ORIE_350_Homework__11_spring_2007_answers

ORIE_350_Homework__11_spring_2007_answers - ORIE 350...

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ORIE 350 Homework #11 Due April 24, 2007 1. Hicks Corporation seeks your assistance with their budget. At July 30, the company has cash of $5,500, A/R of $437,000, inventory of $309,400, and A/P of $133,045. The company has the following policies: i. All sales are billed on the last day of each month. ii. Collections of A/R are: 85% within one month, 9% within two months, the remainder uncollectable. iii. 54% of expenses are paid in the month in which they are incurred, the remainder the following month. iv. Ending inventory (in units) equals 130% of the next month’s sales. v. Cost of goods sold is $20 per unit vi. S, G, & A Expenses, of which $2000 is depreciation, are 15% of the current month’s sales. Actual and projected sales are: Month Sales ($) Sales (units) June 290,000 9,400 July 363,000 12,100 August 357,000 11,900 September 342,000 11,400 October 360,000 12,000 November 366,000 12,200 a. What are the budgeted purchases for August? b.
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ORIE_350_Homework__11_spring_2007_answers - ORIE 350...

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