Soprano Co. is in the process of preparing the second quarter budget for 2010, a
ID: 2375599 • Letter: S
Question
Soprano Co. is in the process of preparing the second quarter budget for 2010, and the following data have been assembled:
The company sells a single product at a selling price of $45 per unit. The estimated sales volume for the next six months is as follows:
All sales are on account. The company's collection experience has been that 44% of a month's sales are collected in the month of sale, 53% are collected in the month following the sale, and 3% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $145,485 on March 31, 2010.
Management's policy is to maintain ending finished goods inventory each month at a level equal to 54% of the next month's budgeted sales. The finished goods inventory on March 31, 2010, is expected to be 3,942 units.
To make one unit of finished product, 4 pounds of materials are required. Management's policy is to have enough materials on hand at the end of each month to equal 44% of the next month's estimated usage. The raw materials inventory is expected to be 15,794 pounds on March 31, 2010.
The cost per pound of raw material is $6.00, and 71% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $53,783 on March 31, 2010.
Prepare a schedule of cash payments for materials, by month and in total, for the second quarter of 2010. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
Soprano Co. is in the process of preparing the second quarter budget for 2010, and the following data have been assembled:
Explanation / Answer
April may june total
march purchases 10503.8 10503.8
April purchases 25716.2 10358.8 36075
May purchases 25361.2 9402.67 34763.87
june 23020.33 23020.33
total cash payment 36220 35720 32423 104364