How much will quagmire pay for purchases in may

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Reference no: EM131821642

Assignment

Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June:

Sales Budget


April

May

June

Total

Sales in units

13000

16500

14500

44000

Selling price per unit

x $40

x $40

x $40


Sales revenue

$520000

$660000

$580000

$1760000

All of the sales are on credit. 
Quagmire collects from customers as follows:

40% of sales in the month of sale 
35% in the month following the sale, and 
25% in the second month following the sale.

Cash receipts budget


April

May

June

Total

Collect from current sales

208000

264000

232000

704000

Collect from last month

210000

182000

231000

623000

Collect from 2 mos. Prior

140000

150000

130000

420000

Cash receipts

$ 558000

$ 596000

$ 593000

$ 1747000

Quagmire expects cost of goods sold to be 60% of sales.

They keep 20% of next months expected cost of goods sold in ending inventory. Below are budgeted purchases of inventory.
All purchases are paid for in the SAME month as the purchase.

Purchases Budget

 

April

May

June

Total

Budgeted cost of goods sold

312000

396000

348000

1056000

plus desired ending inventory

79200

69600

57600

57600

Total needs

391200

465600

405600

1113600

less beginning inventory

(62400)

(79200)

(69600)

(62400)

Cost of purchases

328800

386400

336000

1051200

Below is the budget for variable and fixed selling and administrative expenses.
Selling and admin expenses are paid in the month AFTER they are incurred.
Fixed expenses include depreciation of 36000 each month.

Sales and Admin Budget


April

May

June

Total

Variable S&A expenses

52000

66000

58000

176000

Fixed S&A (including depreciation)

180000

180000

180000

540000

How much will Quagmire pay (in cash) for purchases in May?
How much does Quagmire pay for variable S&A expenses in May?
How much does Quagmire pay for fixed S&A expenses in May?

Reference no: EM131821642

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