Question
I have some of it done but it may not be correct...please help! The Denver Corporation has forecast the following sales for the first seven
I have some of it done but it may not be correct...please help!
The Denver Corporation has forecast the following sales for the first seven months of the year:
January | $ | 28,000 | May | $ | 28,000 |
February | 30,000 | June | 34,000 | ||
March | 32,000 | July | 36,000 | ||
April | 38,000 | ||||
Monthly material purchases are set equal to 30 percent of forecasted sales for the next month. Of the total material costs, 40 percent are paid in the month of purchase and 60 percent in the following month. Labor costs will run $5,800 per month, and fixed overhead is $11,000 per month. Interest payments on the debt will be $4,800 for both March and June. Finally, the Denver salesforce will receive a 2.00 percent commission on total sales for the first six months of the year, to be paid on June 30. |
Prepare a monthly summary of cash payments for the six-month period from January through June. (Note: Compute prior December purchases to help get total material payments for January.) |
Denver Corporation Cash Payments Schedule | ||||||||
December | January | February | March | April | May | June | July | |
Sales | $ | $ | $ | $ | $ | $ | $ | |
Purchases | $ | $ | $ | $ | $ | $ | $ | |
Payments: | ||||||||
Payment for material purchases | $ | $ | $ | $ | $ | $ | ||
Monthly labor cost | ||||||||
Monthly fixed overhead | ||||||||
Interest expense | ||||||||
Sales commission expense | ||||||||
Total payments | $ | $ | $ | $ | $ | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started