Chapter 6 Homework - Cost Accounting 13 edition CHAPTER 6...

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Cost Accounting 13 edition CHAPTER 6 Activity Based Costing & Management 27, 28, 32, and 35 Not on My Accounting Lab 6-27 Cash flow analysis, chapter appendix. 1. The cash that TabComp, Inc., can expect to collect during April 2006 is calculated below. April cash receipts: April cash sales ($400,000 × .25) $100,000 April credit card sales ($400,000 × .30 × .96) 115,200 Collections on account: March ($480,000 × .45 × .70) 151,200 February ($500,000 × .45 × .28) 63,000 January (uncollectible-not relevant) 0 Total collections $429,400 2. (a) The projected number of the MZB-33 computer hardware units that TabComp, Inc., will order on January 25, 2006, is calculated as follows. MZB-33 Units March sales 110 Plus: Ending inventory a 27 Total needed 137 Less: Beginning inventory b 33 Projected purchases in units 104 a 0.30 × 90 unit sales in April b 0.30 × 110 unit sales in March (b) Selling price = $2,025,000 ÷ 675 units, or for March, $330,000 ÷ 110 units = $3,000 per unit Purchase price per unit, 60% × $3,000 $ 1,800 Projected unit purchases  x     104     Total MZB-33 purchases, $1,800 × 104 $187,200 3. Monthly cash budgets are prepared by companies such as TabComp, Inc., in order to plan for their cash needs. This means identifying when both excess cash and cash shortages may occur. A company needs to know when cash shortages will occur so that prior arrangements can be made with lending institutions in order to have cash available for borrowing when the 6- 1
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company needs it. At the same time, a company should be aware of when there is excess cash available for investment or for repaying loans. 2
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6-28 Budget schedules for a manufacturer. 1a. Revenues Budget Executive Line Chairman Line Total Units sold 740 390 Selling price $ 1,020 $ 1,600 Budgeted revenues $754,800 $624,000 $1,378,800 b. Production Budget in Units Executive Line Chairman Line Budgeted unit sales 740 390 Add budgeted ending fin. goods inventory 30 15 Total requirements 770 405 Deduct beginning fin. goods. inventory 20 5 Budgeted production 750 400 c. Direct Materials Usage Budget (units) Oak Red Oak Oak Legs Red Oak Legs Total Executive Line: 1. Budgeted input per f.g. unit 16 4 2. Budgeted production 750 750 3. Budgeted usage (1 × 2) 12,000 3,000 Chairman Line: 4. Budgeted input per f.g. unit 25 4 5. Budgeted production 400 400 6. Budgeted usage (4 × 5) 10,000 1,600 7. Total direct materials usage (3 + 6) 12,000 10,000 3,000 1,600 Direct Materials Cost Budget 8. Beginning inventory 320 150 100 40 9. Unit price (FIFO) $18 $23 $11 $17 10. Cost of DM used from beginning inventory (8 × 9) $5,760 $3,450 $1,100 $680 $10,990 11. Materials to be used from purchases (7 – 8) 11,680 9,850 2,900 1,560 12. Cost of DM in March $20 $25 $12 $18 13. Cost of DM purchased and used in March (11 × 12) $233,600 $246,250 $34,800 $28,080 $542,730 14. Direct materials to be used (10 + 13) $239,360 $249,700 $35,900 $28,760 $553,720 6- 3
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Direct Materials Purchases Budget Oak Red Oak Oak Legs Red Oak Legs Total Budgeted usage (from line 7) 12,000 10,000 3,000 1,600 Add target ending inventory 192 200 80 44 Total requirements 12,192 10,200 3,080 1,644 Deduct beginning inventory 320 150 100 40 Total DM purchases 11,872 10,050 2,980 1,604 Purchase price (March) $20 $25 $12
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