Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The data below pertains to the third quarter of Lulu Company which manufactures toys. Below is the estimated sales in units): July August September October

image text in transcribed
The data below pertains to the third quarter of Lulu Company which manufactures toys. Below is the estimated sales in units): July August September October November December 72,000 70,000 66,000 70,000 50,000 30,000 a. The selling price of each toy is $10.00 per unit. b. All sales are on account. Based on past experience, sales are collected in the following pattern: Month of sale Month following sale Uncollectible 45% 50% 5% Sales for June totaled $250,000. d. The company maintains finished goods inventories equal to 20% of the following month's sales. e. Each toy requires 3 pounds of raw materials. f. The company requires that the ending inventory of raw materials be equal to 15% of the following month's production needs. g. The raw material costs $2.00 per pound. h. 50% of a month's purchases of raw materials is paid for in the month of purchase; the remainder is paid for in the following month. i. The accounts payable on June 30 will be $80,000. The data below pertains to the third quarter of Lulu Company which manufactures toys. Below is the estimated sales in units): July August September October November December 72,000 70,000 66,000 70,000 50,000 30,000 a. The selling price of each toy is $10.00 per unit. b. All sales are on account. Based on past experience, sales are collected in the following pattern: Month of sale Month following sale Uncollectible 45% 50% 5% Sales for June totaled $250,000. d. The company maintains finished goods inventories equal to 20% of the following month's sales. e. Each toy requires 3 pounds of raw materials. f. The company requires that the ending inventory of raw materials be equal to 15% of the following month's production needs. g. The raw material costs $2.00 per pound. h. 50% of a month's purchases of raw materials is paid for in the month of purchase; the remainder is paid for in the following month. i. The accounts payable on June 30 will be $80,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advances In Quantitative Analysis Of Finance And Accounting - New Series (Vol. 2)

Authors: Lee Cheng Few

1st Edition

9812561641, 9789812561640

More Books

Students also viewed these Accounting questions