Required: Prepare a schedule of cash recipts for August and September. Problem 9-66 Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines, The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: OBJECTIVE 1 2 3 EXCEL January February March April May 10,000 50,000 60,000 60,000 62,000 The following data pertain to production policies and manufacturing specifications fol lowed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, cach costing $166.06. The desired ending inventory for each month is 80% of the next month's sales. b. The data on materials used are as follows: Direct Material Per-Unit Usage DM Unit Cost Metal 10 lbs Components Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) Fixed Cost Component Supplies Power Maintenance Supervision Depreciation Variable-Cost Component $1.00 0.50 0.40 $ 30,000 16,000 200,000 12,000 80,000 Taxes Other c. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) Variable Costs Fixed Costs $50,000 $2.00 Salaries Commissions Depreciation Shipping Other 40,000 20,000 1.00 0.60 f. The unit selling price of the subassembly is $205. g. All sales and purchases are for cash. The cash balance on January 1 cquals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage (Continued We've updated or read aloud featu Required: Prepare a schedule of cash recipts for August and September. Problem 9-66 Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines, The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: OBJECTIVE 1 2 3 EXCEL January February March April May 10,000 50,000 60,000 60,000 62,000 The following data pertain to production policies and manufacturing specifications fol lowed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, cach costing $166.06. The desired ending inventory for each month is 80% of the next month's sales. b. The data on materials used are as follows: Direct Material Per-Unit Usage DM Unit Cost Metal 10 lbs Components Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) Fixed Cost Component Supplies Power Maintenance Supervision Depreciation Variable-Cost Component $1.00 0.50 0.40 $ 30,000 16,000 200,000 12,000 80,000 Taxes Other c. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) Variable Costs Fixed Costs $50,000 $2.00 Salaries Commissions Depreciation Shipping Other 40,000 20,000 1.00 0.60 f. The unit selling price of the subassembly is $205. g. All sales and purchases are for cash. The cash balance on January 1 cquals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage (Continued We've updated or read aloud featu
