Question
Built-Tight is preparing its master budget for the quarter ended September 30, 2017. Budgeted sales and cash payments for product costs for the quarter follow:
Built-Tight is preparing its master budget for the quarter ended September 30, 2017. Budgeted sales and cash payments for product costs for the quarter follow:
Sales are 30% cash and 70% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash; $46,000 in accounts receivable; $5,500 in accounts payable; and a $6,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($5,000 per month), and rent ($7,500 per month).
July August September $59,000 $75,000 $53,000 Budgeted sales Budgeted cash payments for Direct materials Direct labor Factory overhead ? 17,160 5,040 21, 200 14.440 4,360 17,800 14,760 14.440 18,200
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