Exam3REVIEW - Accounting 2302 Exam 3 Review Sales are...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 2302 Exam 3 Review Sales are budgeted at $500,000 for June, $600,000 for July and $625,000 for August. Collections aare expected at 60% month o f sale, 35% the month following sale, and 5 % uncollectible. What are the expected cash collections in July? Company has budgeted sales in units for the next three months as follows: June: 5000 units, July 2800 units, August 4000 units. Inventory on May 31 contained 224 units. Desired ending inventory must be equal to 10% of next months sales. What is the desired ending inventory for July? Given: the number of units to be produced for three consecutive months Quantity of raw material required for each unit Quantity of raw material on hand for next month’s production Calculate the how much raw material to purchase for the 2 nd month. Remember to add the beginning inventory (carried over from ending inventory from the 1 st month!) Given Cash, Credit and total sales for three months. Purchase of inventory = x% of next months sales Cost of goods sold = A% of selling price. All purchases of inventory are on account, 40% paid in month of purchase, remainder paid in following month. What are total budgeted cash payments for inventory purchases in 2 nd month? -Hint: Use total sales. Remember to add the 60% (100%-40%) of the purchases from the 1 st month Given: Budgeted numbers of units to produce, number of direct labor hours to produce each unit, rate of pay for each hour, budgeted finished goods inventory at beginning and end of month. Calculate
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Exam3REVIEW - Accounting 2302 Exam 3 Review Sales are...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online