E8.
11
1. The company's direct materials budget
1st Quarter 2nd Quarter
Required production in units 6,000 7,000
Raws materials needed per unit 3 3
Raws materials to be meet production 18,000 21,000
Add: desired ending raw materials inventory 4,200 4,800
Total raw material needs 22,200 25,800
Less: beginning raw materials inventory 3,600 4,200
Raw materials to be purchased 18,600 21,600
Cost of raw materials per pound 2.5 2.5
Total cost raw materials 46,500 54,000
The schedule of expected cash disbursements for purchase of materials
Accounts payable beginning 11,775
1st Quarter 32,550 13,950
2nd Quarter 37,800
3rd Quarter
4th Quarter
Total 44,325 51,750
2. The company's direct labor budget for the upcoming fiscal year
1st Quarter 2nd Quarter
Bugeted sales in units 6,000 7,000
Direct labor-hours per unit 0.5 0.5
Direct labor-hours 3,000 3,500
Cost of direct labor per hour 12 12
Total 36,000 42,000
3rd Quarter 4th Quarter Year
8,000 5,000 26,000
3 3 3
24,000 15,000 78,000
3,000 3,700 3,700
27,000 18,700 81,700
4,800 3,000 3,600
22,200 15,700 78,100
2.5 2.5 2.5
55,500 39,250 195,250
70% 30%
11,775
46,500
16,200 54,000
38,850 16,650 55,500
27,475 27,475
55,050 44,125 195,250
3rd Quarter 4th Quarter Year
8,000 5,000 26,000
0.5 0.5 0.5
4,000 2,500 13,000
12 12 12
48,000 30,000 156,000
P8.16
1. The schedule of expected cash collections for September
September
Cash beginning 7,400
July 3,600
August 21,000
September 4,000
Total cash collections 36,000
2. The schedule of expected cash disbursements for inventory purchases for September
September
Accounts payble beginning
July
August 16,000
September 5,000
Total cash disbursements 21,000
3. The cash budget for September
September
Cash beginning 9,000
Add: Receipts
Collections from customers 36,000
Total cash available 45,000
Less: Disbursements
Direct Materials
Direct Labor 21,000
Manufacturing Overhead
Selling and administrative Expenses 9,000
Equipment purchase 18,000
Dividends 3,000
Total cash disbursements 51,000
Excess (deficiency) of cash available over disbursement (6,000)
Financing
Borrowings 11,000
Repayments
Interest
Total financing 11,000
Cash ending 5,000
s for September
P8.17
1. The schedule of expected cash collections
July August September
Sales 40,000 70,000 50,000
Cash sales 8,000 14,000 10,000
Credit sales
May 4,800
June 20,160 5,760
July 3,200 22,400 6,400
August 5,600 39,200
September 4,000
Total cash collections 36,160 47,760 59,600
2.a Merchanise purchases budget
July August September
Budgeted cost of sales 24,000 42,000 30,000
Add: desired ending inventory 31,500 22,500 20,250
Total needs 55,500 64,500 50,250
Less: beginning inventory 18,000 31,500 22,500
Required purchase 37,500 33,000 27,750
b. The schedule of expected cash disbursements for merchanise purchases
July August September
Accounts payble beginning 11,700
July 18,750 18,750
August 16,500 16,500
September 13,875
Total cash disbursements 30,450 35,250 30,375
3. The cash budget
July August September
Cash beginning 8,000 8,410 8,020
Add: Receipts
Collections from customers 36,160 47,760 59,600
Total cash available 44,160 56,170 67,620
Less: Disbursements
Inventory purchase 30,450 35,250 30,375
Land costing 4,500
Selling and administrative Expenses 10,800 16,900 12,600
Dividends 1,000
Total cash disbursements 45,750 52,150 43,975
Excess (deficiency) of cash available over disbursement (1,590) 4,020 23,645
Financing
Borrowings 10,000 4,000
Repayments (14000)
Interest (380)
Total financing 10,000 4,000 (14,380)
Cash ending 8,410 8,020 9,265
*Borrowings = 10,000 because the company must maintain a cash balance of at least 8,000 at the en
Quarter
45,000
32,000
4,800
25,920
32,000
44,800
4,000
143,520
Quarter
96,000
20,250
116,250
18,000
98,250
1
Quarter
11,700
37,500
33,000
13,875
96,075
Quarter
8,000
143,520
151,520
96,075
4,500
40,300
1,000
141,875
9,645
14,000
(14000)
(380)
(380)
9,265
least 8,000 at the end of each month and a local bank allows to borrown in increments of 1,000.
