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General Manufacturing expects to have 52,000 pounds of raw materials inventory on hand on June 30, the end of the current year. The company has budgeted the following production for the first four months of the coming year: Production (units) July 112,000 August 132,000 September 162,000 October 122,000 General Manufacturing desires each month's ending raw materials inventory to be 20% of the following month's production needs. A finished unit requires two pounds of raw materials. General Manufacturing's budgeted purchases of raw materials during July (in lbs.) should be: Multiple Choice 276,800 lbs. O 329,600 lbs. 52,800 lbs. O 224,800 lbs. 224,000 lbs. Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March Actual credit sales for April Estimated credit sales for May Estimated collections in the month of sale Estimated collections in the first month after the month of sale Estimated collections in the second month after the month of sale Estimated provision for bad debts (made in the month of sale) $ 130,000 $160,000 $ 210,000 25% 60% 10% 5% The firm writes off all uncollectible accounts at the end of the second month after the month of sale. Required: Determine for Papst Company for the month of May: 1. The estimated cash receipts from accounts receivable collections. 2. The gross amount of accounts receivable at the end of the month (after appropriate write-off of uncollectible accounts). 3. The net amount of accounts receivable at the end of the month. 4. Recalculate requirements 1 and 2 under the assumption that estimated collections in the month of sale equal 60% and in first month following the month of sale equal 25%. 1. Estimated cash receipts 2. Gross accounts receivable 3. Net accounts receivable 4a. Estimated cash receipts 46. Gross accounts receivable Doanne Food Processing expects to have 40,000 pounds of raw materials inventory on hand on March 31, the end of the current year. The company budgets the following production (in units) for April through July, inclusive: April May June July 124,000 134,000 147,000 124,000 At the end of each month the firm desires its ending raw material inventory to be 10% of the next month's production needs. Each finished unit requires four pounds of raw materials. Doanne's budgeted purchases (in pounds) of raw materials for June would be: Multiple Choice 0 597,200 637,600 0 578,800 0 588,000
