EXERCISE 23-18B
AVANTE DENTAL CLINIC
Cash Budget
For the Two Quarters Ending June 30, 2017
1st Quarter
2nd Quarter
Beginning cash balance ……………………………………
Add: Receipts
Collections from clients …………………………
Sale of equipment ………………………………….
Investment interest ………………………………..
Total receipts ………………………………….
$ 30,000
245,000
12,000
0
257,000
$ 20,000
390,000
0
7,000
397,000
EXERCISE 23-19B
(a) ABDUL STORES
Merchandise Purchases Budget
For the Month Ending June 30, 2017
Budgeted cost of goods sold ($520,000 X 65%) ……………… $338,000
Add: Desired ending merchandise inventory
(b) ABDUL STORES
Budgeted Income Statement
For the Month Ending June 30, 2017
Sales…………………………………………………………………………… $520,000
SOLUTIONS TO PROBLEMS—SET C
PROBLEM 23-1C
BOLIVAR FARM SUPPLY COMPANY
Sales Budget
For the Six Months Ending June 30, 2017
Quarter
Six
Months
1
2
Total sales …………………………...
Expected unit sales ………………
40,000
50,000
90,000
BOLIVAR FARM SUPPLY COMPANY
Production Budget
For the Six Months Ending June 30, 2017
Quarter
Six
Months
1
2
Expected unit sales …………………………………….
Add: Desired ending finished goods
units ………………………………………………..
40,000
15,000
50,000
20,000
PROBLEM 23-1C (Continued)
BOLIVAR FARM SUPPLY COMPANY
Direct Materials Budget—Crup
For the Six Months Ending June 30, 2017
Quarter
Six
Months
1
2
Units to be produced …………………………..
Direct materials per unit ……………………….
Total pounds needed for production …….
Add: Desired ending direct materials
45,000
X 6
270,000
55,000
X 6
330,000
BOLIVAR FARM SUPPLY COMPANY
Direct Labor Budget
For the Six Months Ending June 30, 2017
Quarter
Six
Months
1
2
$112,500
Units to be produced ……………………..
45,000
55,000
PROBLEM 23-1C (Continued)
BOLIVAR FARM SUPPLY COMPANY
Selling and Administrative Expense Budget
For the Six Months Ending June 30, 2017
Quarter
Six
Months
1
2
Budgeted sales in units …………………
40,000
50,000
90,000
BOLIVAR FARM SUPPLY COMPANY
Budgeted Income Statement
For the Six Months Ending June 30, 2017
Sales ………………………………………………………………………………. $5,400,000
Cost of goods sold (90,000 X $49) …………………………………….. 4,410,000
Gross profit …………………………………………………………………….. 990,000
Cost Per Bag
Cost Element
Quantity
Unit Cost
Total
Direct materials
Crup ……………………………………..
6 pounds
$ 4.00
$24.00
PROBLEM 23-2C
(a) BACON INC.
Sales Budget
For the Year Ending December 31, 2017
LN 35
LN 40
Total
(b) BACON INC.
Production Budget
For the Year Ending December 31, 2017
LN 35
LN 40
Total
Expected unit sales …………………………
Add: Desired ending finished
400,000
240,000
PROBLEM 23-2C (Continued)
(c) BACON INC.
Direct Materials Budget
For the Year Ending December 31, 2017
LN 35
LN 40
Total
Units to be produced ………………….
Direct materials per unit ……………..
Total pounds needed for
production…………………………..….
Add: Desired ending direct
materials (pounds) ……………
Total materials required ……………..
Less: Beginning direct
410,000
X 2
820,000
50,000
870,000
245,000
X 3
735,000
15,000
750,000
(d) BACON INC.
Direct Labor Budget
For the Year Ending December 31, 2017
LN 35
LN 40
Total
Units to be produced ………………….
Direct labor time (hours) per
unit …………………………………………
Total required direct labor
410,000
X .5
245,000
X .70
550,000
PROBLEM 23-2C (Continued)
(e) BACON INC.
Budgeted Income Statement
For the Year Ending December 31, 2017
LN 35
LN 40
Total
Sales ………………………………..
Cost of goods sold ……………
Income before income
taxes …………………………....
$12,000,000
4,400,000
$ 6,230,000
(1)
$8,400,000
4,800,000
$3,030,000
(2)
$20,400,000
9,200,000
9,260,000
PROBLEM 23-3C
(a) RUPERT INDUSTRIES
Sales Budget
For the Year Ending December 31, 2017
Plan A
Plan B
Expected unit sales ……………………………..
720,000
(1)
900,000
(2)
(3)
(b) RUPERT INDUSTRIES
Production Budget
For the Year Ending December 31, 2017
Plan A
Plan B
Expected unit sales ……………………………………….
720,000
900,000
(c) Variable costs = $4.00 per unit ($2.00 + $1.50 + $.50) for both plans.
Plan A
Plan B
Total variable costs
Total fixed costs
Total costs (a)
$2,976,000
930,000
$3,906,000
(744,000 X $4.00)
$3,720,000
930,000
$4,650,000
(930,000 X $4.00)
PROBLEM 23-3C (Continued)
(d) Gross Profit
Plan A
Plan B
Sales
$5,472,000
$5,670,000
PROBLEM 23-4C
(a) (1) Expected Collections from Customers
January
February
$368,000
November ($200,000) …………………………….
December ($280,000) …………………………….
$ 20,000
112,000
$ 0
28,000
(2) Expected Payments for Direct Materials
January
February
$117,000
December ($80,000) ………………………………
$56,000
$ 0
PROBLEM 23-4C (Continued)
(b) MURDOCK COMPANY
Cash Budget
For the Two Months Ending February 28, 2017
January
February
Beginning cash balance …………………………….
Add: Receipts
Collections from customers ………………
[See Schedule (1)]
$ 50,000
307,000
$ 50,000
368,000
Less: Disbursements
Direct materials ……………………………….
[See Schedule 2]
Direct labor …………………………………
Manufacturing overhead ……………..
Selling and administrative
92,000
85,000
60,000
117,000
112,000
75,000
PROBLEM 23-5C
(a) ALE COMPANY
Weston Store
Merchandise Purchases Budget
For the Months of July and August, 2017
July
August
Budgeted cost of goods sold ………………………..
Add: Desired ending merchandise inventory ….
Total ……………………………………………………………
$270,000
60,000
330,000
*
(1)
$300,000
66,000
366,000
**
(2)
PROBLEM 23-5C (Continued)
(b) ALE COMPANY
Weston Store
Budgeted Income Statement
For the Months of July and August, 2017
July
August
Sales ……………………………………………………….…
Cost of goods sold
Beginning inventory …………………………….
Purchases …………………………………………..
Cost of goods available for sale ……………
$450,000
54,000
276,000
330,000
$500,000
60,000
306,000
366,000
Operating expenses
Sales salaries ………………………………………
Advertising* …………………………………………
Delivery expense** ……………………………….
50,000
18,000
9,000
50,000
20,000
10,000