Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Quick Study 20-19 (10 minutes)
GUITAR SHOPPE
Cash Receipts Budget
For Month Ended September 30
Cash receipts from September cash sales (40% x $170,000)............ $ 68,000
Quick Study 20-20 (10 minutes)
MUSIC WORLD
Cash Receipts Budget
For Month Ended September 30
Cash receipts from August sales (55% x $150,000)........................... $ 82,500
Quick Study 20-21 (10 minutes)
WELLS COMPANY
Budgeted Cash Receipts
For Month Ended November 30
Cash receipts from November cash sales (25% x $80,000)............... $ 20,000
Collection of October’s sales (60% x $66,000).................................... 39,600
Quick Study 20-22 (15 minutes)
Computation of budgeted Accounts Receivable balance as of July 31
Sales month Total Sales
Credit
Sales*
Percent Still
Uncollected*
Amount
Uncollected
June.....................$420,000 $168,000 10% $ 16,800
Quick Study 20-23 (5 minutes)
MESSERS COMPANY
Cash Budget
For Month Ended February 28
Beginning cash balance........................................................................ $ 20,000
Cash receipts......................................................................................... 75,000
Total cash available............................................................................... 95,000
Cash disbursements............................................................................. (100,250)
Based on the cash budget above, the company must borrow $10,250 during
February to maintain a $5,000 cash balance.
Financial and Managerial Accounting, 6th Edition
Quick Study 20-24 (15 minutes)
GADO COMPANY
Cash Budget
For Month Ended March 31
Beginning cash balance..........................................................$ 72,000
Cash receipts from sales......................................................... 300,000
Total cash available................................................................. $372,000
Cash disbursements
Payments for purchases........................................................140,000
Salaries....................................................................................80,000
Quick Study 20-25 (10 minutes)
Sales....................................................................................................... BIS
Office salaries paid................................................................................ BIS
Accumulated depreciation.................................................................... BBS
Quick Study 20-26 (10 minutes)
GORDANDS
Cash Disbursements for Merchandise (Budgeted)
For Month Ended September 30
Cash disbursements for September purchases (25% x $720,000)....$180,000
Quick Study 20-27 (10 minutes)
MEYER CO.
Cash Disbursements for Merchandise (Budgeted)
For January, February, and March
January February March
Purchases..................................................... $15,800 $18,600 $20,200
Cash disbursements for
Current month’s purchases (40%) ..........$ 6,320 $ 7,440 $ 8,080
* Accounts payable balance at December 31
Quick Study 20-28 (5 minutes)
RAIDER-X COMPANY
Purchases Budget (in units)
For Month Ended April 30
Budgeted ending inventory (130% x 3,000)......................................... 3,900
Budgeted sales for April (units)........................................................... 18,000
Financial and Managerial Accounting, 6th Edition
Quick Study 20-29 (15 minutes)
LEXI COMPANY
Merchandise Purchases Budget
For April, May, and June
April May June
Next month’s budgeted sales (units)..........
1,220,000 980,000 1,020,000
Ratio of inventory to future sales............... x 30% x 30% x 30%
Budgeted ending inventory (units)............. 366,000 294,000 306,000
Quick Study 20-30 (15 minutes)
MONTEL COMPANY
Computation of Budgeted Cost of Purchases
For Month Ended July 31
Budgeted ending inventory.........................................................................$ 40,000
Budgeted cost of goods to be sold [$600,000 x (1 – 40%)]...................... 360,000
Required available merchandise................................................................400,000
Quick Study 20-31 (10 minutes)
1. Activity-based budgeting requires managers to focus on the activities of
2. Traditional budgeting consists of listing the amount of resources
required for each department (such as salaries and utilities). Activity-
Quick Study 20-32 (10 minutes)
1.
Sales (current year).................................................................
(in € millions)
€25,400
2.
Note: Assume budgeted sales of €26,000 for this question.
Financial and Managerial Accounting, 6th Edition
EXERCISES
Exercise 20-1 (5 minutes)
Exercise 20-2 (10 minutes)
Exercise 20-3 (15 minutes)
HOSPITABLE CO.
Production Budget
For April, May, and June
April May June
Next month’s budgeted sales (units).......... 580 540 620
Ratio of inventory to future sales............... x 25% x 25% x 25%
Budgeted ending inventory (units) ............ 145 135 155
Add budgeted sales for the month............. 500 580 540
Exercise 20-4 (15 minutes)
HOSPITABLE CO.
Direct Materials Budget
For April, May, and June
April May June
Budgeted production (units)*...................... 455 570 560
Materials requirements per unit.................. x 5 x 5 x 5
Materials needed for production (lbs.)....... 2,275 2,850 2,800
Cost per lb. ...................................................
Total cost.......................................................
x 4
$9,868
x 4
$11,340
x 4
$11,080
* From Exercise 20-3. **540 units (July’s budgeted production) x 30%
Exercise 20-5 (10 minutes)
MANNER COMPANY
Direct Labor Budget
For July, August, and September
July August Sept.
Budgeted production (units)....................... 620 680 540
Labor requirements per unit (hours).......... x 2 x 2 x 2
Total labor hours needed............................. 1,240 1,360 1,080
Exercise 20-6 (15 minutes)
Financial and Managerial Accounting, 6th Edition
RIDA INC.
Direct Materials Budget
Second Quarter
Units to be produced............................................................... 240,000
Materials requirement per unit...............................................x 0.60
Materials needed for production (pounds)............................ 144,000
Add budgeted materials ending inventory (pounds)*.......... 9,450
Material price per pound.........................................................
Total cost of direct materials purchases...............................
$19,293,750
*(52,500 x 0.60) x 30%
Exercise 20-7 (15 minutes)
1.
ADDISON CO.
Direct Labor Budget
Second Quarter
Units to be produced............................................................... 2,400
Labor requirements per unit (hours)...................................... x 4
Total labor hours needed........................................................ 9,600
Exercise 20-7 (continued)
2.
ADDISON CO.
Factory Overhead Budget
Second Quarter
Total labor hours needed........................................................ 9,600
Variable overhead rate per DL hour....................................... x $11
Budgeted variable overhead................................................... $105,600
Exercise 20-8 (20 minutes)
RAD CO.
Direct Materials Budget
For April, May, and June
April May June
Budgeted production (units)....................... 442 570 544
Materials requirements per unit.................. x 5 x 5 x 5
Materials needed for production (lbs.)....... 2,210 2,850 2,720
Deduct beginning inventory (lbs.).............. (663) (855) (816)
Materials to be purchased (lbs.).................. 2,402 2,811 2,714
*30% of next month’s materials needed for production. July’s materials needed for
production equals 2,700 pounds (540 units x 5).
Financial and Managerial Accounting, 6th Edition
