1.
Introduction: Disbursements refer to the payment of money from the dedicated fund. The payments for the purchase of any kind of raw material in any previous accounting period and current budget period are the disbursements for raw material.
The reason why the total cash disbursements for raw materials increased when the budgeted unit sales changed to 75000 units and the total expected cash collections for the year becomes $2,085,000, required production becomes 274000 units, the cost of raw materials to be purchased is now $1,106,800, and the total cash disbursements for the year will be $1,095,980.
2.
Introduction: Purchase of raw materials considers all goods or equipment necessary to produce final goods and services.
(a) The total expected cash collections for the year under the revised budget, (b) the total required production for the year, (c) the total cost of raw materials to be purchased for the year, (d) the total expected cash payments for raw materials for the year, and (e) if there is a potential problem when the production manager cautioned that the plant cannot produce more than 90,000 units due to limited availability of milling machine then what needs to be done in this situation.
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 8 Solutions
CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
- Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…arrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…arrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…arrow_forward
- Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…arrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…arrow_forwardUpon receipt of the budget the team manager has now informed you that the management of Miller Merchandising & More have indicated a desire to maintain a minimum cash balance of $125,000 each month. Based on the budget prepared, will the business be achieving this desired target? Given that the management does not wish to borrow any funds from outside sources, suggest three (3) internal strategies that the business may employ in order to improve the organization’s monthly cash flow. Each strategy must be fully explained(in detailed).arrow_forward
- Upon receipt of the budget the team manager has now informed you that the management of Miller Merchandising & More have indicated a desire to maintain a minimum cash balance of $125,000 each month. Based on the budget prepared, will the business be achieving this desired target? Given that the management does not wish to borrow any funds from outside sources, suggest three (3) internal strategies that the business may employ in order to improve the organization’s monthly cash flow. Each strategy must be fully explained.arrow_forwardIn an attempt to better understand RR’s cash position, Johnson developed a cash budget for the first 2 months of the year. She has the figures for the other months, but they are not shown. After looking at the cash budget, answer the following questions: What does the cash budget show regarding the target cash level? Should depreciation expense be explicitly included in the cash budget? Why or why not? What are some other potential cash inflows besides collections? How can interest earned or paid on short-term securities or loans be incorporated in the cash budget? In her preliminary cash budget, Johnson has assumed that all sales are collected and thus that RR has no bad debts. Is this realistic? If not, how would bad debts be dealt with in a cash budgeting sense? (Hint: Bad debts will affect collections but not purchases.)arrow_forwardFriendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?arrow_forward
- Varsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales On Account Cash Purchases Purchases On Account November 2022 $142,100 $480,00 $345,000 December 2022 $165,500 $600,000 $25,800 $380,000 January 2023 $171,475 $650,000 $44,625 $400,000 February 2023 $144,940 $700,000 $30,400 $480,000 March 2023 $236,720 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 55% in…arrow_forwardVarsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales on Account Cash Purchases Purchases On Account Nov-22 $142,100 $480,000 $345,000 Dec-22 $165,500 $600,000 $25,800 $380,000 Jan-23 $171,475 $650,000 $44,625 $400,000 Feb-23 $144,940 $700,000 $30,400 $480,000 Mar-23 $236,720 $800,000 $55,100 $540,000…arrow_forwardVarsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales on Account Cash Purchases Purchases On Account Nov-22 $142,100 $480,000 $345,000 Dec-22 $165,500 $600,000 $25,800 $380,000 Jan-23 $171,475 $650,000 $44,625 $400,000 Feb-23 $144,940 $700,000 $30,400 $480,000 Mar-23 $236,720 $800,000 $55,100 $540,000…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)