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
June…....……….....$420,000 $168,000 10% $ 16,800
Quick Study 22-23 (5 minutes)
MESSERS COMPANY
Cash Budget
For Month Ended February 28
Beginning cash balance…………………………………………………………..…. $ 20,000
Cash receipts……………………………………………………..………..………..….. 75,000
Ending cash balance………………………………………………….…..………..… $ 5,000
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 disbursements
Payments for purchases………………………..……..………..……..140,000
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 $20,200
Cash disbursements for
Current month’s purchases (40%) ..........$ 6,320 $ 7,440 $ 8,080
* 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
Budgeted sales for April (units)…………………………………..………..……. 18,000
Required units of available inventory………………………………….……....
21,900
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
Add budgeted sales (units)..…..………......... 1,040,000 1,220,000 980,000
Quick Study 22-30 (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
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.
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%
Budgeted ending inventory (units) ..…....... 145 135 155
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
Materials needed for production (lbs.)....... 2,275 2,850 2,800
* 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
Labor requirements per unit (hours).......... x 2 x 2 x 2
Exercise 22-6 (15 minutes)
RIDA INC.
Direct Materials Budget
Second Quarter
Units to be produced…………………………………………..……….... 240,000
Materials to be purchased (pounds) ………………..………..……
Material price per pound…………………………..………..………..…
Total cost of direct materials purchases………..………..………
110,250
x $175
$19,293,750
Exercise 22-7 (15 minutes)
1.
ADDISON CO.
Direct Labor Budget
Second Quarter
Units to be produced…………………………………………..……….... 2,400
Labor requirements per unit (hours)……………………………….. x 4
Exercise 22-7 (continued)
2.
ADDISON CO.
Factory Overhead Budget
Second Quarter
Total labor hours needed………………………..……..………..…….. 9,600
Exercise 22-8 (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
*30% of next month’s materials needed for production. July’s materials needed for
production equals 2,700 pounds (540 units x 5).