Question
Sweet Acacia Company prepares monthly cash budgets. Relevant data from operating budgets for 2023 are as follows: January February Sales $349,000 $396,000 Direct materials purchases
Sweet Acacia Company prepares monthly cash budgets. Relevant data from operating budgets for 2023 are as follows:
January | February | |||
---|---|---|---|---|
Sales | $349,000 | $396,000 | ||
Direct materials purchases | 121,000 | 109,000 | ||
Direct labour | 84,000 | 114,000 | ||
Manufacturing overhead | 60,000 | 76,000 | ||
Selling and administrative expenses | 74,000 | 79,000 |
All sales are on account. Sweet Acacia expects collections to be 50% in the month of sale, 40% in the first month following the sale, and 10% in the second month following the sale. It pays 30% of direct materials purchases in cash in the month of purchase and the balance due in the month following the purchase. Other data are as follows:
1. | Credit sales: November 2022, $198,000; December 2022, $281,000 |
2. | Purchases of direct materials: December 2022, $91,000 |
3. | Other receipts: Januarycollection of December 31, 2022, notes receivable $4,000; Februaryproceeds from sale of securities $7,000 |
4. | Other disbursements: Februarypayment of $21,000 for land |
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