The balance sheet of Thorny Corp. as of December 31 is as follows Thorny Corp. B

Question

The balance sheet of Thorny Corp. as of December 31 is as follows Thorny Corp. Balance Sheet at December 31 Assets Cash Accounts receivable Raw materials Finished goods Land Plant and equipment Less: Accumulated depreciation S 41,700 192,000 102,240 64,400 50,000 $ 500,000 112,000 388.000 $838 340 Liabilities and Stockholders' Equity Accounts payable to suppliers Common stock Retained earnings S40,000 S 100,000 698 340 798340 The following information has been extracted from Thorny's records 1. Thorny manufactures and sells Gizmos. The company has projected unit sales for its product for the next five months as follows Units 7,000 8,000 10,000 8,000 7,000 January February March April May All sales are made on account. Gizmos sell for $60 each. Forty percent of all sales are collected in the month of sale. The remaining 60% are collected in the following month 2. Management desires to maintain the finished goods inventory for Gizmos at 20% of the following month's sales. Thorny's December 31 finished goods inventory consists of 1,400 Gizmos 3. In order to produce one Gizmo, the following units of raw materials are used

Explanation / Answer

Thorny Corp A Sales Budget Month Sales in Units Selling Price Sales Value 40% in the month of sale 60% in the following month January 7000 60 420000 168000 192000 February 8000 60 480000 192000 252000 March 10000 60 600000 240000 288000 Total 25000 60 1500000 600000 732000 B Production Budget Month Sales Beginning Inventory Ending Inventory=20% of next month's sale Units to be produced January 7000 1400 1600 7200 February 8000 1600 2000 8400 March 10000 2000 1600 9600 April 8000 1600 1400 7800 May 7000 1400 Total C Direct Material Budget What Payment to supplier Month Raw Material Required for production Units to be produced Total Raw material Requirment in units Beginning Inventory Ending Inventory=25% of next month's needs Units to be purchased Cost per unit Total Raw Material Purchase cost 70% in the month of purchase Balance in the subsequent month January 5 7200 36000 18000 10500 28500 4 114000 79800 40000 February 5 8400 42000 10500 12000 43500 4 174000 121800 34200 March 5 9600 48000 12000 9750 45750 4 183000 128100 52200 April 5 7800 39000 9750 0 Total 471000 Huh Month Raw Material Required for production Units to be produced Total Raw material Requirment in units Beginning Inventory Ending Inventory=25% of next month's needs Units to be purchased Cost per unit Total Raw Material Purchase cost January 3 7200 21600 10800 6300 17100 2.8 47880 February 3 8400 25200 6300 7200 26100 2.8 73080 March 3 9600 28800 7200 5850 27450 2.8 76860 April 3 7800 23400 5850 0 Total 197820 D Cash Budget January February March Total Beginning Balance 41700 113900 216050 41700 Receipts from customer 40% in the month of sale 168000 192000 240000 600000 60% in the following month 192000 252000 288000 732000 Total Receipts 401700 557900 744050 1373700 Payment to Raw material supplier 70% in the month of purchase 79800 121800 128100 329700 30% in subseqent month 40000 34200 52300 126500 Direct Labor cost 30600 28050 36975 95625 Factory Overhead 85400 99800 114200 299400 Selling & Administrative expenses 52000 58000 70000 180000 Total Payment 287800 341850 401575 1031225 Ending Balance 113900 216050 342475 342475 Direct Labor Budget Month Production units Per Unit hour Total Hours needed for production Direct Labor Per hour Total Direct Labor Cost January 4800 0.75 3600 8.5 30600 February 4400 0.75 3300 8.5 28050 March 5800 0.75 4350 8.5 36975 Total 95625 As per policy of Chegg, we are supposed to answer maximum of four sub-parts of questions We appreciate the rating of our answers Thank You

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