Please help with a cash budget planning. Thanks very much!
Input Data Revenue Assumption Selling Price per Cell Phone Volume of Cell Phone Sals Total Sales Direct Materials per Cell Phone Circuit Battery Case Direct Labour Hours Assembly Packing Cost Per Hour Assembly Packing Cost Per Cell Phone Assembly Packing $ 4040 404.0 (fl-MU!- 4040 150.00 100,000.00 15,000,00000 35.00 20.00 10.00 0.50 0.10 65.00 35.00 30.00 5.00 Inventory Information Beginning Circuit 5 25,000.00 Battery $ 20,000.00 Case 5 10,000.00 Finished Goods (Units) 2,000.00 Cost Per Unit Total Finished Goods (Costs) $ 107,850.00 Tax Rate 25% Ending $ 35,000.00 5 25,000.00 5 12,000.00 2200.00 5 128.15 $ 281,930.00 Estimated Variable Manufacturing Overhead Costs: Supplies 5 Indirect Labour 5 Maintenance 5 Miscellaneous 5 Total 5 Variable Overhead Allocation Rate 5 220,000.00 300,550.00 140,200.00 55,200.00 715,050.00 7.15 Estimated Fixed Manufacturing Overhead Costs: Amortization $ 320,728.00 Property Taxes 5 32,228.00 Insurance 5 72,368.00 Plant Management .5 340,600.00 Fringe Benets 5 406,840.00 Miscellaneous S 89,992.00 Total 5 1,252,755.00 Fixed Overhead Allocation Rate 5 21.00 Support Department Fixed Costs Administration 5 1,534,800.00 Marketing 5 1,020,748.00 Distribution 5 510,374.00 Customer Service $ 303,458.00 Total 5 3,369,380.00 _l l_ Refer to the above information. The company's managers budget cash flows on a quarterly basis so that they can plan short-term investments and borrowings. Cellular phone sales are highest during the spring and summer. Sales are fairly even within each quarter, but sales vary across quarters as follows: April-June Jul ~89- ember October-December 10% Accounts receivable at the end of the prior year, consisting of sales made during December totalled $130,000. Payments from customers are usually received as follows: Pay during the month goods are received 50% Pay the next month 50% Bad Debts 0% l\" !-'"l 599\" The company pays its vendors 10 days after raw materials are reoeived, so approximately 80% of purchases are paid in the month of production and 20% are paid the following month. Accounts payable at the end of the prior year totalled $130,000 Employee wages and other production costs are paid during the month incurred. Property taxes are paid in two equal installments on March 31 and September 30, and insurance is paid annually on June 30. Support costs are paid evenly throughout the year. Estimated income tax payments are made at the end of the quarter, based on 25% of total estimated taxes for the year. In addition to customer receipts, the company expects to receive $10,000 in proceeds from the sale of equipment during January. The company also plans to purchase and pay for new equipment costing $100,000 in January. The company finances its short-term operations with a line of credit from the bank, which had a balance of $500,000 at the end of the prior year. The line of credit requires quarterly interest rates payments at an annual rate of 5.5%. (For simplicity, assume that al borrowing and repayments occur on the last day of each quarter} 0: Prepare quarterly budgets for cash reoeipts, cash disbursements and shorl-ten'n nancing
