Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

One unique subunit of the University of Wisconsin is BIce Cream, a functioning producer of dairy products must prepare budgets. BIce Cream prepares monthly cash

One unique subunit of the University of Wisconsin is BIce Cream, a functioning producer of dairy products must prepare budgets. BIce Cream prepares monthly cash budgets. Relevant data from assumed operating budgets for 2011 are:

image text in transcribed

Collections are expected to be 75% in the month of sale, and 25% in the month following sale. Bice pays 60% of direct materials purchases in cash in the month of purchase, and the balance due in the month following the purchase. All other items above are paid in the month incurred. (Depreciation has been excluded from manufacturing overhead and selling and administrative expenses.).

Other data: Sales: December 2010, 320.000; Purchases of direct materials: December 2010, 175.000; Other receipts: JanuaryDonation received, 2.000; FebruarySale of used equipment, 4.000; Other disbursements: FebruaryPurchased equipment, 10.000 Repaid debt: January, 30.000. The companys cash balance on January 1, 2011, is expected to be 50.000. The company wants to maintain a minimum cash balance of 45.000.

1. Prepare schedules for expected collections from customers and expected payments for direct materials purchases.

2. Prepare a cash budget for January and February in columnar form.

() January February Sales 460.000 412.000 Direct materials purchases 185.000 210.000 Direct labor 70.000 85.000 Manufacturing overhead 50.000 65.000 Selling and admin. expenses 85.000 95.000

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

Cases In Financial Reporting

Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally

8th Edition

1618531220, 9781618531223

More Books

Students also viewed these Finance questions

Question

Whats the answer to his problem I can't find my mistake?

Answered: 1 week ago

Question

analyze file formats and basic digital design rules.

Answered: 1 week ago