221_Solutions_Chap_11_Fa_05 - Operational Budgeting and...

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Operational Budgeting and Profit Planning 1 E11-25 The Music Shop Purchases Budget January - May, 2008 January February March April May Purchase units: Budgeted sales 130,000 160,000 200,000 210,000 180,000 Plus desired end. inv.* 64,000 80,000 84,000 72,000 96,000 Total inventory needs 194,000 240,000 284,000 282,000 276,000 Less beginning inv. (40,000 ) (64,000 ) (80,000 ) (84,000) (72,000 ) Purchases 154,000 176,000 204,000 198,000 204,000 *For example, 40% of the following month's sales, 240,000 × 0.40 for May. January February March April May Purchase dollars ($5 per unit): Budgeted cost of. sales $650,000 $800,000 $1,000,000 $1,050,000 $900,000 Plus desired end. inv.* 320,000 400,000 420,000 360,000 480,000 Total inventory needs $970,000 $1,200,000 $1,420,000 $1,410,000 $1,380,000 Less beginning inv. (200,000 ) (320,000 ) (400,000 ) (420,000 ) (360,000 ) Purchase dollars $770,000 $880,000 $1,020,000 $990,000 $1,020,000 *For example, 40% of the following month's sales, $1,050,000 x 0.40 for March.
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Operational Budgeting and Profit Planning 2 E11-27 Wilson's Retail Company Cash Budgets February, March, and April February March April Cash balance, beginning $ 30,000 $ 4,000 $ (7,000) Cash receipts: 60% of current month's sales $ 135,000 $ 120,000 $105,000 40 of previous month's sales 120,000 90,000 80,000 Total receipts 255,000 210,000 185,000 Cash available $285,000 $214,000 $178,000 Budgeted disbursements: 80% of previous month's sales $240,000 $180,000 $160,000 Operating expenses 41,000 41,000 41,000 Total disbursements (281,000 ) (221,000 ) (201,000 ) Cash balance, ending $ 4,000 $ (7,000 ) $ (23,000)
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Operational Budgeting and Profit Planning 3 E11-31 Montana Timber Company Schedule of Cash Disbursements April, May, and June April May June Budgeted sales $180,000 $210,000 $180,000 Lumber purchases* $147,000 $126,000 $161,000 Wages** 27,000 31,500 27,000 Operating expenses*** 16,000 18,000 21,000 Lease payment 12,000 12,000 12,000 Total disbursements $202,000 $187,500 $221,000 *70% of following month's sales, $230,000 × 0.70 of July sales for June purchases **15% of sales
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This homework help was uploaded on 02/19/2008 for the course H ADM 221 taught by Professor Gpotter during the Spring '05 term at Cornell University (Engineering School).

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221_Solutions_Chap_11_Fa_05 - Operational Budgeting and...

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