Budgeting past experience the collection of accounts receivable is as follows

# Budgeting past experience the collection of accounts

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Budgetingpast experience, the collection of accounts receivable is as follows:Within the discount period80%On the 30th day18%Uncollectible2%Russon’s average markup on its products is 20% of the sales price. Allsales and purchases occur uniformly throughout the month. The salesvalue of shipments for May and the forecasts for the next four monthsfollow:May (actual)P500,000June600,000July700,000August700,000September400,000Russon purchases merchandise for resale to meet the current month’s salesdemand and to maintain a desired monthly ending inventory of 25% of the nextmonth’s sales. All purchases are on credit with terms of net/30. Russon pays for50% of a month’s purchases in the month of purchase and 50% in the monthfollowing the purchase.46.How much cash can Russon plan to collect in September from salesmade in August?A. P337,400C. P400,400B. P343,000D. P280,00047.The budgeted peso value of Russon’s inventory on August 31 will be48.How much cash can Russon plan to collect from accounts receivableduring July?191
1.Answer: AThe amount of fixed costs in operating branches’ 10 warehouses is P400,000 (thefixed cost line intercepts the vertical axis). Total operating costsP2,900,000Less fixed costs400,000Total variable costs (10 warehouses)P2,500,000Variable costs per branch: P2,500,000 10P 250,0002.Answer: ACost of units sold (0.65 x P800,000)P520,000Add Desired ending inventory140,000Total cost of goods available for sale660,000Deduct Beginning inventory 130,000Budgeted purchasesP530,0003.Answer: ACost of goods soldP750,000 x 0.6P450,000Add Ending Inventory P800,000 x 0.6 x 0.5240,000Total available for saleP690,000Deduct Beginning inventory P450,000 x 0.5225,000Budgeted purchases, FebruaryP465,0004.Answer: DCost of salesP120,000Add Desired ending inventory42,000Total available for sale 162,000Deduct Budgeted purchases100,000Beginning inventoryP 62,0005.Answer: ATotal payments for purchases in JuneP140,000Deduct payments applicable to purchase of:June (P100,000 x 0.6) P60,000May (P200,000 x 0.30) 60,000120,000Payments applicable to April purchaseP 20,000Credit purchase in April: P20,000 0.10P200,0006.Answer: CBudgeted sales, First Quarter120,000 unitsAdd Required Ending Finished goods:30% x 160,00048,000unitsTotal units required168,000 unitsLess Beginning Finished goods36,000unitsBudgeted production in units132,000units7.Answer: CSales for three-month period: July400,000August 400,000 x 1.05420,000September 420,000 x 1.05441,000Total1,261,000Inventory, September 30 (441,000 x 1.05 x 0.8)370,440Total Requirements1,631,440Less July Inventory300,000Budgeted Production1,331,440
8.Answer: CBeginning Inventory (8000 x 3.5)28,000Required Purchases8,000Direct Materials Used for Production (8000 x 3) (24,000)Desired Ending Inventory12,0009.Answer: CLLMMNNBudgeted production622,000622,000622,000Required materials per unit ofproduct0.501.001.2Materials required311,000622,000746,400Unit cost P0.60P1.70 P1.00Peso amounts of materials used by units producedP186,600P1,057,400P746,400Budgeted sales in units640,000Add Finished goods, end90,000Total730,000Deduct Finished goods, beginning108,000Budgeted production622,00010.Answer: DRequired pounds by production180,000Ending raw materials required60,000Beginning raw materials( 30,000)Budgeted purchases210,00011.Answer: BMaterials required by June production 1,300 x 22,600Add Ending raw materials inventory 1,600 x 2 x 0.51,600Total materials required4,200Deduct Beginning materials inventory 1,300 x 2 x 0.51,300Materials to be purchased2,90012.Answer: DBudgeted sales18,000Add Finished goods inventory, end11,400Total29,400