Problem 8-54 Name:
Insert your answers in the gray-shaded cells of columns D, F, I, and K. Enter amounts to
be subtracted as negatives. If an answer is incorrect, an asterisk “*” will appear.
Beginning cash bal. –$ (95,000)$
Collections-Schedule A 825,000 1,065,000
Total 825,000$ 970,000$
Disbursements:
Direct material –
Schedule B 220,000$ 249,167$
Direct labor * 360,000 375,000
Variable overhead ** 120,000 125,000
Fixed costs 130,000 130,000
Total (830,000) (879,167)
Cash available (5,000)$ 90,833$
Payments to creditors (90,000) (2) (90,833)
Ending cash balance (1) (95,000)$ –$
* at $30 per unit produced
** at $10 per unit produced
(1) This amount could be used to pay creditors or carried forward to the
beginning of next year.
(2) ($600,000 x 60%) – ($50,000 + $40,000) = $360,000 – $90,000 =
$270,000 -260,833 = $9,167 still owed to creditors
Schedule A (Collections from Customers):
2014 2015
Sales 900,000$ 1,080,000$
Beg. A/R – 75,000
Total 900,000$ 1,155,000$
End A/R (1/12 of sales) (75,000) (90,000)
Collections 825,000$ 1,065,000$
Schedule B (Disbursements for Direct Material):
2014 2015
Unit sales 10,000 12,000
Required ending inventory 2,000 2,500
Total needed 12,000 14,500
Beginning inventory – (2,000)
Solution
2014
2015
Vassar Corp.
Cash Budget
For Years Ending March 31, 2014 and 2015
Total units produced 12,000 12,500
Times DM cost per unit 20$ 20$
Total purchases 240,000$ 250,000$
Delayed payment (1/12) (20,000) (20,833)
Paid previous balance – 20,000
Disbursements 220,000$ 249,167$
Is the plan feasible?
The plan is not feasible.