Congratulations! You have been hired by Eastvaco as Plant Controller for the Cha

Question

Congratulations! You have been hired by Eastvaco as Plant Controller for the Charlotte facility. Your resume includes both financial and managerial accounting experience. You have had extensive experience in accounting for several manufacturing companies. You accepted this current position since it represents a substantial increase in responsibilities and you are eager to impress Sue and Tom. Sue, the Company Controller, has given you an extensive project. Eastvaco has enjoyed greater than industry average revenue, net income and cash flow. The Charlotte facility, initially, had a near monopoly on

Explanation / Answer

Unit sales 100,000 units Unit price $15 Beginning inventory in units 8,000 Desired ending inventory in units 12,000 Product requires: four pounds of raw material costing $2.50 per pound A desired ending raw materials inventory of 6,000 pounds Each product requires 1/2 hour of dirct labor at rate of $9 perhour. Eastvaco experiences the following: expected cash received in (May) of $45,000. has some equipment it is no longer using and plans to sell in May for $3,500 During the (May) payments for materials is expected to be $10,000 direct labor payroll is expected to be $12,500. miscellaneous expenditures is expected to total $14,900 Expected collections on previous month (April) accounts receivable is $600,000.Expected collections on March sales is $300,000. Total Budget May = $45,000+$3,500+$1500000-$14,900-$12,500-$10,000-6000*$2.5 =$1496100

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