Concept explainers
Cost of goods sold, inventory, and purchases budget (Learning Objective 4)
Ace Electronics sells tablets. Its sales budget for the nine months ended September 30 follows:
In the past, cost of goods sold has been 70% of total sales. The director of marketing and the financial vice president agree that each quarter’s ending inventory should not be below $20,000 plus 15% of cost of goods sold for the following quarter. The marketing director expects sales of $225,000 during the fourth quarter. The January 1 inventory was $33,125.
Requirement
Prepare a cost of goods sold, inventory, and purchases budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine-month period.
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Chapter 9 Solutions
Managerial Accounting, Student Value Edition (5th Edition)
- At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,060 Purchase season football tickets in September 120 Additional entertainment for each month 310 Pay fall semester tuition in September 4,900 Pay rent at the beginning of each month 440 Pay for food each month 250 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,120 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOYCash BudgetFor the Four Months Ending December 31…arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $7,180 Purchase season football tickets in September 100 Additional entertainment for each month 250 Pay fall semester tuition in September 3,900 Pay rent at the beginning of each month 350 Pay for food each month 200 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 890 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. b. Are the four monthly budgets that are presented prepared as static…arrow_forwardAt the beginning of the school year, Craig Kovar decided to prepare a cash budget for the monthsof September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The followinginformation relates to the budget: Cash balance, September 1 (from a summer job) . . . . . . . . . . . . . . . . . $9,250Purchase season football tickets in September . . . . . . . . . . . . . . . . . . . . . . 160Additional entertainment for each month . . . . . . . . . . . . . . . . . .. . . . . . . . . 250Pay fall semester tuition in September . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800Pay rent at the beginning of each month . . . . . . . . . . . . . . . . . . . . . . . . . . . 600Pay for food each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550Pay apartment deposit on September 2 (to be returned December 15) . 600Part-time job earnings each…arrow_forward
- At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September 210 Additional entertainment for each month 275 Pay fall semester tuition in September 3,700 Pay rent at the beginning of each month 600 Pay for food each month 235 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 1,400 Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?Static c. Malloy can see that her present plan will not provide sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $fill in…arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September 210 Additional entertainment for each month 275 Pay fall semester tuition in September 3,700 Pay rent at the beginning of each month 600 Pay for food each month 235 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 1,400 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. Katherine MalloyCash BudgetFor the Four Months Ending December 31…arrow_forwardPersonal Budget At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $8,860 Purchase season football tickets in September 120 Additional entertainment for each month 310 Pay fall semester tuition in September 4,800 Pay rent at the beginning of each month 430 Pay for food each month 240 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,100 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOY Cash Budget For the Four…arrow_forward
- Roberds Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: Fixed element per month Variable element per student Variable element per course Revenue $ 0 $ 298 $ 0 Faculty wages $ 0 $ 0 $ 3,100 Course supplies $ 0 $ 52 $ 40 Administrative expenses $ 26,500 $ 27 $ 52 In March, the school budgeted for 1,910 students and 88 courses. The school's income statement showing the actual results for the month appears below: Roberds Tech Income Statement For the Month Ended March 31 Actual students 1,810 Actual courses 91 Revenue $ 411,340 Expenses: Faculty wages 214,950 Course supplies 62,590 Administrative expenses 84,562 Total expense 362,102 Net operating income $ 49,238 Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending…arrow_forwardAt the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla WescottCash BudgetFor the Four Months Ending…arrow_forwardPersonal Budget At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $8,680 Purchase season football tickets in September 120 Additional entertainment for each month 300 Pay fall semester tuition in September 4,700 Pay rent at the beginning of each month 420 Pay for food each month 240 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,080 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOY Cash Budget For the Four Months Ending…arrow_forward
- At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $6,540 Purchase season football tickets in September 90 Additional entertainment for each month 230 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 320 Pay for food each month 180 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 810 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOY Cash Budget For the Four Months Ending December…arrow_forwardPersonal Budget At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September 210 Additional entertainment for each month 275 Pay fall semester tuition in September 3,700 Pay rent at the beginning of each month 600 Pay for food each month 235 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 1,400 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. Katherine Malloy Cash Budget For the Four…arrow_forward(1) At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,800 Purchase season football tickets in September 170 Additional entertainment for each month 270 Pay fall semester tuition in September 5,100 Pay rent at the beginning of each month 650 Pay for food each month 600 Pay apartment deposit on September 2 (to be returned December 15) 650 Part-time job earnings each month (net of taxes) 1,300 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.arrow_forward
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