If anyone can help im so stuck, if you could please show me how you got it 1. Sa
ID: 2586800 • Letter: I
Question
If anyone can help im so stuck, if you could please show me how you got it
1. Sales forecast: January: 1,100 units; February: 1,500 units; March: 2,300 units; April: 2,500 units. The unit sales price is $58. All sales are on credit and collections are 30% in the month of sale and 70% the following month. Accounts receivable as of December 31,2016 is $15,900 and this amount is expected to be collected in January 2017 2. End of month inventory must equal 70% of next month's sales. The inventory at the end of December 2016 was 1,200 units. 3·The following are the expected costs for direct materials, direct labor and manufacturing overhead: DM Overhead January $8/unit February $8/unit March A. Direct materials are paid 20% in the month incurred and 80% in the following month. $15/unit $15/unit $15/unit 7,00+1.00 per unit produced 7,500$1.00 per unit produced 7,500$1.00 per unit produced S8/unit Account payable for materials as of December 31, 2016 is $5,000; this amount will be paid in January 2017 B. Direct labor is paid in the month incurred. C. Overhead costs are paid in the month incurred. Fixed overhead includes depreciation of $2,500 per month. 4. Selling costs are sales commissions: S.50 per unit sold; shipping costs: S.20 per unit sold. Administrative costs per month are: salaries: S1,500; rent: S500; depreciation: $800. All costs are paid in month incurred. 5. The company plans to buy equipment costing S30,000 to be paid in cash in JanuaryExplanation / Answer
Solution:
1) Sales Budget and expected cash collection
Sales Budget
January
February
March
First quarter total
Budgeted Sales (Units)
1,100
1,500
2,300
4,900
Unit Selling Price
$58
$58
$58
$58
Budgeted Sales Revenue in dollars
$63,800
$87,000
$133,400
$284,200
Schedule of Expected Cash Collections
Schedule of Expected Cash Collection
Sales
% Collected
January
February
March
First quarter total
Accounts Receivable Dec 31, 2016
$15,900
January Sales
$63,800
30%
19,140
January Sales
$63,800
70%
44,660
February Sales
$87,000
30%
$26,100
February Sales
$87,000
70%
$60,900
March Sales
$133,400
30%
$40,020
Total Expected Cash Collection
$35,040
$70,760
$100,920
$206,720
2) Production Budget (in units)
Production Budget
January
February
March
First quarter total
Next Quarter's Expected Unit Sales
1,500
2,300
2,500
Ratio of inventor to future sales
70%
70%
70%
Budgeted Finished Goods Ending Inventory (units)
1,050
1,610
1,750
Add: Budgeted Sales (units)
1,100
1,500
2,300
Required units of available production
2,150
3,110
4,050
Less: Budgeted Beginning Inventory (Ending Finished Goods Inventory of last month)
1,200
1,050
1,610
Units to be produced
950
2,060
2,440
5,450
3) Direct material budget, including schedule of expected cash disbursements
Since raw material quantity per finished goods unit is not given, I am assuming the Units to be produced is the units to be purchased. Accordingly budget is prepared.
Direct Materials Budget
January
February
March
First quarter total
Units to be produced or purchased
950
2,060
2,440
5,450
Direct material cost per unit
$8
$8
$8
$8
Budgeted cost of direct material purchases
$7,600
$16,480
$19,520
$43,600
Schedule of Expected Cash Disbursements
Accounts Payable Dec31, 2016
$5,000
January Purchases (20% in Jan and 80% in Feb)
$1,520
$6,080
February Purchases (20% in Feb and 80% in Mar)
$3,296
$13,184
March Purchases (20% in Mar and 80% in Apr)
$3,904
Total Expected Cash Disbursements for Purchases
$6,520
$9,376
$17,088
$32,984
4) Direct labor Budget
Direct Labor Budget
January
February
March
First quarter total
Units to be produced
950
2,060
2,440
5,450
Direct Labor Cost per unit
$15
$15
$15
$15
Budgeted Direct Labor Cost
$14,250
$30,900
$36,600
$81,750
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining parts.
Sales Budget
January
February
March
First quarter total
Budgeted Sales (Units)
1,100
1,500
2,300
4,900
Unit Selling Price
$58
$58
$58
$58
Budgeted Sales Revenue in dollars
$63,800
$87,000
$133,400
$284,200