TestQuestionsChapter 9.docx - Sparks Corporation has a cash...

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Sparks Corporation has a cash balance of $6,680 on April 1. The company must maintain a minimum cash balance of $6,500. During April, expected cash receipts are $64,200. Cash disbursements during the month are expected to total $69,400. Ignoring interest payments, during April the company will need to borrow: rev: 07_01_2016_QC_CS-55011 $6,500 $5,200 $1,480 $5,020 Beginning cash balance $ 6,680 Add cash receipts 64,200 Total cash available 70,880 Less cash disbursements 69,400 Excess (deficiency) of cash available over disbursements $ 1,480 The company will need to borrow $5,020 to maintain its minimum cash balance of $6,500. Morrish Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 6,300 direct labor-hours will be required in January. The variable overhead rate is $3.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $108,990 per month, which includes depreciation of $20,790. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: $129,150 $108,360 $20,160 $82,530 Manufacturing Overhead Budget January Budgeted direct labor-hours 6,300 Variable manufacturing overhead rate $ 3.20 Variable manufacturing overhead $20,160 Fixed manufacturing overhead 108,990 Total manufacturing overhead 129,150 Less depreciation 20,790 Cash disbursement for manufacturing overhead $108,360 Prester Corporation has budgeted production for next year as follows:
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Quarter First Second Third Fourth Production in units 65,700 78,000 92,100 98,400 Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 33,700 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be: 163,050 pounds 156,000 pounds 202,050 pounds 148,950 pounds Direct Materials Budget Second Quarter Required production in units 78,000 Raw materials required per unit 2 156,000 Add desired ending raw materials inventory (92,100 units × 2 pounds per unit × 25%) 46,050 Total raw materials needs 202,050 Less beginning raw materials inventory (78,000 units × 2 pounds per unit × 25%) 39,000 Raw materials to be purchased 163,050 Home Corporation will open a new store on January 1. Based on experience from its other retail outlets, Home Corporation is making the following sales projections: Cash Sales Credit Sales January $69,200 $58,600 February $49,200 $69,400 March $57,200 $78,800 April $48,400 $90,600 Home Corporation estimates that 70% of the credit sales will be collected in the month following the month of sale, with the balance collected in the second month following the month of sale.
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The March 31 balance in accounts receivable will be: $124,620 $78,800 $123,500 $99,620 Uncollected February credit sales (30% × $69,400) Uncollected March credit sales (100% × $78,800) Accounts receivable end of March Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: January Budgeted production (in units) 102,000 Budgeted raw materials purchases (in pounds) 233,400 Two pounds of raw materials are required to produce one unit of product. The company
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