Explanation Operating expense budget: It is prepared to estimate the operating expenses for the period. It includes all operation expenses including taxes on operating expenses. Statement showing budgeted cash payment: Company DC Cash payment budget For the quarter ended June 30 (Amount in $) Month Particulars April May June 2nd Quarter Direct materials expense (a) 137,000 121,000 146,000 404,000 Direct materials payment in 1st month ( a × 55 % ) 75,350 66,550 80,300 222,200 Direct materials payment in 2nd month (b) 50,400(1) 61,650(2) 54,450(3) 122,210 Total direct materials payment ( a + b ) 125,750 128,200 134,750 344,410 Plus: Direct labor 58,000 68,000 83,000 209,000 Plus: Manufacturing overhead 58,800(4) 74,800(5) 98,800(6) 300,400 Plus: Operating expenses 59,600(7) 70,600(8) 68,600(9) 198,800 Plus: Server expense 6,000 Plus: Tax expense 14,000 Total budgeted cash payment 427,900 475,800 533,900 1,397,020 Table (1) Above calculations are done on the basis of followings: 45% of direct materials are paid in next month. Manufacturing overheads are paid as 160% of direct labor less $34,000. Operating expenses of last month paid less $12,000 depreciation expenses and $3,400 as bad debt expenses in the current month. Working note: Calculation of direct materials expenses for the month of April: Dierct materials payment = 112 , 000 × 45 % = $ 50 , 400 (1) Calculation of direct materials expenses for the month of May: Dierct materials payment = 137 , 000 × 45 % = $ 61 , 500 (2) Calculation of direct materials expenses for the month of June: Dierct materials payment = 121 , 000 × 45 % = $ 54 , 450

Managerial Accounting, Student Value Edition (5th Edition)

5th Edition

ISBN: 9780134067179

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Chapter 9, Problem 9.49BE

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Budgeted cash payment for quarter ending on June 30.

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Chapter 9, Problem 9.48BE

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Chapter 9 Solutions

Managerial Accounting, Student Value Edition (5th Edition)

Ch. 9 - (Learning Objective 1) Which term describes the...Ch. 9 - (Learning Objective 1) Benefits of budgeting...Ch. 9 - Prob. 3QC Ch. 9 - Prob. 4QC Ch. 9 - Prob. 5QC Ch. 9 - Prob. 6QC Ch. 9 - Prob. 7QC Ch. 9 - Prob. 8QC Ch. 9 - Prob. 9QC Ch. 9 - Prob. 10QC

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Budgeted cash payment for quarter ending on June 30.

Solution Summary: The author explains the operating expense budget for the quarter ending on June 30. It includes all operation expenses including taxes.

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