below $10,000 plus 15% of cost of goods sold for the follow director expects sal

Question

below $10,000 plus 15% of cost of goods sold for the follow director expects sales of $245,000 during the fourth quarter quarte $23,125 Requirement sUIU The January 1 inve arter. The In the past, cost of goods an sold for the entire nine-month period cost of goods sold, inventory, and purchases budget for e quarters of the year Compute cost of goods sold for the PROBLEMS Group A P9-57A Comprehensive budgeting problem (Learning Objectives 2 & 3) r of the Martin Manufacturing is preparing its master budget for the first year. The following data pertain to Martin Manufacturing's operations Current Assets as of December 31 (prior year): s 450 Cash Accounts rece vable, r 4750 $ 15.7 120000 $42 400 124000 $ 23,100 Property, plant, and equipment, ne Accounts payable.. Capital stock Retained earnings a. Actual sales in December were $70,000. Selling price per unit is projected to tem stable at $10 per unit throughout the budget period. Sales for the first five month i the upcoming year are budgeted to be as follows: January February March.. April May. $ 80,00 $92000 $99,00 $ 97,000 85,00 b. Sales are 30% cash and 70% credit. All credit sales are collected in the month follo ing the sale.

Explanation / Answer

Cash Collection Budget For the Quarter Ended March 31 Month January February March Quarter Cash Sales $24,000 $27,600 $29,700 $81,300 Credit Sales $47,000 $56,000 $64,400 $167,400 Total Cash Collections $71,000 $83,600 $94,100 $248,700 Production Budget For the Quarter Ended March 31 Month January February March Quarter Unit Sales 8000 9200 9900 27100 Plus: Desired ending inventory 2300 2475 2425 2425 Total needed 10300 11675 12325 29525 Less: Beginning inventory 2000 2300 2475 2000 Number of units to produce 8300 9375 9850 27525 Direct Materials Budget For the Quarter Ended March 31 Month January February March Quarter Units to be produced ( from production budget) 8300 9375 9850 27525 Multiply by : Quantity of DM needed per unit 2 2 2 2 Quantity (pounds) needed for production 16600 18750 19700 55050 Plus: Desired ending inventory of DM 1875 1970 2010 2010 Total quantity (pounds) needed 18475 20720 21710 57060 Less: Beginning inventory of DM 1660 1875 1970 1660 Quantity (pounds) to purchase 16815 18845 19740 55400 Multiply by: Cost per pound $2 $2 $2 $2 Total cost of DM purchases $33,630 $37,690 $39,480 $110,800 Cash Payments for Direct Materials Budget For the Quarter Ended March 31 Month January February March Quarter 20% of current month DM purchases $6,726 $7,538 $7,896 $22,160 80% of prior month DM purchases $42,400 $26,904 $30,152 $99,456 Total cash payments $49,126 $34,442 $38,048 $121,616 Cash Payments for Direct Labor Budget For the Quarter Ended March 31 Month January February March Quarter Total cost of Direct Labor $996 $1,125 $1,182 $3,303

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