Week 4 Class Exercise

Week 4 Class Exercise - month following the sale. The...

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Week 4 Class Exercise 1. The Drew Company has the following information: Month Budgeted Sales March $150,000 April 153,000 May 151,000 June 254,500 July 252,500 In addition, the gross profit rate is 40% and the desired ending inventory level is 20% of next month’s sales. Required: Prepare a purchases budget for April through June.
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2. Bates Corporation has prepared the following sales budget: Month Expected Sales May $84,000 June 100,000 July 92,000 August 116,000 September 98,000 Credit sales are 80% of total sales. Collections are 80% in the month of sale, 15% in the
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Unformatted text preview: month following the sale. The remaining 5% is expected to be uncollectible. Required: Prepare a schedule of cash collections for June through August. 3. Use the following data to prepare a flexible budget for possible sales/production levels of 5,000, 5,500, and 6,000 units. Make sure to show the contribution margin at each activity level. Sales price $12.00per unit Variable costs: Manufacturing $6.00 per unit Administrative $1.50 per unit Selling $.50 per unit Fixed costs: Manufacturing $15,000 Administrative $5,000...
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This note was uploaded on 10/05/2010 for the course ACC ACC561 taught by Professor David during the Spring '10 term at University of Phoenix.

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Week 4 Class Exercise - month following the sale. The...

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