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Quick Study 22-19 (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 22-20 (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 22-21 (10 minutes)
WELLS COMPANY
Budgeted Cash Receipts
For Month Ended November 30
Cash receipts from November cash sales (25% x $80,000).............. $ 20,000
Quick Study 22-22 (15 minutes)
Computation of budgeted Accounts Receivable balance as of July 31
Sales month Total Sales
Credit
Sales*
Percent Still
Uncollected*
Amount
Uncollected
* Credit sales are 40% of total sales—of these credit sales, 20% are collected in the sale month,
70% are collected in the month after sale, and 10% are collected in the second month after sale.
Quick Study 22-23 (5 minutes)
MESSERS COMPANY
Cash Budget
For Month Ended February 28
Beginning cash balance...................................................................... $ 20,000
Cash receipts....................................................................................... 75,000
Based on the cash budget above, the company must borrow $10,250 during
February to maintain a $5,000 cash balance.
Quick Study 22-24 (15 minutes)
GADO COMPANY
Cash Budget
For Month Ended March 31
Beginning cash balance........................................................$ 72,000
Cash receipts from sales....................................................... 300,000
Quick Study 22-25 (10 minutes)
Sales..................................................................................................... BIS
Office salaries paid.............................................................................. BIS
Quick Study 22-26 (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 22-27 (10 minutes)
MEYER CO.
Cash Disbursements for Merchandise (Budgeted)
For January, February, and March
January February March
Purchases.................................................... $15,800 $18,600 $20,200
Cash disbursements for
* Accounts payable balance at December 31
Quick Study 22-28 (5 minutes)
RAIDER-X COMPANY
Purchases Budget (in units)
For Month Ended April 30
Budgeted ending inventory (130% x 3,000)....................................... 3,900
Quick Study 22-29 (15 minutes)
LEXI COMPANY
Merchandise Purchases Budget
For April, May, and June
April May June
Next month’s budgeted sales (units).........
1,220,000 980,000 1,020,000
Ratio of inventory to future sales............... x 30% x 30% x 30%
Quick Study 22-30 (15 minutes)
MONTEL COMPANY
Computation of Budgeted Cost of Purchases
For Month Ended July 31
Budgeted ending inventory.......................................................................$ 40,000
Quick Study 22-31 (10 minutes)
1. Activity-based budgeting requires managers to focus on the activities of
2. Traditional budgeting consists of listing the amount of resources
Quick Study 22-32 (10 minutes)
1.
Sales (current year)................................................................
(in € millions)
€25,400
2.
Note: Assume budgeted sales of €26,000 for this question.
€5,200
EXERCISES
Exercise 22-1 (5 minutes)
Exercise 22-2 (10 minutes)
Exercise 22-3 (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%
Exercise 22-4 (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
* From Exercise 22-3. **540 units (July’s budgeted production) x 30%
Exercise 22-5 (10 minutes)
MANNER COMPANY
Direct Labor Budget
For July, August, and September
July August Sept.
Budgeted production (units)....................... 620 680 540
Exercise 22-6 (15 minutes)
RIDA INC.
Direct Materials Budget
Second Quarter
Units to be produced............................................................. 240,000
Materials requirement per unit.............................................. x 0.60
Exercise 22-7 (continued)
2.
ADDISON CO.
Factory Overhead Budget
Second Quarter
Total labor hours needed....................................................... 9,600
Variable overhead rate per DL hour...................................... x $11
Exercise 22-8 (20 minutes)
RAD CO.
Direct Materials Budget
For April, May, and June
April May June
Budgeted production (units)....................... 442 570 544
