1.) The Hamblen Company has budgeted production for the next five quarters as fo

Question

1.) The Hamblen Company has budgeted production for the next five quarters as follows:

                                         2004       2004       2004      2004       2005

   Quarter ...............          First    Second     Third     Fourth      First

   Production in units ... 10,000    12,000    16,000    14,000    11,000

Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year totals 4,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's raw material needs.

The raw materials inventory at the end of 2004 is expected to be:

2.) The Martin Company had a finished goods inventory of 55,000 units on January 1. It's projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Martin Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.What would be the budgeted production for February?

3.) During December, Johnson company had the following cash information: The ending November cash balance is budgeted to be $40,000. Cash receipts are $840,000, and cash disbursements are $890,000 during December. The company wants to maintain a minimum cash balance of $20,000. What is the minimum cash loan that must be planned to be borrowed from the Bank during December?

Explanation / Answer

Answer:1) 2004 2004 2004 2004 2005 Quarter1 Quarter2 Quarter3 Quarter4 Quarter1 Production (in Units) 10000 12000 16000 14000 11000 Raw Material required to produce 40000 48000 64000 56000 44000 Opening Stock of Raw Material 4000 4800 6400 5600 4400 Closing Stock of Raw Material 4800 6400 5600 4400 The raw materials inventory at the end of 2004 is expected to be: 4400 lbs Answer:2) January February March April Opening Finished Good Inventory 55000 36000 42000 46000 Projected Sale 200000 180000 210000 230000 Closning Finished Good Inventory 36000 42000 46000 Budgeted Production 181000 186000 214000 The budgeted production for February would be 186000 Answer:3) December Opening Cash balance $ 40,000.00 Cash reciept $ 840,000.00 Cash Disbursement $ 890,000.00 Closing Cash Balance $ (10,000.00) Minimum Cash balance $ 20,000.00 Minimum Cash Loan $ 30,000.00 The minimum cash loan that must be planned to be borrowed from the Bank during December $30000

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