Problem 1. Capes Corporation has budgeted sale of its popular scooter as follows: Month Units Unit Price Budgeted sales June 20,000 $10 $200,000 July 40,000 $10 $400,000 August 50,000 $10 $500,000 September 30,000 $10 $300,000 October 60,000 $10 $600,000 From past experience, the company has learned that 40% of a month's sale are collected in the month of sale, another 60% are collected in the month following the sale. a. Prepare a schedule of expected cash collections from sales for the third quarter (July, August, September). (10 pts) b. What is the accounts receivable balance as of the end of September? (5pts) The company is now in the process of preparing a production budget. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's unit sales. July's Beginning finished goods inventory is 4000 units. c. Prepare a production budget by month and in total, for the third quarter (July, August, September). (10 pts) Problem 2. Two pounds of organic flour are required for each pack of pasta made by Healthy Food Inc. The cost of organic flour is $0.5 per pound. Budgeted production of Healthy Food Inc.'s pasta (in pack) for January to April is as follows: January February March April Budged production of pasta, in pack 80,000 70,000 60,000 50,000 As part of the company's policy, the inventory of organic flour at the end of a month must be equal to 20% of the following month's production needs. The beginning inventory of organic flour for January is 32,000 pounds. a. Prepare a direct materials budget for organic flour, by month and in total for January, February, and March. (15pts) B D E Total 1 Problem 1 2 a. Prepare a schedule of expected cash collections from sales for the third quarter (July, August, September). 3 July August September 4 Beginning balance accounts receivable 5 July sales 6 August sales 7 September sales 8 Total cash collections 9 10 b. Accounts receivable balance (end of September): Total 12 c. Prepare a production budget by month and in total, for the third quarter (July, August, September). 13 July August September 14 15 16 17 18 19 20 Problem 2 21 a. Prepare a direct materials budget for organic flour, by month and in total for January, February, and March. 22 January Feburary March 23 24 25 26 27 28 29 30 31 Total 32 33 34 Version A +
