PROBLEM 9-37

1.

Sales budget for 20x0:

Units

Price

Light coils.........................................................................

60,000

$65

$3,900,000

Heavy coils.......................................................................

40,000

$95

3,800,000

Projected sales................................................................
2.

Total

$7,700,000

Production budget (in units) for 20x0:

Light Coils

Heavy Coils

Projected sales.........................................................................................

60,000

40,000

Add: Desired inventories,

December 31, 20x0..............................................................................

25,000

9,000

Total requirements....................................................................................

85,000

49,000

Deduct: Expected inventories, January 1, 20x0....................................

20,000

8,000

Production required (units).....................................................................

65,000

41,000

3.

Raw-material purchases budget (in quantities) for 20x0:

Raw Material
Sheet
Metal

Copper Wire
Platforms

Light coils (65,000 units projected

to be produced).........................................................

260,000

130,000

__

Heavy coils (41,000 units projected

to be produced).........................................................

205,000

123,000

41,000

Production requirements................................................

465,000

253,000

41,000

Add: Desired inventories, December 31, 20x0.............

36,000

32,000

7,000

Total requirements...........................................................

501,000

285,000

48,000

Deduct: Expected inventories,

January 1, 20x0.........................................................

32,000

29,000

6,000

Purchase requirements (units).......................................

4.

469,000

256,000

42,000

Raw-material purchases budget for 20x0:

Raw Material
Required
(units)

Anticipated
Purchase
Price

Sheet metal.....................................................................

469,000

$8

$3,752,000

Copper wire....................................................................

256,000

1,280,000

Platforms.........................................................................

42,000

126,000

Raw Material

Total.................................................................................
5.

Total

$5,158,000

Direct-labor budget for 20x0:

Projected
Production
(units)

Hours
per
Unit

Total
Hours

Rate

Total
Cost

Light coils...........................................

65,000

130,000

$15

$1,950,000

Heavy coils.........................................

41,000

123,000

20

2,460,000

Total....................................................

6.

$4,410,000

Manufacturing overhead budget for 20x0:

Purchasing and material handling...............................

Depreciation, utilities, and inspection.........................
Shipping..........................................................................
General manufacturing overhead................................

Cost Driver
Quantity

Cost
Driver
Rate

725,000 lb.a
106,000 coils b
100,000c
253,000 hr. d

$.25
$4.00
$1.00
$3.00

Total manufacturing overhead......................................

a

725,000 = 469,000 + 256,000 (from req. 3)

106,000 = 65,000 + 41,000 (from req. 2)
c
100,000 = 60,000 + 40,000 (total units sold, from problem)
b

Budgeted
Cost
$181,250
424,000
100,000
759,000
$1,464,250

253,000 = 130,000 + 123,000 (from req. 5)

PROBLEM 9-35
1.

Sales budget

Sales (in sets).....................................................

2.

3.

April

May

June

10,000

12,000

15,000

Sales price per set.............................................

Sales revenue.....................................................

$500,000

$600,000

$750,000

April

May

June

Sales....................................................................

10,000

12,000

15,000

Add: Desired ending inventory........................

2,400

3,000

3,000

Total requirements.............................................

12,400

15,000

18,000

Less: Projected beginning inventory...............

2,000

2,400

3,000

Planned production...........................................

10,400

12,600

15,000

April

May

June

10,400

12,600

15,000

$50

$50

$50

Production budget (in sets)

Raw-material purchases

Planned production (sets)....................................

Raw material required per set
(board feet)........................................................

10

10

10

Raw material required for production

(board feet)........................................................

104,000

126,000

150,000

Add: Desired ending inventory of raw

material (board feet).........................................

12,600

15,000

16,000

Total requirements................................................

116,600

141,000

166,000

Less: Projected beginning inventory of

raw material (board feet)..................................

10,400

12,600

15,000

Planned purchases of raw material

(board feet)........................................................

106,200

128,400

151,000

Cost per board foot...............................................

$.50

$.50

$.50

Planned purchases of raw material

(dollars)..............................................................

$ 53,100

$ 64,200

$ 75,500

4.

Direct-labor budget

Planned production (sets)....................................

Direct-labor hours per set....................................

April

May

June

10,400

12,600

15,000

Direct-labor hours required..................................

1.5
15,600

Cost per hour.........................................................

Planned direct-labor cost.....................................

$312,000

1.5

1.5

18,900

$20

22,500

$20

$378,000

$20

$450,000

PROBLEM 9-31
1.

Schedule of cash collections:

January
Collection of accounts receivable:
$55,000 x 20%...
Collection of January sales ($150,000):
60% in January; 35% in February ..
Collection of February sales ($180,000):
60% in February; 35% in March..
Collection of March sales ($185,000):
60% in March; 35% in April..
Sale of equipment.
Total cash collections

2.

February

March

$ 11,000
90,000

$101,000

$ 52,500
108,000

$ 63,000

$160,500

111,000
5,000
$179,000

Schedule of cash disbursements:

January
Payment of accounts payable...
Payment of January purchases ($90,000):
70% in January; 30% in February..
Payment of February purchases ($100,000):
70% in February; 30% in March..
Payment of March purchases ($140,000):
70% in March; 30% in April..
Cash operating costs..
Total cash disbursements...

February

March

$ 22,000
63,000

31,000
$116,000

$ 27,000
70,000

$ 30,000

24,000
$121,000

98,000
45,000
$173,000

3.

Schedule of cash needs:

Beginning cash balance.

Total receipts.
Subtotal.
Less: Total disbursements
Cash excess (deficiency) before financing
Financing:
Borrowing to maintain $20,000 balance..
Loan principal repaid
Loan interest paid..
Ending cash balance

January

February

March

$ 20,000
101,000
$121,000
116,000
$ 5,000

$ 20,000
160,500
$180,500
121,000
$ 59,500

$ 44,300
179,000
$223,300
173,000
$ 50,300

(15,000)
(200)*
$ 44,300

$ 50,300

15,000
$ 20,000

* $15,000 x 8% x 2/12

Problem : 9.25

1.

BINGHAMTON FILM CORPORATION

EXPECTED CASH COLLECTIONS
AUGUST
Expected Collections

Month

Sales

Percent

June...................................................

$60,000

9%

$ 5,400

July....................................................

78,000

20%

15,600

August...............................................

66,000

70%

46,200

Total...............................................
2.

$67,200

BINGHAMTON FILM CORPORATION

EXPECTED CASH DISBURSEMENTS
AUGUST

July purchases to be paid in August............................................................

$ 54,000

Less: 2% cash discount................................................................................

1,080

Net...............................................................................................................

$ 52,920

Cash disbursements for expenses...............................................................

14,400

Total............................................................................................................

$ 67,320

3.

BINGHAMTON CORPORATION
EXPECTED CASH BALANCE
AUGUST 31

Balance, August 1..........................................................................................

$22,000

Add: Expected collections............................................................................

67,200

Less: Expected disbursements....................................................................

67,320

Expected balance......................................................................................

$21,880