $150.00 $261.25 $104.50 O $16.50 Question 39 ( Effectively used, open-to-buy allows buyers to accomplish all the following EXCEPT Limit overbuying Reduce markdowns Improve stock turnover Increase markdowns

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...

See similar textbooks

Similar questions

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.
Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
The data shown were obtained from the financial records of Italian Exports, Inc., for March: Sales are expected to increase each month by 10%. Prepare a budgeted income statement.
Your projected sales for the first 3 months of next year are as follows:January, $15,000; February, $20,000; and March, $25,000. Based on lastyear’s data, cash sales are 20 percent of total sales for each month. Of theaccounts receivable, 60 percent are collected in the month after the sale and40 percent are collected in the second month following the sale. Sales forNovember of the current year are $15,000 and for December are $17,000.You have the following estimated payments: January, $4,500; February,$5,500; and March, $5,200.a. Using the format from the pro forma cash budget in Table 6–8, what is yourmonthly cash budget for January, February, and March?b. What will your accounts receivable be for the beginning of April?c. Will your company have any borrowing requirements for any month duringthis 3-month period?
parker Corp, which operates on a calendar year expects to sell 5.000 in October and expects to increase 20% each month Sales price is expected to stay constant at $11 per unit. What are budgeted revenues for the fourth quarter
Pronghorn Company’s budgeted sales and budgeted cost of goods sold for the coming year are $137,590,000 and $87,840,000, respectively. Short-term interest rates are expected to average 10%. If Pronghorn can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year.Compute its expected cost savings for the coming year.
The Dunce Company expects to have sales of 30,000 in January, 33,000 in February, and 38,000 in March. If 20 percent of sales are for cash, 40 percent are credit sales paid in the month following the sale, and 40 percent are credit sales paid two months following the sale, how much is the expected cash receipts in March?
Grey Manufacturing Company expects sales to total 18,600 units in the first quarter, 16,000 units in the second quarter, and 23,000 units in the third quarter of the current fiscal year. Company policy is to have on hand at the end of each quarter an amount of inventory equal to 10% of the following quarter’s sales. Given this information, how many units should be scheduled for production in the second quarter?
Blue Company’s budgeted sales and budgeted cost of goods sold for the coming year are $144,440,000 and $90,720,000, respectively. Short-term interest rates are expected to average 10%. If Blue can increase inventory turnover from its present level of 9 times a year to a level of 10 times per year.Compute its expected cost savings for the coming year. Expected Cost Savings
Buffalo Company’s budgeted sales and budgeted cost of goods sold for the coming year are $149,520,000 and $103,320,000, respectively. Short-term interest rates are expected to average 10%. If Buffalo can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year.Compute its expected cost savings for the coming year.
Austin Computers company sales in December 2018 were $80,000 and they are expected to rise by $5,000 per month for the next 5 months. Of sales, 80 per cent are collected during the month of sale and the rest two months after sales. The cost of sales is 60 per cent of sales and, the company plans to keep an inventory at the end of each month equal to 40 per cent of the anticipated sales for the next month’s sales. Suppliers are paid one month after purchases are made. Monthly wages amount to $4,500, rent and heating $750 and depreciation $600. A machine is to be bought in March for $6,000 paid in cash. The purchase of the machine means that the monthly change for depreciation will increase by $40. The inventory held at January 1st is $15,500. Required: Calculate the estimated cash collection from sales for February and March. Calculate the purchases for February and March. Assuming that the cash balance at 31/01/2019 is $10,000; prepare a cash budget for the two months ending March…