This problem consists of four independent mini-problems. Omit headings other tha

Question

This problem consists of four independent mini-problems.

Omit headings other than those already given. A. Kriter Kitchen Tools produces and sells insulated ice buckets. The sales budget for 2016 is as follows: 1st quarter — 8,000 units 3rd quarter — 13,000 units 2nd quarter — 11,000 units 4th quarter — 10,000 units Kriter desires an ending inventory equal to 10% of the next quarter's sales. The January 1, 2016 inventory is 800 units. Unit sales during the 1st quarter of 2017 are estimated at 9,000 units. Instructions: Compute required production for 2016, showing quarterly data. Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

B. Shanigan’s Manufacturers is preparing its direct labor budget for the second quarter of 2017 from the following budgeted production figures: April—8,000 units; May—7,000 units; and June—9,000 units. Each unit requires 3.25 hour of direct labor. The hourly wage rates are expected to be $15 in April, and $15.50 in May and June. Instructions: Prepare a direct labor budget for the quarter, showing monthly data. Description April May June Quarter —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

C. JetGreen Cleaners makes 80% of its sales on credit. Experience shows that 25% of the credit customers pay in the month of sale, 55% within the following month, the rest during the next month. Total sales for May, June, July, and August are estimated at $180,000; $220,000; $280,000; and $200,000, respectively. Instructions: Determine budgeted cash receipts for July and August. Description July August —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

D. Southside Sports is preparing its annual cash budget, showing quarterly data, for 2017. A $14,000 cash balance is desired at the end of each quarter. Borrowings and repayments are in $1,000 increments at 6% annual interest. The company borrows at the beginning of a quarter based on the estimated deficiency. Interest is paid only when principal is repaid at the end of a quarter with excess cash. The maximum amount of principal was repaid in the second and fourth quarters. The cash balance on December 31, 2016 is $17,000. Total receipts and disbursements, other than borrowings and principal or interest payments, are estimated at: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Disbursements: $110,000 $135,000 $124,000 $140,000 Receipts: 102,000 142,000 120,000 155,000 Instructions: Prepare a schedule of estimated borrowings and repayments of principal and interest for the four quarters of 2017. Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 ——————————————————————————————————————————

Explanation / Answer

PRODUCTION BUDGET Q-1 Q-2 Q-3 Q-4 YEAR Budgeted Sales Units 8,000 11,000 13,000 10,000 42,000 Add: Desired Ending Finished inventory 1,100 1,300 1,000 900 900 Total Needs 9,100 12,300 14,000 10,900 42,900 Less: Beginning Finished Inventory 800 1,100 1,300 1,000 800 Required Production in units 8,300 11,200 12,700 9,900 42,100 LABOUR COST BUDGETS April May June Quarter Units to be produced 8,000 7,000 9,000 24,000 Labour required per unit 3.25 3.25 3.25 3.25 Labour hours 26000 22750 29250 78000 Labuor Rate per hour 15.00 15.50 15.50 Budgeted Labour cost in $ 390,000 352,625 453,375 1,196,000 EXPECTED CASH COLLECTIONS July Aug Total Cash sales 56,000 40000 96000 May sales 28,800 28800 June sales 96800 35200 132000 July sales 56000 123,200 179,200 Aug sales 40000 40000 Total Cash Collections 237,600 238,400 476,000 Cash Budget Q-1 Q-2 Q-3 Q-4 Cash balance in Beginning 17000 14000 15850 14000 Add: cash receipts 102000 142000 120000 155000 Total cash available 119000 156000 135850 169000 Less: expected disbursals 110000 135000 124000 140000 Excess/ Shortage of cash 9000 21000 11850 29000 Financing: Borrowing 5000 2150 Repayment -5000 -2150 Interest -150 -64.5 Total Financing: 5000 0 2150 0 Ending cash balance 14000 15850 14000 26785.5

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