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Sleds, Inc., manufactures and sells snowboards. Sleds manufactures a single model, the Pipex. In late 2020, Sleds's management accountant gathered the following data to
Sleds, Inc., manufactures and sells snowboards. Sleds manufactures a single model, the Pipex. In late 2020, Sleds's management accountant gathered the following data to prepare budgets for January 2021: (Click the icon to view the budgeted balances and additional information pertaining to the cash budget.) (Click the icon to view the additional variable and fixed manufacturing cost information.) (Click the icon to view the materials and labor requirements, the direct materials inventories, and additional inventory information.) (Click the icon to view the following selected January 2021 budgets: Revenue, Direct material purchases, Direct manufacturing labor cost, Variable manufacturing overhead and Ending inventory.) Sleds, Inc. Cash Budget For Month Ending January 31, 2021 Cash balance, beginning Add receipts Collections from customers 16000 2492500 2508500 Read the requirements. Total cash available for needs Deduct disbursements Direct materials Direct manufacturing labor Variable manufacturing overhead costs Fixed manufacturing overhead costs Variable marketing costs Fixed operating (nonmanufacturing) overhead costs Cash dividends Total disbursements Cash balance, ending 630000 Requirement 2. Sleds is interested in maintaining a minimum cash balance of $125,000 at the end of each month. Will Sleds be in a position to pay the $165,000 dividend on January 31? Yes, Sleds will be in a position to pay the $165,000 dividend on January 31. Requirement 3. Why do Sleds's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Sleds's managers prepare a cash budget in addition to the operating income budget to plan cash flows to ensure that the company has adequate cash to pay expenses as they come due. If Sleds is profitable on an accrual accounting basis, this does not mean that it will have sufficient cash to make scheduled payments. Choose from any list or enter any number in the input fields and then continue to the next question. 0
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