1.

CristoffCorporation, a merchandising company, has provided the following budget data:

	Inventory Purchases	Sales
January	$42,000	$72,000
February	$48,000	$66,000
March	$36,000	$60,000
April	$54,000	$78,000
May	$60,000	$66,000

• Collections from customers are normally 70% in the month of sale and 30% in the month following the sale.
• Cristoffpays for inventory purchases in the month following the purchase.
• Cristoffpaid cash dividends of $10,000 during February.
• Operating expenses requiring cash are paid in the month they are incurred. Operating expenses are expected to be $14,400 for February. The $14,400 includes $7,000 of depreciation expense.
• Cristoff's cash balance at February 1 was $22,000

A. Compute the expected cash collections during February.

B. Compute the expected cash balance at the end of February. Show each item you are including.

Show both answers clearlylableledthen show your work below that.

2.

Hannohad the following static budget for March, when it expected to sell 4,000 sandwiches:

Sales revenue	$ 48,000
Variablecosts	$ 28,000
Fixed costs	$ 5,000
Net income	$15,000

Hannoactually sold 5,000 sandwichesduring March at $12 each. Variable costs were $37,500 and fixed costs were $4,800.

A. Prepare a flexiblebudget at for March that will helpHannoseparate thevolume variancefrom the flexible budget variance. Make your income statement match my formatand compute net income.

B. What is the volume variance for variablecosts?

C.What is the flexible budget variance forvariablecosts?