Crane Company is preparing a cash summary budget using the data below. They have already prepared their cash receipts and cash payments budget so that data is provided: October November Beginning Cash Balance $16000 Expected Cash Receipts $63000 $95000 Expected Cash Payments $45000 $76000 Management always wants to maintain a $40,953 minimum cash balance at the end of every month. If there is an expected cash shortfall in the budget they will be proactive and borrow money at the first day of the month. That way they will not risk having too low of a balance during the month. They can borrow any amount of money needed. They may not pay loans back in installments. They have to pay them back all at once. The interest rate is 12%. Assume if they pay back money, they pay it back on the last day of the month. What is the ending cash balance for November after all loan repayments of principle and interest? Round your answer to the nearest whole dollar. What if Clapton Company in Example 9-1 changed their desired ending inventory level to equal 17% of next quarter's budgeted sales instead of 20%. How many budgeted units would be produced in the 3rd quarter (July - September)? Round your answer to the nearest whole unit. ACG 2071 Class Examples - Chapter 9 Master Budgeting Example #1 PRODUCTION BUDGET Clapton Company's sales budget shows the following projections for the year ending December 31, 2017: Quarters First (Jan - March) Second (April - June) Third (July - Sept) Fourth (Oct - Dec) Total Guitars 30,000 40,000 22,500 27,500 120,000 - First Quarter 2018 34,500 Inventory at December 31, 2016 was budgeted at 6000 guitars. The quantity of finished goods inventory at the end of each quarter is to equal 20 percent of the next quarter's budgeted unit sales. How much should the production budget show for units to be produced for each quarter in 2017? Example #2 DIRECT MATERIALS PURCHASES BUDGET Cobb Co. budgets sales of Product A at 200,000 units for October. Production of one unit of Product A requires two gallons of Material z. Actual beginning inventories and budgeted ending inventories for the month are as follows: Product A Material z October 1 25,000 units 16,000 gallons October 31 8,000 units 21,000 gallons Compute the number of gallons of Material Z the company needs to purchase during October