e) Assume April sales are projected to be $259,200. Credit collections are 15% two months following the sale, 45% in the month following the sale and 35% in the month of sale. The remaining 5% is expected to be uncollectible. f) Calculate the Cost of Goods Sold and the Gross Profit assuming that, i. manufacturing cost pe unit is $10 and, ii. the management sets its prices to achieve an overall 45% gross profit. Management would like to maintain an ending inventory equal to 10% of the next months Cost of Goods Sold. The December 31 balance is 10% of Januarys Cost of Goods Sold.

1) The Top Shop Company produces T-shirts. Each T-shirt requires 1.30 m of fabric, which company obtains at a cost of $5 per meter. The company sells the T-shirts for $12 per T-shirt. The Company would like to maintain an ending stock of fabric equal to 10% of the next months requirements. The company would also like to maintain an ending stock of finished T-shirts equal to 20% of the next months sales. Sales (in units) are projected to be as follows for the first three months of the year:

Month January February March 1st Quarter Unit Sales 7,200 11,600 17,600 ?

Requirements: Prepare the following budgets for the first three months of the year, as well as a summary budget for the quarter: a) Prepare the sales budget, including a separate section that details the type of sales made. For this section, assume that 10% of the companys T-shirts are cash sales, while the remaining 90% are sold on credit terms. b) Prepare the production budget. Assume that the company anticipates selling 21,600 units in April. c) Prepare the direct materials purchases budget. Assume the company needs 20,800 m of fabric for production in April. d) Prepare the direct labour budget for the first three months of the year. Assume that each T-shirt requires 0.50 of an hour. Direct labourers are paid $25 per hour. e) Assume April sales are projected to be $259,200. Credit collections are 15% two months following the sale, 45% in the month following the sale and 35% in the month of sale. The remaining 5% is expected to be uncollectible. f) Calculate the Cost of Goods Sold and the Gross Profit assuming that, i. manufacturing cost pe unit is $10 and, ii. the management sets its prices to achieve an overall 45% gross profit. Management would like to maintain an ending inventory equal to 10% of the next months Cost of Goods Sold. The December 31 balance is 10% of Januarys Cost of Goods Sold.

1) The Top Shop Company produces T-shirts. Each T-shirt requires 1.30 m of fabric, which company obtains at a cost of $5 per meter. The company sells the T-shirts for $12 per T-shirt. The Company would like to maintain an ending stock of fabric equal to 10% of the next months requirements. The company would also like to maintain an ending stock of finished T-shirts equal to 20% of the next months sales. Sales (in units) are projected to be as follows for the first three months of the year:

Month January February March 1st Quarter Unit Sales 7,200 11,600 17,600 ?

Requirements: Prepare the following budgets for the first three months of the year, as well as a summary budget for the quarter: a) Prepare the sales budget, including a separate section that details the type of sales made. For this section, assume that 10% of the companys T-shirts are cash sales, while the remaining 90% are sold on credit terms. b) Prepare the production budget. Assume that the company anticipates selling 21,600 units in April. c) Prepare the direct materials purchases budget. Assume the company needs 20,800 m of fabric for production in April. d) Prepare the direct labour budget for the first three months of the year. Assume that each T-shirt requires 0.50 of an hour. Direct labourers are paid $25 per hour. e) Assume April sales are projected to be $259,200. Credit collections are 15% two months following the sale, 45% in the month following the sale and 35% in the month of sale. The remaining 5% is expected to be uncollectible. f) Calculate the Cost of Goods Sold and the Gross Profit assuming that, i. manufacturing cost pe unit is $10 and, ii. the management sets its prices to achieve an overall 45% gross profit. Management would like to maintain an ending inventory equal to 10% of the next months Cost of Goods Sold. The December 31 balance is 10% of Januarys Cost of Goods Sold.