Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Guidance Corp is preparing its Master Budget for 2 0 XX . You need to prepare Guidance s Direct Materials Budget and Schedule of Cash

Guidance Corp is preparing its Master Budget for 20XX. You need to prepare Guidances Direct
Materials Budget and Schedule of Cash Disbursements for Materials Purchases on the excel template
provided and create a function that allows management to enter a month and get amount of materials
purchased and cash spent for that month.
The given information is already input into the spreadsheet.
REQUIRED
1. PREPARE A DIRECT MATERIALS BUDGET (7 POINTS)
Prepare the Direct Materials Budget for the first three months of Guidances fiscal year
(January, February, and March), along with the full quarter.
Relevant information
Required Production
o January =90,000 units
o February =70,000 units
o March =125,000 units
o April =130,000 units
Pounds of materials needed per unit =3 pounds
Beginning raw materials inventory on January 1,20XX =50,000 pounds.
Percentage of the following months production used to determine desired ending
inventory =20%
Raw materials cost per pound = $2.5 per pound
2. PREPARE A SCHEDULE OF CASH PAYMENTS FOR RAW MATERIALS (8 POINTS)
Prepare the Schedule of Cash Payments for the first three months of Guidances fiscal year
(January, February, and March) and for the quarter, using the template in the Excel spreadsheet.
HINT: cost of raw materials that Guidance is paying for comes from the last line of your direct
materials budget.
Guidances payment schedule:
o 20% of purchases are paid for in the month of purchase
o 65% are paid for in the month after purchase
o 15% are paid for in the second month after purchase
Beginning accounts payable = $600,000. Assume 75% of the accounts payable will be paid
in January and 25% in February.
Check Figures
Because this problem has several areas that frequently pose problems for students, check figures are
provided to give you feedback as to whether your budget/schedule has errors.
January February March Quarter
Cost of raw materials to be purchased $655,000 $607,500 $945,000 $2,207,500
Total Cash Disbursements for Materials $581,00 $697,250 $682,125 $1,960,375

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Accounting Finance And Auditing For Lawyers

Authors: Lawrence Cunningham

7th Edition

1634604105, 9781634604109

More Books

Students also viewed these Accounting questions

Question

Describe the key uses of CPM and Gantt charts.

Answered: 1 week ago

Question

8. Describe the main retirement benefits.

Answered: 1 week ago