Question
Problem 1: San Fernando Fertilizer Company plans to sell 250,000 units of finished product in July and anticipates a growth rate in sales of 4
Problem 1: San Fernando Fertilizer Company plans to sell 250,000 units of finished product in July and anticipates a growth rate in sales of 4 percent per month. The desired monthly ending inventory in units of finished product is 75 percent of the next month's estimated sales. There are 187,500 finished units in inventory on June 30. Each unit of finished product requires 6 pounds of raw material at a cost of $1.95 per pound. There are 880,000 pounds of raw material in inventory on June 30. Required:
1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. (Do not round intermediate calculations. Round your final answer to the nearest unit.)
2. Independent of your answer to requirement (1), assume the company plans to produce 640,000 units of finished product in the three-month period ending September 30, and to have raw-material inventory on hand at the end of the three-month period equal to 25 percent of the use in that period. Compute the total estimated cost of raw-material purchases for the entire three-month period ending September 30.
Problem 2:
The following information is from White Mountain Furniture Showroom's financial records. Month July August 70,000 47,000 September 66,000 35,000 October 80,000 53,000 Sales Purchases $76,000 $60,000 Collections from customers are normally 67 percent in the month of sale, 15 percent in the month following the sale, and 15 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 3 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for November are budgeted at $61,000, and sales for November are forecasted at $67,000. Cash disbursements for expenses are expected to be $15,400 for the month of November. The compan's cash balance on November 1 was $38,000 Required 1. Prepare the schedule for expected cash collections during November WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Collections November Expected Collections Month es Percent Total 2. Prepare the schedule for expected cash disbursements during November WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Disbursements November October purchases to be paid in November Net Cash disbursements for expenses Total 3. Prepare the schedule for expected cash balance on November 30 WHITE MOUNTAIN FURNITURE SHOWROOM Expected Cash Balance November 30 Balance, November 1 Expected balanceStep by Step Solution
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