Sloan Company has projected sales and production in units for the second quarter
ID: 2479447 • Letter: S
Question
Sloan Company has projected sales and production in units for the second quarter of the coming year as follows:
1. Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 50% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all paid in cash) will amount to $50,000 per month. The accounts payable balance on March 31 totals $79,000, all of which will be paid in April. Prepare a schedule for each month showing budgeted cash disbursements for Edwards Company. (Omit the "$" sign in your response.)
2. Assume that all units are sold on account for $17 each. Cash collections from sales are budgeted at 50% in the month of sale, 40% in the month following the month of sale and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $190,000 ($40,000 from February's sales and the remainder from March sales.) Prepare a schedule for each month showing budgeted cash receipts for Edwards Company. (Omit the "$" sign in your response.)
Sloan Company has projected sales and production in units for the second quarter of the coming year as follows:
Explanation / Answer
1. Cash disbursement budget April May June Production cost 85000 85000 110000 Cash disbursement: Production this month 42500 42500 55000 Production prior month 79000 42500 42500 Selling and administration 50000 50000 50000 Total disbursement 171500 135000 147500 2 Cash Receipts budget April May June Total sales 374000 204000 289000 Cash receipts: February sales 40000 March sales 150000 April sales 187000 149600 37400 May sales 102000 81600 June sales 144500 Total receipts 377000 251600 263500