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Please help with these two problems! The two problems are attached. Thank you. Problem 2 (20 points) Presented below are selected budget data items for
Please help with these two problems! The two problems are attached. Thank you.
Problem 2 (20 points) Presented below are selected budget data items for Strobe Corporation for a three-month period: Sales Direct materials Direct labor Variable overhead Fixed overhead Selling and admin. costs Fixed loan payments OCTOBE R $950,000 NOVEMBE R $850,000 DECEMBE R $835,000 $126,000 $122,000 $128,000 $92,000 $87,000 $98,000 $66,600 $63,400 $69,000 $145,000 $145,000 $145,000 $317,000 $315,000 $320,000 $150,000 $150,000 $150,000 Sales were $770,000 in August and $840,000 in September. Material usage was $115,000 in August and $118,000 in September. All sales are on account, and accounts receivable is historically collected 15% in the month of sale, 65% in the month following sales, and the remainder two months after the sale. Materials are paid for 40% in the month used and 60% the following month. All other expenses are paid in the month incurred. The cash balance was $35,000 at the beginning of October, and management wants to determine if the company will have enough cash to pay a year-end bonus. Prepare a three-month cash budget, including a schedule for cash collections and material payments. Problem 3 (10 points) Champion Products Inc. manufactures and distributes barbecue grills. The company normally sells 3,000 of these grills each month for a price of $100 each. The material cost for a grill is $49 and the direct labor is $27. The variable overhead cost is $18 per grill, and the fixed overhead cost is $25,000 per month. A contract manufacturer has approached the company and offered to supply the grills ready to sell for $80 each. The company management believes that if it accepts this offer, Champion Products will be able to lease unused factory space for $12,000 per month. Perform a make-versus-buy analysisStep by Step Solution
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