9.9 9.10 now u they participater What is a self-imposed budget? What are the major advantages of self-imposed budgets? What caution must be exercised in their use? w can budgeting assist a company in planning its workforce staffing levels? "The principal the principal purpose of the cash budget is to see how much cash the company will have in the bank at the end of the year." Do you agree? Explain. . Exercises EXERCISE 9-1 Schedule of Expected Cash Collections (L02 Peak sales for Midwest Products, a wholesale distributor of leaf rakes. occur in August. The com ny's sales budget for the third quarter showing these peak sales is given below: Budgeted sales call on account at $600.000 $800,00018509,000 $2.000.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70%-are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $430,000, and June sales totaled $540,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third SHOES quarter. 2. Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date. 1 Chapter 9 C EXERCISE 9 Production Budget 2013 al Telince has been the sales of its invative mode p follows e over the set for 4 July August Sepertber. October 30.000 5.000 60.000 50.000 The company is now in the process of preparing a production budget for the third quarter past experi ence has shown that of this entries of finished goodsust equal 105 of the mona's sales. The story at the end of me was 3.000 units Prepare a production budget for the third quarter showing the number of units to be produced each month and for the actor in total EXERCISE 9-1Direct Materials Budget 104 Micro Products In has developed a very powerful electronic calculator. Each calculator requires throt small chips that cost $2 each and are purchased from an overseas supplier. Micro Products has prepared a petition budget for the calculator by quarters for Year 2 and for the first quarter of Year 3 as shown below) The chip used in production of the calculator is sometimes hard to get so it is necessary to carry arge inventoncs at a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter toust be equal to 20% of the following quarter's production Deeds. Some 36.000 chips will be on bind to start the first quarter of Year 2 Segured beterg Pres e t Caterial badpet for chip, by quaternitat for Year 2 At the bottom of your todeto Deta i l of purchases for each quarter and for rental EXERCISE 9. Direct Labor Budget (105) The Production Depar t he Riverside Plant of Juan Corporation is bitted the following forecast funt p r ofaced at the plant for each quarter of the upcoming fiscal yel the plant Produces lugheit becue grills SOLO the intreguet direct labor hours and direct labop bour work Greu Continet the company direct labor budget for the upcoming feat yearuming that the di rector Wil d stedeach quarter to match the number Bours Tequired to produce the forecasted number of its produced Construct the compus direct labor bodget for the upcoming fiscal year, framing that the di octor Workforce adjusted cach quarter, Instead assume that de cropany direct labor sonore cosef permanent employees who are guaranteed to be paid for at least 1,800 hours of to ch uiter: If the number of required direct labor-hours is less that this number the wo ld for 1.800 hours anyway. Any hours worked in ett 800 hours in a quarter af padat die rate of 1.5 times the normal hourly rate for direct labor