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1 Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows: Sales Production April 58,000 64,000
1 Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows: Sales Production April 58,000 64,000 May 48,000 54,000 June 68,000 54,000 Required: a. Cash-related production costs are budgeted at $5.95 per unit produced. Of these production costs, 30% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $180,000 per month. The accounts payable balance on March 31 totals $270,000, which will be paid in April. Prepare a schedule for each month showing budgeted cash disbursements for Clay Corporation Production cos Cash disbursement Production cost this month Production costs prior mont Selling and administrative Total disbursements OSO b. Assume that all units are sold on account for $14.85 each. Cash collections from sales are budgeted at 65% in the month of sale, 25% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $588,000 ($98,000 from February's sales and $490,000 from March's sales) Prepare a schedule for each month showing budgeted cash receipts for Clay Corporation. (Do not round intermediate calculations.) Total sales Cash receipts: February sales March sales April sales Mary Sales June sales Total receipts $ 0 $ 0
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