Quarterly cash payments budget, Financial Accounting

Assignment Help:

Emily Jackson, RSC Designs management accountant, is in charge of preparing the master budget for 2013.  She has gathered the following information:

1. Annual profit for the 2012/2013 financial year is expected to be the sum of  each group members RMIT student number.  The split (anticipated sales mix)  between SML Sculptures and LGE Sculptures is for every 3 LGE sculptures sold 2 SML Sculptures will be sold.  Forty percent (40%) of the total sales (of each product) will occur in the first 6 months of the financial year and the remaining sixty percent (60%) will occur in the remaining six months. 

Expected sales for the final quarter of 2012 are expected to be 15,000 units of the SML Sculptures and 23,000 of the LGE Sculptures.

2. RSC Designs' sales history indicates that 40 percent of all sales are on credit, with the remainder of the sales being on a cash basis.  The company's collection experience shows that 60 percent of the credit sales are collected during the quarter in which the sale is made, while the remaining 40 percent is collected in the following quarter.  (For simplicity, assume the company is able to collect 100 percent of its accounts receivable.)

3. The SML sculpture has a selling price of $45 per unit, and the LGE sculpture has a selling price of $75 per unit.  These prices are expected to hold constant throughout the 2012/2013 financial year.  

4. The production manager attempts to end each quarter with enough finished - goods inventory in each product line to cover 20 percent of the following  quarter's sales.  Moreover, an attempt is made to end each quarter with 20 percent of the glass sheets needed for the following quarter's production.  As the metal strips are purchased locally the company buys them on a just-in-time
basis, and as a result the inventory is negligible.

5. All direct material purchases are made on credit, with 80 percent of each quarter's credit purchases being paid in cash during the same quarter as the purchase.  The remaining 20 percent is paid in the next quarter.

6. Indirect materials are purchased on a cash basis as needed.  Work-in-process is negligible.


Related Discussions:- Quarterly cash payments budget

Explain methods of calculating depreciation, The financial year of Jack and...

The financial year of Jack and Jill Ltd will end on 31 May 2008. At 1 June 2007, the company had in use equipment with a total accumulated cost of Rs 135,620 which had been depreci

CONSIGNMENT, AskA of Surat consign goods to B of Jaipur to be sold at or ab...

AskA of Surat consign goods to B of Jaipur to be sold at or above invoice price. B is entiled to get a commission of 8% on sales at invoice price plus 25% of any surplus price real

Determine the evidence on the usefulness of accounting, Evidence on the use...

Evidence on the usefulness of accounting There are convincing evidence and arguments that accounting information is at least perceived as being useful to users. Various researc

Auditing., assess the risk of material misstatement at assertion level

assess the risk of material misstatement at assertion level

What is capital expenditure, Calculat capital expenditure, How to define Ca...

Calculat capital expenditure, How to define Capital expenditure This is kind of expenditure on fixed assets like as plant or equipment, the cost of which is spread over several

Explain why the operating cycle, The Operating Cycle Two Wheeler Cycle Shop...

The Operating Cycle Two Wheeler Cycle Shop buys all of its bikes from one manufacturer, Baxter Bikes. On average, bikes are on hand for 45 days before Two Wheeler sells them. The c

Discounted cash flow, XYZ Inc., an Ontario-based company on the cutting edg...

XYZ Inc., an Ontario-based company on the cutting edge of technology, is analyzing the possibility of providing university-level courses for York University. This virtual universit

Compositions and schemes of arrangement, COMPOSITIONS AND SCHEMES OF ARRANG...

COMPOSITIONS AND SCHEMES OF ARRANGEMENT The debtor may lodge a written proposal with the Official Receiver for a composition or other arrangement of his affairs within four day

Coupon interest rate , Simon Corporation's bonds have 12 years left over to...

Simon Corporation's bonds have 12 years left over to maturity. Interest is paid yearly, the bonds have a $1,000 par value, and the coupon interest rate is 11.5%. The bonds have a y

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd