Question
O'Reilly, Inc. has prepared its third quarter budget and provided the following data: Jul Aug Sep Cash collections $ 49 comma 000$49,000 $ 39 comma
O'Reilly, Inc. has prepared its third quarter budget and provided the following data:
| Jul | Aug | Sep | ||
| Cash collections | $ 49 comma 000$49,000 | $ 39 comma 700$39,700 | $ 47 comma 800$47,800 | |
| Cash payments: | ||||
| Purchases of direct materials | 28 comma 00028,000 | 21 comma 40021,400 | 18 comma 10018,100 | |
| Operating expenses | 12 comma 50012,500 | 8 comma 8008,800 | 11 comma 30011,300 | |
| Capital expenditures | 13 comma 30013,300 | 25 comma 10025,100 | 0 |
The cash balance on June 30 is projected to be
$ 4 comma 500$4,500.
The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of
55%.
All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. Calculate the amount of principal repayment at the end of September.
A.
$5,000
B.
$ 10 comma 000$10,000
C.
$ 15 comma 000$15,000
D.
$ 20 comma 000$20,000
Magnolia, Inc. has budgeted sales for the first quarter of the next year to be
40 comma 00040,000
units. The inventory on hand at the beginning of quarter is
5 comma 0005,000
units. The desired ending inventory is
5 comma 0005,000
units. Calculate the budgeted production for the first quarter.
A.
5 comma 0005,000
units
B.
40 comma 00040,000
units
C.
45 comma 00045,000
units
D.
35 comma 00035,000
units
Manhattan Enterprises manufactures cookware sets and sells the sets to department stores. Manhattan expects to sell 2,400 cookware sets for $200 each in April and 3,500 cookware sets for$215 each in May. Sales are 15% cash and 85% on account. Compute the total budgeted sales for May.
A.
$752,500
B.
$480,000
C.
$9,594,375
D.
$112,875
Risa, Inc. has provided the following extracts from their budget for the first quarter of the forthcomingyear:
| Jan | Feb | March | |
| Purchases on account | $ 273 comma 000$273,000 | $ 292 comma 000$292,000 | $ 360 comma 000$360,000 |
The vendors are allowed the following terms of payment:
| Month of purchase | 1010% |
| First month after the purchase | 3535% |
| Second month after the purchase | 3535% |
Calculate the total payment on account for the month of March.
A.
$ 233 comma 750$233,750
B.
$ 360 comma 000$360,000
C.
$ 127 comma 980$127,980
D.
$ 177 comma 975$177,975
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