Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bestco Company is a manufacturer and seller of specialty good. Information on actual and projected sales in units is given below for the Use this

Bestco Company is a manufacturer and seller of specialty good. Information on actual and projected sales in units is given below for the Use this information to answer all parts of question one.
Month Units
June 2017 (actual)30,000
July 2017 (budget)35,000
August 2017 (budget)50,000
September 2017 (budget)60,000
October 2017 (budget)65,000
November 2017 (budget)70,000
Required:
1. Prepare a sales budget in units and dirham for July, August and September. The selling price per unit is AED 18.
2. Assume that the company collects 55% of its sales in the month of the sale, 45% in the month following the sale. Prepare a Cash Receipts schedule for July, August and September. Accounts Receivable balance as of June 29 was 230,000 dh.
3. Refer to the projected sales that you have calculated. Prepare a Production Budget for July, August and September. The companys inventory at the end of each month must equal 25% of next months sales. June 30 ending inventory was 11,000 units.
4. Prepare a Direct Materials Purchase Budget for July, August and September based on the production budget above. One unit of product requires 8 ounces of materials and the companys policy is to maintain an ending inventory of materials equal to 25% of next months production needs. Each pound of direct materials cost 1.50 dh.
5. Assuming that the companys policy is to pay 60% of each months cost of materials purchases in the same month and 40% in the month after, prepare a Cash Disbursement (cash payment) budget for July, August and September. The accounts payable balance at the end of June was AED 220,000 and is to be paid in full in July.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Comparative International Accounting

Authors: Christopher Nobes, Robert B Parker

12th Edition

0273763792, 978-0273763796

More Books

Students also viewed these Accounting questions

Question

=+What is the brand's character or personality?

Answered: 1 week ago