2 To determine the minim um acceptable level of sales we must first classify

2 to determine the minim um acceptable level of sales

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find more profitable uses for the resources consumed by the Model C3 lawn chair.2.To determine the minimum acceptable level of sales, we must first classify the avoidablecosts into variable and fixed costs as follows: 5
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TASK 3: 1.Prepare a schedule of expected cash collections for July, August, and Septemberand for the quarter in total: 6
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$280,000 x70% $ 196,000 196,000 $280,000 x2% $ 5,600 5,600 From the budgeted sales: July sales $350,000 X 25% $ 87,500 87,500 $350,000 X 70% $ 245,000 245,000 $350,000 X 2% $ 7,000 7,000 August sales $420,000 X 25% $ 105,000 105,000 $420,000 X 70% $ 294,000 294,000 September sales $360,000 X 25% 90,000 90,000 Total cash collections $ 290,700 $ 355,600 $ 391,000 $ 1,037,300 2. Prepare a cash budget, by month and in total, for the third quarter: July August September Quarter Beginning cash balance $ 43,000 $ 28,700 $ 24,300 $ 43,000 Add: cash collections $ 290,700 $ 355,600 $ 391,000 $ 1,037,300 Total cash available $ 333,700 $ 384,300 $ 415,300 $ 1,080,300 Less disbursements: Merchandise purchases $ 160,000 $ 170,000 $ 155,000 $ 485,000 Salaries and wages $ 70,000 $ 70,000 $ 65,000 $ 205,000 Advertising $ 80,000 $ 90,000 $ 100,000 $ 270,000 Rent payments $ 30,000 $ 30,000 $ 30,000 $ 90,000 Equipment purchases $ 25,000 - - $ 25,000 7
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