Chapter 8 Handout Problems

Chapter 8 Handout Problems - / Examgk' 2 “- “- Southem...

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Unformatted text preview: / Examgk' 2 “- “- Southem Mills is a textile manufacturing company in eastern Tennessee. Every year the company prepares a complete set ofoperating budgets. The budgeting procesx begins with information supplied by the Sales and Marketing department. The balance in inventory at the beginning of the year was 500‘000 square yards of fabric. The company plans to have inventory at the end 01‘ the mouth equal to 50% of the following month's sales. The marketing department has predicted unit sales (in square yards of fabric) to be as follows: January 1.480.000 sq. yds. February 2. [20,000 sq. yds. March 1.3 00.000 sq. yds. Required: \ 3. Prepare a production budget for Southern Mills for January. I .‘l “F SINK, ‘IP I) 4'..__. .. 7’ we" . in .i,‘ 1H1tr The balance in the raw materials inventory at the beginning ol‘the year was 650.000 units. The production department has predicted unit production (in square yards. of fabric) to he as follows: January 1.600.000 sq. yds. February 2.000.000 sq. yds. March 1.400.000 sq. yds. Raw materials required per square yard of fabric equal 2 pounds. Raw titaterials inventories are planned to be 20 per cent of the next month’s production needs. Raw material costs $0.50 per pound. Req u i red : b. Prepare a raw materials budget for February. Exumglc 3 Budgeted sales for the second quarter of the current year are as follows: Budgeted Sales April $150.000 May 200.000 June 180.000 The company collects 20 percent in the month olsale. 70 percent in the first month following the sale. and It) percent in the second month following the sale. HApt'il sales to he collected in May are: 2) Total cash collected in June will be I“) t Exrrmgle 4 The Diamond Store is a wholesale restaurant supply company. Sales are made in cash or on credit. 20% of the sales are paid in cash at the point of sale. 30% ofthe sales are collected in the first month following the sale. and 40% of the sales are collected in the second month following the sale. The remaining l0% is uncollectibie and written off. Sales Budget Cash Disbursement January $221000 100.000 February $310000 230.000 March $350000 170.000 April 5400.000 21 1.000 May $300000 210.000 lune $271000 [23.000 The beginning Cash balance for April is expected to he $291000. Prepare a cash budget for April using this in formation. r/ I Practice .1. Budgets are prepared in which ot‘the following orders? a. production budget. sales budget. direct labor budget production budget. cost of goods sold budget. direct labor budget sales budget. cash budget, production budget sales budget. production budget. direct materials purchases budget production budget. Cash budget direct materials purchases budget 9-9? G 2. Diamond Company budgeted the following production in units for the first quarter ofthe year: January 30.000 ‘1 February 20.000 March 40.000 Each unit requires 3 pounds ()fraw material. Diamond's policy is to have 30% oftlte following month's production needs for materials in inventory. On January l. the raw materials inventory equaled H.000 pounds. Raw materials purchases budgeted for February in pounds equal 0.0"”) 1’ ...
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This homework help was uploaded on 04/15/2008 for the course ACCT 2020 taught by Professor Lui during the Spring '08 term at North Texas.

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Chapter 8 Handout Problems - / Examgk' 2 “- “- Southem...

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