Budgeting Cash Flow The following various elements relate to Murphy, Inc.'s cash budget for October of the current year. For each item, determine the amount of cash that Murphy should receive or pay in October.

a. At $28 each, unit sales are 10,000 and 12,000 for September and October, respectively. Total sales are typically 30% for cash and 70% on credit; 40% of credit sales are collected in the month of sale, with the balance collected in the following month. Uncollectible accounts are negligible.

September sales	Answer
October cash sales	Answer
October credit sales	Answer
Cash collected in October	Answer

b. Merchandise purchases were $47,000 and $80,000 for September and October, respectively. Typically, 20% of total purchases are paid for in the month of purchase with a 5% cash discount. The balance of purchases is paid for (without discount) in the following month.

September purchases	Answer
October purchases	Answer
Cash paid in October	Answer

c. Fixed administrative expenses, which total $19,000 per month, are paid in the month incurred. Variable administrative expenses amount to 20% of total monthly sales revenue, 65% of which is paid in the month incurred, with the balance paid in the following month.

October fixed expenses	Answer
September variable expenses	Answer
October variables expenses	Answer
Cash paid in October	Answer

d. Fixed selling expenses, which total $4,200 per month, are paid in the month incurred. Variable selling expenses, which are 5% of total sales revenue, are paid in the month following their incurrence.

October fixed expenses	Answer
September variable expenses	Answer
Cash paid in October	Answer

Budget Preparation Reeves Company is preparing its master budget for July. Use the given estimates to determine the amounts necessary for each of the following requirements. (Estimates may be related to more than one requirement.)

a. What should total sales revenue be if territories A and B estimate sales of 14,000 and 20,000 units, respectively, and the unit selling price is $57?

$Answer

b. If the beginning finished goods inventory is an estimated 1,500 units and the desired ending inventory is 2,500 units, how many units should be produced?

Answer

c. What dollar amount of material should be purchased at $3 per pound if each unit of product requires 2 pounds and beginning and ending materials inventories should be 4,000 and 3,000 pounds, respectively?

$Answer

d. How much direct labor cost should be incurred if each unit produced requires 1.5 hours at an hourly rate of $20?

$Answer

e. How much manufacturing overhead should be incurred if fixed manufacturing overhead is $67,000 and variable manufacturing overhead is $1.50 per direct labor hour?

$Answer