Water Sport Inc. manufactures a small personal water tube used for children learning to swim. Management is now preparing detailedbudgets for the third quarter, July through September, and has assembled the following Information to assista. The Marketing Department has estimated sales as follows for the remainder of the year (number of water tubes):JulyAugustSeptember7,108 October5,680 November3,5003,1004,680December2,600The selling price of the water tubes is $60.b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:50%In the month of sale45%5%in the month following saleuncollectibleThe beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $163,000.c. The company maintains finished goods inventories equal to 20% of the following month's sales. The Inventory of finished goods onJuly 1 will be 1,420 units.d. Each water tube requires 3 kilograms of synthetic polyisoprene rubber compound. To prevent shortages, the company would likethe Inventory of synthetic rubber compound on hand at the end of each month to be equal to 20% of the following month'sproduction needs. The Inventory of synthetic rubber compound on hand on July 1 will be 4,080 kilograms.e. The synthetic rubber compound costs $4.00 per kilogram. Water Sport pays for 70% of its purchases In the month of purchase; theremainder is paid for in the following month. The accounts payable balance for synthetic rubber compound purchases will be$13,200 on July 1.Required:1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and collars.) Alsoprepare a schedule of expected cash collections, by month and in total, for the third quarterBalec budgetJulyAugustSeptemberQuarterBudgeted sales (units)Selling price per unitTotal budgeted sales

The Sales Budget is a budget that reports the estimated total number of units of finished goods to…

Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (units) Selling price per unit Total budgeted sales Balec budget July August Beptember Quarter

Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (units) Selling price per unit Total budgeted sales Balec budget July August Beptember Quarter

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 18E: Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It...

