Kayak Distributors, a wholesale company, is considering whether to open a new di
ID: 2466545 • Letter: K
Question
Kayak Distributors, a wholesale company, is considering whether to open a new distribution center. The Center would open January 1, 2017. To make the decision, the board of directors requires a master budget for the center's first quarter of operations. You are to construct the 1^st quarter master budget based on the following expectations: January sales are estimated to be on $ 400,000 of which $ 100,000 will be cash sales and $ 300, 0000 will be on credit. The company expects sales to grow 10% per month for the first few months of operations, Prepare a sales budget for the first quarter. Cost of good, sold will be 60% of sales. Company policy is to budget and ending inventory balance equal cost of goods sold to be $314,000. Prepare an inventory purchases budget. Credit: Castro Company makes and sells a single product. Castro Incurred the following costs In Its most recent fiscal year. Castro could purchase the products that it currently makes, if it purchased the items, the company would continue to sell them using its own logo, advertising program and sales staff Identify each cost as relevant or irrelevant to the outsourcing decision and indicate whether the cost fixed or variable relative to the number of products manufactured and sold.Explanation / Answer
1./
A./
SALES BUDGET FOR THE FIRST QUARTER
B./
INVENTORY PURCHASE BUDGET
2./
DESCRIPTION JANUARY FEBRUARY MARCH CASH CREDIT CASH CREDIT CASH CREDIT EASTMETED SALES $100000 $300000 $110000 $330000 $121000 $363000Related Questions
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