Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harnes

Question

Operating Budget, Comprehensive Analysis

Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below.

The following data pertain to production policies and manufacturing specifications followed by Ponderosa:

Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales.

The data on materials used are as follows:

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1.

The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.

Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)

Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)

The unit selling price of the wiring harness assembly is $110.

In February, the company plans to purchase land for future expansion. The land costs $68,000.

All sales and purchases are for cash. The cash balance on January 1 equals $62,800. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum.

I just need the last budget, cash budget (10)

10. Cash budget
Enter a negative balance as a negative amount, and if an amount is zero enter "0".

January 10,000 February 10,500 March 13,700 April 16,000 May 18,500

Explanation / Answer

10. Cash budget

209,000 (Borrowed rounded off to 1,000)

-65.000 (Repaid)

144,000 (Borrowed rounded off to 1,000)

-209,000 (Repaid)

418,000 (Borrowed rounded off to 1,000)

-274,000 (Repaid)

Note 1: Units to be produce

Note 2: Raw material (Part#K298) to be purchase

Note 3: Raw material (Par#C30) to be purchase

January February March Total Beginning balance $62,800 $25,102 $25,749 113,651 Cash receipts 10,000*$110=$1,100,000 10,500*$110=$1,155,000 13,700*$110=1,507,000 3,762,000 Total cash available $1,162,800 $1,180,102 1,532,749 3,875,651 Dibursements: Purchases 22,264*4+33,546*7=323,878 24,192*4+36,138*7=349,734 29,724*4+44,586*7=430,998 1,104,610 DL payroll 11,200*1.5*20=336,000 11,140*1.5*20=334,200 14,160*1.5*20=424,800 1,095,000 Overhead Supplies 1*11,200*1.5=16,800 1*11,140*1.5=16,710 1*14,160*1.5=21,240 54,750 Power 0.2*11,200*1.5=3,360 0.2*11,140*1.5=3,342 0.2*14,160*1.5=4,248 10.950 Maintenance 12,500+1.1*11,200*1.5=30,980 12,500+1.1*11,140*1.5=30,881 12,500+1.1*14,160*1.5=35,864 97,725 Supervision 14,000 14,000 14,000 42,000 Depreciation 44,000 44,000 44,000 132,000 Taxes 4.300 4,300 4,300 12,900 Others 86,000+1.6*11,200*1.5=112,880 86,000+1.6*11,140*1.5=112,736 86,000+1.6*14,160*1.5=119,984 345,600 Marketing & admin Salaries 88,500 88,500 88,500 265,500 Commissionn 1.40*10,000=14,000 1.40*10,500=14,700 1.40*13,700=19,180 47,880 Depreciation 25,000 25,000 25,000 75,000 Shipping 3.6*10,000=36,000 3.6*10,500=37,800 3.6*13,700=49,320 123,120 Others 137,000+1.6*10,000=153,000 137,000+1.6*10,500=153,800 137,000+1.6*13,700=158,920 465,720 Land 68,000 68,000 Total disburements 1,202,698 1,297,703 1,440,354 3,940,755 Ending balance -39.898 -117,601 92,395 -65,104 Financing: Borrowed/repaid 65,000 (64,898 rounded off to 1000)

209,000 (Borrowed rounded off to 1,000)

-65.000 (Repaid)

144,000 (Borrowed rounded off to 1,000)

-209,000 (Repaid)

418,000 (Borrowed rounded off to 1,000)

-274,000 (Repaid)

Interest paid -650 -2090 -2740 Ending Cash balance 25,102 $25,749 $25,305 76,156

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.