How can create a schedule for each month

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Question - Carter Company has projected sales and production in units for the second quarter of next year as follows:

 

April

May

June

Sales

60,000

40,000

50,000

Production

50,000

50,000

60,000

How to solve for the following:

a. Cash production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all of which are paid in cash) amount to $120,000 per month. The accounts payable balance on March 31 totals $192,000, all of which will be paid in April.

How can create a schedule for each month showing budgeted cash disbursements for Carter Company?

b. Assume that all units will be sold on account for $15 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on March 31 totaled $510,000 $(90,000 from February's sales and the remainder from March). How can create a schedule for each month showing budgeted cash receipts for Carter Company.?

Reference no: EM132547891

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