Relevant data from operating budget

Assignment Help Business Management

Reference no: EM131021222

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:

January February

Sales$360,000 $400,000

Direct materials purchases120,000125,000

Direct labor90,000100,000

Manufacturing overhead70,00075,000

Selling and administrative expenses79,00085,000

All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the ?rst month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month.

Other data:

1. Credit sales:November 2013, $250,000; December 2013, $320,000.

2. Purchases of direct materials:December 2013, $100,000.

3. Other receipts:January-collection of December 31, 2013, notes receivable $15,000; February-proceeds from sale of securities $6,000.

4. Other disbursements: February-payment of $6,000 cash dividend.

The company's cash balance on January 1, 2014, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.

Instructions

(a) Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.

(b) Prepare a cash budget for January and February in columnar form.

Reference no: EM131021222

Questions Cloud

What other goals should have a higher priority : Should "marginally extend[ing] the lives of the very sick" be an important goal of a health care system? What other goals should have a higher priority? (Note: This question is basically a normative one without a definitive correct or incorrect an..

Risk management maturity stages : 1. What are the risk management maturity stages? 2. Name the five elements of an sustainable ERM programme?

Describe the role of patents as barriers to entry : Describe the role of patents as barriers to entry in the Pharmaceutical industry.

Are there other measures of quality of health care systems : Why do comparisons of health care outcomes across countries often concentrate on measures such as life expectancy and infant mortality? Are there other measures of the quality of health care systems? Briefly explain.

Relevant data from operating budget : Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:

What recommendations do you have for employees : Assume that Tom is willing to consider working 35 years instead of 30 years. What is your assessment of this strategy if Tom's goal is to have a portfolio worth $1,000,000?

What is the first level of moral development : Which level of moral development does Kohlberg call the "principled level"?

Is health care actually free to residents of united kingdom : According to an article in the Economist about the health care system in the United Kingdom: "A defining principle of the National Health Service is that it is ‘free at the point of delivery'." What does "free at the point of delivery" mean? Is he..

Cameroon corp manufactures and sells electric staplers for : Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of electric stapler sales budgeted for March should be:

User Account

All Pages