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