FREE 3556673dBcddec7dd1b4c078245ce6449 fe93c230092156295bae26915b6deaf Reference
ID: 2598281 • Letter: F
Question
FREE 3556673dBcddec7dd1b4c078245ce6449 fe93c230092156295bae26915b6deaf References Mailings ReviewV aB Beecher Inc. is planning to purchase inventory for resale costing $90,000 in October, $70,000 in November, and $40,000 in December. The company pays for 40% of its purchases in the month of purchase and 60% in the month following purchase, what would be the budgeted cash disbursements for purchases of inventory in December? a-$200,000 b-$70,000 c-$40,000 d-$58,000 in completing the Ending Finished Goods Inventory Budget, the managers of limbob Co. have determined that there should be 5,000 units of finished goods inventory on hand at the end of the budgeted period. In preparing other budgets they have used the following estimates of quantities and costs required to complete one unit: Quantity Cost $1.00 per Direct materials10.0 kilograms Direct labourS0 hours $20.00 per hour Manufacturing overhead is allocated at the rate of $5.00 per direct labour hour. Using the above data, the ending finished goods Inventory should be: a-$100,000. b-$200,000 c-$112,500. d-$150,000 Actual sales in Ward Company were $30,000 in june, $50,000 in July, and $70,000 in August. Budgeted sales in September are $60,000. Thirty percent of a month's sales are collected in the month of sale, 50% in the first month after sale, 15% in the second month after sale, and the remaining 5% are uncollectible. Budgeted cash receipts for September should be: a-$70,000 b-$62,000 c-$57,000 d-$60,500Explanation / Answer
1. In December 40% of December’s purchase would be paid for and 60% of November purchase would also be paid for.
Thus cash disbursement in December = 40% of 40,000+ 60% of 70,000
= 16,000+42,000
= $58,000
Hence the answer is option “d” - $58,000
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