Cost Accounting

1) Esco, a local retail establishment, expects to make inventory purchases as follows for the first quarter of 2016: January, $7,000; February, $8,400; and March, $10,000. Prior experience shows that 25% of a given months purchases are paid in the month of purchase with the balance paid in the following month. No purchase discounts apply.

What is the total expected cash disbursement for February? For March?

2) Easy Clean operates a chain of dry cleaners. It is experimenting with a continuous-improvement (i.e., kaizen) budget for operating expenses. Currently, a typical location has operating expenses of $26,000 per month. Plans are in place to achieve labor and utility savings. The associated operational changes are estimated to reduce monthly operating costs by a factor of 0.99 beginning in January.

What is the estimated operating cost for January? For June? For December? (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)