I mostly need help with the cash budget, projected unit cost to produce on Gizmo
ID: 2589227 • Letter: I
Question
I mostly need help with the cash budget, projected unit cost to produce on Gizmo, budgeted income statement, and budgeted balance sheet.
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 usedExplanation / Answer
Sales Budget Jan Feb March Total Apr May Sales in Units 7,000 8,000 10,000 25,000 8,000 7,000 Sp Per Unit 60 60 60 60 60 60 Total Sales in $ 420,000 480,000 600,000 1,500,000 480,000 420,000 Schedule of Expected Cash Collections from Sales Jan Feb March Total Collection from Accounts Receivables Accounts Receivable 192,000 192,000 Jan Sales 168,000 252,000 420,000 Feb Sales - 192,000 288,000 480,000 March Sales - - 240,000 240,000 Total cash Collections 360,000 444,000 528,000 1,332,000 Merchandise Purchase Budget Jan Feb March Total Apr May Sales In units 7,000 8,000 10,000 25,000 8,000 7,000 Add: Closing Inventory in units 1,600 2,000 1,600 5,200 1400 Total Needs 8,600 10,000 11,600 30,200 9,400 Less: opening Inventory in uints (1,400) (1,600) (2,000) (5,000) (1,600) Required Production in Units 7,200 8,400 9,600 25,200 7,800 Direct Materials Budget Jan Feb March Total Apr What Raw Material Required Production in Units 7,200 8,400 9,600 25,200 7,800 Direct Materials Per Unit 5 5 5 5 5 Total Pounds needed for production 36,000 42,000 48,000 126,000 39,000 ADD: Desired ending direct materials 10,500 12,000 9,750 32,250 Total Materials Required 46,500 54,000 57,750 158,250 LESS: Beginning direct materials (18,000) (10,500) (12,000) (40,500) Direct Material Purchases 28,500 43,500 45,750 117,750 Cost Per Pound 4 4 4 4 Total Cost of Direct Materials - What 114,000 174,000 183,000 471,000 Huh Raw Material Direct Material Purchases 7,200 8,400 9,600 25,200 7,800 Direct Materials Per Unit 3 3 3 3 3 Total Pounds needed for production 21,600 25,200 28,800 75,600 23,400 ADD: Desired ending direct materials 6,300 7,200 5,850 19,350 Total Materials Required 27,900 32,400 34,650 94,950 LESS: Beginning direct materials (10,800) (6,300) (7,200) (24,300) Direct Material Purchases 17,100 26,100 27,450 70,650 Cost Per Pound 2.80 2.80 2.80 2.80 Total Cost of Direct Materials - Huh 47,880 73,080 76,860 197,820 Total Cost of Materials Purchased 161,880 247,080 259,860 668,820 Schedule of Cash payments to Suppliers Jan Feb March Total Cash Payment Accounts Payable 40,000 40,000 April Purchases 113,316 48,564 161,880 May Purchases 172,956 74,124 247,080 June Purchases 181,902 181,902 Total Cash Payment to Suppliers 153,316 221,520 256,026 630,862 Direct Labor Budget Jan Feb March Total Required Production in Units 7,200 8,400 9,600 25,200 Direct Labor Hours per Unit 0.50 0.50 0.50 0.50 Total Direct Labor Hours needed 3,600 4,200 4,800 12,600 Direct Labor Hours Rate 24 24 24 24 Direct Labor Hours Cost 86,400 100,800 115,200 302,400 Manufacturing Overhead Budget Jan Feb March Total Total Direct Labor Hours needed 3,600 4,200 4,800 12,600 Factory Overhead rate per Lab Hr 12 12 12 12 Total Manufacturing Overhead 43,200 50,400 57,600 151,200 Depreciation per Annum 1,000 1,000 1,000 3,000 Cash paid for Manufacturing Overhead 42,200 49,400 56,600 148,200 Selling & Admn. Budget Jan Feb March Total Fixed Selling & Admn. Exp. 10,000 10,000 10,000 30,000 Variable Selling & Admn. Exp. - 10% of Sales 42,000 48,000 60,000 150,000 Total Cash Paid & Selling and Admn. Exp. 52,000 58,000 70,000 180,000 Cash budget Jan Feb March Total Opening cash Balance 41,700 67,784 82,064 41,700 Add: receipts Collection from Customers 360,000 444,000 528,000 1,332,000 Total Cash available 401,700 511,784 610,064 1,373,700 Less: Disbursements Cash Disbursement to Suppliesrs 153,316 221,520 256,026 630,862 Direct Labor 86,400 100,800 115,200 302,400 Manufacturing Overhead 42,200 49,400 56,600 148,200 Selling & Admn. Exp. 52,000 58,000 70,000 180,000 Total Disbursement 333,916 429,720 497,826 1,261,462 Cash Balance Closing 67,784 82,064 112,238 112,238 Income Statement Jan Feb March Sales 420,000 480,000 600,000 Less: Cost of Goods Sold 324,240 371,200 464,000 Gross Margin 95,760 108,800 136,000 Selling & Admn. Expenses 52,000 58,000 70,000 Operating Income 43,760 50,800 66,000 Cost Per Unit Jan Feb March Direct Material What 20.00 20.00 20.00 Huh 8.40 8.40 8.40 Direct Labor 12.00 12.00 12.00 Factory Overhead 6.00 6.00 6.00 Cost per Unit 46.40 46.40 46.40 Cost of Goods Sold No of Units Sold 7,000 8,000 10,000 No of Units Produced 7,200 8,400 9,600 Cost of Goods Sold - Units Beginning Inventory 1,400 1,600 2,000 Produced During the month 5,600 6,400 8,000 Cost of Goods Sold (in $) Beginning Inventory Produced During the month 64,400 74,240 92,800 Total Cost of Goods Sold 259,840 296,960 371,200 Total Cost of Goods Sold 324,240 371,200 464,000 Budgeted Balance Sheet Jan Feb March Assets Current Assets Cash 67,784 82,064 112,238 Accounts receivables 252,000 288,000 360,000 Raw Material Inventory 59,640 68,160 55,380 Finished Goods Inventory 74,240 92,800 74,240 Fixed Assets Land 50,000 50,000 50,000 Plant & Equipment 500,000 500,000 500,000 Less: Dep. (113,000) (114,000) (115,000) Total Assets 890,664 967,024 1,036,858 Liabilities Accounts Payable 48,564 74,124 77,958 Total liabilities 48,564 74,124 77,958 Shareholders's Equity Common Stock 100,000 100,000 100,000 Retained Earnings 742,100 792,900 858,900 Total Stockholders equity 842,100 892,900 958,900 Total liabilities & Stockholders' Equity 890,664 967,024 1,036,858 Raw Material Inventory Jan Feb March What 42,000 48,000 39,000 Huh 17,640 20,160 16,380 Total Raw Material Inventory 59,640 68,160 55,380 Schedule of Retained Earnings Jan Feb March Opening Balance 698340 742,100 792,900 Add: net income 43,760 50,800 66,000 Closing Balance 742,100 792,900 858,900
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