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Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.
Heavenly Chocolates manufactures and sells quality chocolate products at its plant and retail store located in Saratoga Springs, New York. Two years ago, the company developed a web site and began selling its products over the Internet. Web-site sales have exceeded the company’s expectations, and management is now considering strategies to increase sales even further. To learn more about the web-site customers, a sample of 50 Heavenly Chocolate transactions was selected from the previous month’s sales. Data showing the day of the week each transaction was made, the type of browser the customer used, the time spent on the web site, the number of web pages viewed, and the amount spent by each of the 50 customers are contained in the file named Heavenly Chocolates. A portion of the data is shown in the table that follows: Heavenly Chocolates would like to use the sample data to determine whether online shoppers who spend more time and view more pages also spend more money during their visit to the web site. The company would also like to investigate the effect that the day of the week and the type of browser have on sales. Managerial Report Use the methods of descriptive statistics to learn about the customers who visit the Heavenly Chocolates web site. Include the following in your report. Graphical and numerical summaries for the length of time the shopper spends on the web site, the number of pages viewed, and the mean amount spent per transaction. Discuss what you learn about Heavenly Chocolates’ online shoppers from these numerical summaries. Summarize the frequency, the total dollars spent, and the mean amount spent per transaction for each day of week. Discuss the observations you can make about Heavenly Chocolates’ business based on the day of the week? Summarize the frequency, the total dollars spent, and the mean amount spent per transaction for each type of browser. Discuss the observations you can make about Heavenly Chocolates’ business based on the type of browser? Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the time spent on the web site and the dollar amount spent. Use the horizontal axis for the time spent on the web site. Discuss your findings. Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the number of web pages viewed and the amount spent. Use the horizontal axis for the number of web pages viewed. Discuss your findings. Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the time spent on the web site and the number of pages viewed. Use the horizontal axis to represent the number of pages viewed. Discuss your findings.
FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick’s best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Flashkick requires ending inventory of product to equal 20% of the next month's unit sales. Beginning inventory in january was 9,000 practice soccer balls and 1,260 match soccer balls. Every practice ball requires 0.5 square yard of polyvinyl chloride panels, one bladder with valve (to fill air), and 3 ounces of glue. Flashkick's policy is that 20% of the following month's production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January…
Osborne Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows: The data from the table are as follows: # of planters to be sold January: 3,400 February: 3,800 March: 3,300 April: 4,900 May: 4,600. Inventory at the start of the year was 850 planters. The desired inventory of planters at the end of each month in the upcoming year should be equal to 25% of the following month’s budgeted sales. Each planter requires three pounds of polypropylene (a type of plastic). The company wants to have 20% of the polypropylene required for next month’s production on hand at the end of each month. The polypropylene costs $0.20 per pound. Requirements Prepare a production budget for each month in the first quarter of the year,…
Sara is considering whether to open a gadgets shop. She provided you, as a consultant, the following information: Sales of $60,000 and $72,000 are expected for July and August, respectively. All goods are sold on account. The collection pattern for Accounts Receivable is 80 percent in the month of sale and 20 percent in the month following the sale. Purchases of $40,000 and $54,000 are expected for July and August. The payment pattern for purchases is 70 percent in the month of purchase, 30 percent in the month following the purchase. Other monthly expenses are $8,000, which includes $2000 of depreciation. All operating expenses are paid in the month of their incurrence. $2,000 of cash is available on August 1, 2021. Required: Prepare the cash collection budget for the two months ending August 31, 2021 Prepare the cash budget for the two months ending August 31, 2021
Al-Noor Corporation assembles bicycles by purchasing frames, wheels, and other parts from various suppliers. Consider the following data: • The company plans to sell 25,000 bicycles during each month of the year's first quarter.• A review of the accounting records disclosed a finished-goods inventory of 1,400 bicycles on January 1 and an expected finished-goods inventory of 1,850 bicycles on January 31.• Al-Noor has 4,300 wheels in inventory on January 1, a level that is expected to drop by 5% at month-end.• Assembly time totals 30 minutes per bicycle, and workers are paid $14 per hour.• Al-Noor accounts for employee benefits as a component of direct labor cost. Pension and insurance costs average $2 per hour (total); additionally, the company pays Social Security taxes that amount to 8% of gross wages earned. Required: C. Compute Al-Noor's total direct labor cost for January. D. Briefly explain how the company's purchasing activity would affect the end-of-period balance sheet.
Al-Noor Corporation assembles bicycles by purchasing frames, wheels, and other parts from various suppliers. Consider the following data: • The company plans to sell 25,000 bicycles during each month of the year's first quarter.• A review of the accounting records disclosed a finished-goods inventory of 1,400 bicycles on January 1 and an expected finished-goods inventory of 1,850 bicycles on January 31.• Al-Noor has 4,300 wheels in inventory on January 1, a level that is expected to drop by 5% at month-end.• Assembly time totals 30 minutes per bicycle, and workers are paid $14 per hour.• Al-Noor accounts for employee benefits as a component of direct labor cost. Pension and insurance costs average $2 per hour (total); additionally, the company pays Social Security taxes that amount to 8% of gross wages earned. Required: A. How many bicycles does Al-Noor expect to produce (i.e., assemble) in January? B. How many wheels are budgeted to be purchased in January?
Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: Stuffed animals to be produced January. . . . 5,600 February. . . 4,800 March. . . . . 4,200 April. . . . . . 4,000 Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget.
In September, a light business bought $3600 worth of bulbs. At the beginning of September, the store had $1400 in lights on hand, and by the end of September, it projected to have $1600 in lamps on hand to meet a few of the planned November sales. What is the September planned cost of goods sold? $6600 $3400 $3800 $5000
Home Company will open a new store on January 1. Based on experience from its other retail outlets, Home Company is making the following sales projections:Cash SalesCredit SalesJanuary ...................$70,000$50,000February .................$40,000$60,000March .....................$50,000$70,000April .......................$50,000$90,000Home Company estimates that 80% of the credit sales will be collected in the month following the month of sale, with the balance collected in the second month following the month of sale. IV. Based on these data, the balance in accounts receivable on January 31 will be:V. The March 31 balance in accounts receivable will be: VI. In a cash budget for the month of April, the total cash receipts will be:
am Montana manufactures bookcases for colleges and universities to use in dorm rooms. Each bookcase sells for P65. Due to the cyclical nature of the business, the company budgets two months ahead. ln early May, it is planning for july, its busiest month, The company plans to sell 114,500 bookcases in july. At the end of june, it expects to have 26,000 assembled bookcases in inventory, and it would like to have 3,000 bookcases in inventory at the end of july. What is the company's budgeted sales revenue for july?
The following events occur during September: Webworks purchases supplies worth $120 on account. At the beginning of September, Webworks had 19 keyboards costing $100 each and 110 flash drives costing $10 each. Webworks has decided to use perpetual FIFO to cost its inventory. On account, Webworks purchases thirty keyboards for $105 each and fifty flash drives for $11 each. Webworks starts and completes five more Web sites and bills clients for $3,000. Webworks pays Nancy $500 for her work during the first three weeks of September. Webworks sells 40 keyboards for $6,000 and 120 flash drives for $2,400 cash. Webworks collects $2,500 in accounts receivable. Webworks pays off its salaries payable from August. Webworks pays off $5,500 of its accounts payable. Webworks pays off $5,000 of its outstanding note payable. Webworks pays Leon salary of $2,000. Webworks pays taxes of $795 in cash. Required: Prepare journal entries for the above events. Post the journal entries to T-accounts.…