Unit 5 cat /flow/connect.html omework Help Save & E You have just been hired as
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Unit 5 cat /flow/connect.html omework Help Save & E You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below The company sells many styles of earrings, but all are sold for the same price-$18 per months and budgeted sales for the next six months follow (in pairs of earrings): pair. Actual sales of earrings for the last three 23,800 June (budget) 29,800 July (budget) 43,800 August (budget) 68,800 September (budget) 28,880 53,800 33,800 31,800 February (actual) April (budget) 103,800 The concentratio., of sales month to supply 40% of the earrings sold in the following month. s before and during May is due to Mothers Day, Sufficient inventory should be on hand at the end of each Suppliers are paid $5.90 for a pair of earrings. One-half of a month's purchases is paid for in the mohtAn addirional paid for in the following month. All sales are on credit Only 20% of 70% a month's sales are coll is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible Monthly operating expenses for the company are given below 6 of 6 NextExplanation / Answer
1 Sales budget April May June Quarter Sales in units 68800 103800 53800 226400 Per unit 18 18 18 18 Sales 1238400 1868400 968400 4075200 2 Budgeted Cash receipt April May June Quarter February sales 53640 53640 March sale 551880 78840 630720 April sales 247680 866880 123840 1238400 May sales 373680 1307880 1681560 June sales 193680 193680 Total collection 853200 1319400 1625400 3798000 3 Production budget April May June Total Sales in units 68,800 1,03,800 53,800 2,26,400 Add ending inventory 41,520 21,520 13,520 13,520 Inventory needed 1,10,320 1,25,320 67,320 2,39,920 Less beginning inventory 27,520 41,520 21,520 27,520 Required Purchase 82,800 83,800 45,800 2,12,400 Cost per unit 5.9 5.9 5.9 5.9 Cost of purchase @5.9 per unit 488520 494420 270220 1253160 4 Cash Disbursement April May June Total March purchase 119000 119000 April purchase 244260 244260 488520 May purchase 247210 247210 494420 June purchase 135110 135110 Total disbursements 363260 491470 382320 1237050 5 Cash budget April May June Quarter Beginning cash balance 93,000 69,654 2,09,848 93,000 Add Cash collections 853200 1319400 1625400 3798000 Total collections 9,46,200 13,89,054 18,35,248 38,91,000 Less Cash disbursements Merchandise purchase 363260 491470 382320 1237050 Advertising 390000 390000 390000 1170000 Rent 37000 37000 37000 111000 Commission 49536 74736 38736 163008 Salaries 144000 144000 144000 432000 Utilities 16500 16500 16500 49500 Equipment purchased 25500 59000 84500 Dividend paid 29250 Total payments 1029546 1179206 1067556 3276308 cash balance -83,346 2,09,848 7,67,692 6,14,692 Financing Loan taken 153000 153000 Loan repaid 153000 153000 Interest paid 4590 4590 Ending cash balance 69,654 2,09,848 6,10,102 6,10,102
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