Is this correct? IF not, please indicate where. Also, if I have left out any cal

Question

Is this correct? IF not, please indicate where. Also, if I have left out any calculations explaining, please add... Thank you.

Question 1 (10 marks)

Question 1 (10 marks)

Pottery Manufacturing Limited has projected sales and production in units for the second quarter of the coming year as follows: October November December Sales 50,000 40,000 60,000 Production 60,000 50,000 50,000 Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $100,000 per month, paid in the month incurred. The accounts payable balance on September 30 totals $190,000, which will be paid in October.

All units are sold on account (as credit sales) for $14 each. There are no cash sales. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on October 1 totalled $500,000 ($90,000 from August's sales and the remainder from September). Required: a. Prepare a schedule for each month showing budgeted cash disbursements for the Pottery Manufacturing Limited. (5 marks) October November December Acc. Payable 190000 October production cost 120000 180000 November production cost 100000 150000 December production cost 100000 cash disbursements for production cost 310000 280000 250000 selling and admin. Expenses 100000 100000 100000 Total cash disbursements 410000 380000 350000 October November December Units made 60000 50000 50000 production cost/unit 5 5 5 budgeted production cost 300000 250000 250000 October November December cash reciepts of Acc. Recievables August sales 90000 September sales 307500 102500 October sales 420000 210000 70000 November sales 336000 168000 December sales 504000 Total Cash Receipts 817500 648500 742000 October November December Units sold 50000 40000 60000 Selling Price/ unit 14 14 14 budgeted sales 700000 560000 840000

Explanation / Answer

the answer is correct.

a. Prepare a schedule for each month showing budgeted cash disbursements for the Pottery Manufacturing Limited. (5 marks) October November December Acc. Payable $190,000.00 October production cost $120,000.00 $180,000.00 November production cost $100,000.00 $150,000.00 December production cost $100,000.00 cash disbursements for production cost $310,000.00 $280,000.00 $250,000.00 selling and admin. Expenses $100,000.00 $100,000.00 $100,000.00 Total cash disbursements $410,000.00 $380,000.00 $350,000.00 October November December Units made 60000 50000 50000 production cost/unit 5 5 5 budgeted production cost $300,000.00 $250,000.00 $250,000.00 October November December cash reciepts of Acc. Recievables August sales $ 90,000.00 September sales $307,500.00 $102,500.00 October sales $420,000.00 $210,000.00 $ 70,000.00 November sales $336,000.00 $168,000.00 December sales $504,000.00 Total Cash Receipts $817,500.00 $648,500.00 $742,000.00 October November December Units sold 50000 40000 60000 Selling Price/ unit 14 14 14 budgeted sales $700,000.00 $560,000.00 $840,000.00

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.