+1-415-670-9189
info@expertsmind.com
Prepare the budgets and schedules
Course:- Finance Basics
Reference No.:- EM131298446




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Finance Basics

Cryon Corporation manufactures and sells a seasonal product that has a peak in sales in the third quarter. The following information reflects projections for Year 2 - the coming year - and the first quarter of Year 3.

Units sell at $10 each. Budgeted sales for the next 5 quarters are outlined below.

Year 2 Quarter           Year 3
1    2    3    4    1
50,000    70,000    120,000    70,000    60,000

Sales are collected in the following pattern: 75% are collected in the quarter the sales are made, and the remaining 25% are collected in the following quarter. On January 1, Year 2, the company had accounts receivable of $65,000, all of which will be collected in the first quarter of Year 2. Bad debts are negligible and can be ignored.

The company desires finished goods inventory at the end of each quarter equal to 30% of the budgeted unit sales for the next quarter. On December 31, Year 1, the company had 15,000 completed units on hand.

Five pounds of raw materials inventory is required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 38,000 pounds of raw material on hand.

Raw material cost is $0.80 per pound.

Required:

Prepare the following budgets and schedules for Year 2, showing quarterly figures:

Sales budget

Schedule of expected cash collections

Production budget

Direct materials budget that summarizes both pounds and dollars.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Bond 3 has a coupon rate of 0.0400, a face value of $10,000, for 20 years, pays dividends on a semi-annual basis, and a required yield (YTM) of 0.0450.  What is the bonds va
How does a company issue a bond? and what type of bond is the best one to issue? Is Beta Coefficient still a valid measure? How do you valuate a companies worth? Do Market Bub
Company A purchases obsolete inventory and re-sells it on-line. Company A learns that Company B is selling some obsolete inventory for $100,000. Supposing interest rates rema
Discuss corporate duties and corporate responsibilities and explain the role the healthcare organization has in ensuring the compliance of corporate duties and responsibilit
A lottery claims its grand prize is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately, what is this grand prize really worth? U
Assuming implied forward rates are the best estimates of future one-year rates, how many years before you can expect to pay cash for a used car if you invest in successive o
Indicate in which order the following claims would be settled when distributing the proceeds from liquidating a bankrupt firm: Claims of preferred stockholders;  Claims of sec
The exchange rates in New York for $1 are C$1.2675 and £0.6882. A dealer is offering the following quote: C$1 will buy £0.8722. What is the profit you can earn on $19,632 us