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Danner Company expects to have a cash balance of $58,410 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017
Danner Company expects to have a cash balance of $58,410 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows.
Collections from customers: January $110,330, February $194,700. |
Payments for direct materials: January $64,900, February $97,350. |
Direct labor: January $38,940, February $58,410. Wages are paid in the month they are incurred. |
Manufacturing overhead: January $27,258, February $32,450. These costs include depreciation of $1,947 per month. All other overhead costs are paid as incurred. |
Selling and administrative expenses: January $19,470, February $25,960. These costs are exclusive of depreciation. They are paid as incurred. |
Sales of marketable securities in January are expected to realize $15,576 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $32,450. The company wants to maintain a minimum monthly cash balance of $25,960. Prepare a cash budget for January and February.
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