Reference no: EM131798979

Question - Estimate Sales Revenues

SVI is a large securities dealer. Last year, the company made 150,000 trades with an average commission of $60. Because of the general economic climate, SVI expects trade volume to decline by 15 percent. In addition, employees at a local manufacturing plant have historically constituted 10 percent of SVI's volume. The plant just closed and all employees have closed their accounts.   

Offsetting these factors is the observation that the average commission per trade is likely to increase by 15 percent because trades are expected to be larger in the coming year.

Estimate SVI's commission revenues for the coming year.

Question - Estimate production Levels

Hoffman Corporation has just made its sales forecasts and its marketing department estimates that the company will sell 72,000 units during the coming year. In the past, management has maintained inventories of finished goods at approximately one month's sales. The inventory at the start of the budget period is 3,900 units. Sales occur evenly throughout the year.

Estimate the production level required for the coming year to meet these objectives.

Question - Estimate Cash Disbursements

Ashland Corporation, a merchandising firm, is preparing its cash budget for October. The following information is available concerning its inventories.

Inventories at beginning of October                                           $135,000

Estimated purchases for October                                               660,000

Estimated costs of goods sold for October                                  675,000

Estimated payments in October for Purchases in Sept.                165,000

Estimated payments in October for purchases prior to Sept.        30,000

Estimated payment in October for purchases in October              70%

What are the estimated cash disbursements in October?