Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $190 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3. First 96,000 Year 2 Second Third 126,000 186,000 Fourth 136,000 Budgeted production, in bottles 106,000 Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 76.800 grams of musk oil will be on hand to start the first quarter of Year 2 Required: Prepare a direct materials budget for muskoll, by quarter and in total for Year 2 decimal places.) (Round "Unit cost of raw materials" answers to Mink Caress Direct Materials Budget - Year 2 You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following Information is available about the company's operations a The cash balance on December 1 is $58,600 b. Actual sales for October and November and expected sales for December are as follows: Cash Sales Sales on account October November December $ 73,200 $ 78,00 $ 92.000 $ 485,000 $568,000 $663, cee Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 29 is uncollectible c. Purchases of inventory will total $316,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $162.000, all of which will be paid in December d Selling and administrative expenses are budgeted at $514,000 for December of this amount, $52.000 is for depreciation A new web server for the Marketing Department costing $117.500 will be purchased for cash during December, and dividends Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $316,000 for December Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $162,000, all of which will be paid in December d Selling and administrative expenses are budgeted at $514,000 for December of this amount, $52,000 is for depreciation e. A new web server for the Marketing Department costing $117,500 will be purchased for cash during December, and dividends totaling $12,500 will be paid during the month 1 The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to increase its cash balance as needed Required: 1. Calculate the expected cash collections for December 2. Calculate the expected cash disbursements for merchandise purchases for December 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month Assume that any interest will not be paid until the following month
