Arcor, a retailer, started operations on January 1. On that date, the only assets were $16,000 in cash and $3,500 in merchandise inventory. For purposes
Arcor, a retailer, started operations on January 1. On that date, the only assets were $16,000 in cash and $3,500 in merchandise inventory. For purposes of budget preparation, assume that the company's cost of goods sold is 60% of sales. Expected sales for the first four months appear below:
Expected Sales
January $10,000
February 20,000
March 15,000
April 25,000
The company desires that the merchandise inventory on hand at the end of each month be equal to 50% of the next month's merchandise sales (stated at cost). All purchases of merchandise inventory must be paid in the month of purchase. Sixty percent of all sales should be for cash; the balance will be on credit. Seventy-five percent of the credit sales should be collected in the month following the month of sale, with the balance collected in the following month. Variable operating expenses should be 10% of sales, and fixed expenses (all depreciation) should be $3,000 per month. Cash payments for the variable operating expenses are made during the month the expenses are incurred.
In a budget of cash disbursements for March, what would be the total cash disbursements?
$11,200.
$13,900.
$16,900.
$13,500.
2) Information on the actual sales and inventory purchases of the Aricent Company for the first quarter follow:
Information on the actual sales and inventory purchases of the Aricent Company for the rst quarter follow: Invenmrysmes $120,000 $60,000 100,000 78,000 120,000 90,000 Collections from Aricent Company's customers are normally 60% in the month of sale, 30% in the montl following sale, and 8% in the second month following sale. The balance is uncollectible. Aricent Company take: full advantage ofthe 2% discount allowed on purchases paid for by the end of the following month. The company expects sales in April of $150,000 and inventory purchases of $100,000. Operating expenses f0I the month of April are expected to be $38,000, of which $15,000 is salaries and $15,000 is depreciation. The remaining operating expenses are variable with respect to the amount of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Aricent Company's cash balance or March 1 was $43,000, and on April 1 remained at $43,000. What would be the expected cash balance on April 30? 0 $19,700. 0 $28,700. 0 $54,700. 0 $65,800. The Artis Company has obtained the following sales forecast data: Cash Sales $80,000 $70,000 $50,000 $60,000 Credit Sales 240,000 220,000 170,000 200,000 The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. What are the budgeted cash receipts for October? 0 $188,000. 0 $226,000. 0 $248,000. 0 $241,000. The ASDA Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: Labour rate variance $7,000 favourable Labour efficiency variance $12,000 favourable Variable overhead efficiency variance $4,000 favourable Number of units produced 10,000 Standard labour rate per direct labour hour $12 Standard variable overhead rate per direct labour hour $4 Actual labour hours used 12,000 Actual variable manufacturing overhead costs $58,290 What are the standard hours allowed to make one unit of finished product? O 1.0 hours. O 1.3 hours. O 1.5 hours. O 2.0 hours.Blizzard Company needs 20,000 units of a certain part to use in one of its products. The following information is available: Cost to Blizzard to make the part: Direct Materials Direct Labour m Variable Manufacturing Overhead _ Fixed Manufacturing Overhead = Cost to buy the part from the Pose Company: E Pose Company has offered to sell this part to Blizzard Company for $36 each. If Blizzard were to buy the part from Pose instead of making it, Blizzard would not have any use for the released capacity. In addition. 50% of the fixed manufacturing overhead costs would continue regardless of what decision is made. Assume that direct labour is an avoidable cost in this decision. In deciding whether to make or buy the part, what would be the total relevant costs to make the part? 0 $560,000. 0 $640,000. 0 $720,000. 0 $660,000
