Question
Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows: April May June Sales 55,000 47,000
Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows:
April | May | June | |
Sales | 55,000 | 47,000 | 65,000 |
Production | 62,500 | 52,500 | 52,500 |
|
Cash-related production costs are budgeted at $5.5 per unit produced. Of these production costs, 30% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $150,000 per month. The accounts payable balance on March 31 totals $240,000, which will be paid in April. All units are sold on account for $14.5 each. Cash collections from sales are budgeted at 65% in the month of sale, 25% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $555,000 ($95,000 from February's sales and $460,000 from Marchs sales).
Required:
a. . Prepare a schedule for each month showing budgeted cash disbursements for Clay Corporation. (Round your final answer to nearest whole dollar.)
b. Prepare a schedule for each month showing budgeted cash receipts for Clay Corporation. (Round your final answer to nearest whole dollar.)
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