ONLY #6 and #7 Please Stuck on them ! 1. Sales forecast: January: 1,100 units; F

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ONLY #6 and #7 Please Stuck on them !

1. Sales forecast: January: 1,100 units; February: 1,500 units; March: 2,300 units; April: 2,500 units. The unit sales price is $58. All sales are on credit and collections are 30% in the month of sale and 70% the following month. Accounts receivable as of December 31,2016 is $15,900 and this amount is expected to be collected in January 2017 2. End of month inventory must equal 70% of next month's sales. The inventory at the end of December 2016 was 1,200 units. 3·The following are the expected costs for direct materials, direct labor and manufacturing overhead: DM Overhead January $8/unit February $8/unit March A. Direct materials are paid 20% in the month incurred and 80% in the following month. $15/unit $15/unit $15/unit 7,00+1.00 per unit produced 7,500$1.00 per unit produced 7,500$1.00 per unit produced S8/unit Account payable for materials as of December 31, 2016 is $5,000; this amount will be paid in January 2017 B. Direct labor is paid in the month incurred. C. Overhead costs are paid in the month incurred. Fixed overhead includes depreciation of $2,500 per month. 4. Selling costs are sales commissions: S.50 per unit sold; shipping costs: S.20 per unit sold. Administrative costs per month are: salaries: S1,500; rent: S500; depreciation: $800. All costs are paid in month incurred. 5. The company plans to buy equipment costing S30,000 to be paid in cash in January

Explanation / Answer

Solution:-

6.

7. Cash Budget

Selling and Admisnitrative Exepnese Budget Particulars January February March April Selling Costs Sales Commision 550 750 1150 1250 (0.50*1100) (0.50*1500) (0.50*2300) (0.50*2500) Shipping Cost 22000 30000 46000 50000 (20*1100) (20*1500) (20*2300) (20*2500) Total SellingCosts 22550 30750 47150 51250 Administrative Costs Salaries 1500 1500 1500 1500 Rent 500 500 500 500 Depreciation 800 800 800 800 Total Administrative Cost 2800 2800 2800 2800 Total Cost 25350 33550 49950 54050

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