Question
JC Floor Design makesceramic tiles December sales were: 500,000 units Selling price $2 per unit 1,000,000 total sales The Marketing Department, projects sales to: increase
JC Floor Designmakesceramic tiles
December sales were:
500,000 units
Selling price $2 per unit
1,000,000 total sales
The Marketing Department, projects sales to:
increase by 5% in January
February sales will be 15,000 units less than January
March sales will be 3% higher than February sales
April sales will be the 5,300 units less than march
The price is not expected to increase
JC inventory policy is to maintain an ending inventory equals to 30% of next month sales. Actual inventory is 168,000 units
Clay the material to make the tiles cost $.50 per pound and each tile requires .6 pound. Actual clay inventory is 60,000 pounds and the inventory policy is to maintain an inventory equal to 25% of next month production requirement.
April production is expected to be 525,000 units. The cost of direct materials purchased in December was $150,000
Each tile requires .10 hours and the labor hourly rate is $8.00 per hour
Variable overhead rate is 20% of labor and fixed overhead is 25,000 monthly
Selling and administrative expenses are expected to be
Administrative salaries
$15,000 per month
Sales salaries
$12,000 per month
Sales commissions
10% of sales
70% of sales are cash sales and the remaining are collected in the next month
Material are paid 60% cash and the remaining the next month
The company has the following obligations:
100,000 in dividends will be paid in February
A new machine will be acquired in January with a cost of 250,000
A short-term loan with an outstanding balance of $150,000 is used to manage the cash position. Interest on the short-term loan are 1% monthly
Taxes of last quarter were $240,000 and will be paid in March. The company tax rate is 35%. and taxes are paid in the next quarter.
REQUIRED: Problems
Compute the materials to be purchased in March
Compute the Direct Materials Cost for January
Compute Total Overhead for the quarter
Compute Product Cost
Compute Total sales expenses for the quarter
Compute Selling and Administrative expenses for February
Compute Cash Receipts for January
Compute Total cash payments for materials in March
Total cash available for February
Compute ending cash balance for March
Compute Total Cash Payments for February
Compute the preliminary cash balance for January
Compute the repayment of loan for February
Compute total interest paid
Compute Accounts Receivables in Balance Sheet
Compute Accounts Payable in the Balance Sheet
Compute Cost of goods sold
Compute Finished goods inventory in Balance Sheet
Compute Gross Profit
Compute after tax income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started