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Question;Problem 5-1;Your Company, Inc. has determined that its planned production for the upcoming;fiscal year is;Units;to be produced, First Quarter = 6,000;Second;Quarter = 7,000;Third;Quarter = 5,000;Fourth;Quarter = 4,000;Beginning raw materials inventory for the first quarter is 2,400 pounds.;Beginning accounts payable for the first quarter is \$2,520. Each unit requires;4 pounds of raw material that costs \$0.70 per pound. Management desires to end;each quarter with an inventory equal to 10% of the following quarter?s;production needs. The desired ending inventory for the fourth is 2,600 pounds.;Management plans to pay 80% of the raw material purchases in the quarter;acquired and 20% in the following quarter. Each unit requires 0.70 direct labor;hours and the labor rate is \$16.00 per hour.;Required;1] Prepare the company?s direct;materials budget and schedule of expected cash disbursements for purchases of;raw materials for the upcoming fiscal year.;2] Prepare the company?s direct labor;budget for the upcoming fiscal year, assuming that the direct labor workforce;is adjusted each quarter to match the number of hours required to produce the;forecasted number of units produced.;Problem 5-2;My Company, Inc. has determined that its planned production for the upcoming;fiscal year is;Units;to be produced: First Quarter;= 6,000;Second;Quarter = 7,000;Third;Quarter = 6,500;Fourth;Quarter = 5,500;Each unit requires 1.4 direct labor hours and workers are paid \$12.50 per hour.;The variable manufacturing overhead rate is \$0.75 per direct labor hour. The;fixed manufacturing overhead is \$90,000 per quarter. The only non-cash element;of manufacturing overhead is depreciation, which is \$20,000 per quarter. All labor;costs and manufacturing overhead is paid in the quarter incurred.;Required;1] Prepare the company?s direct labor;budget for the upcoming fiscal year, assuming that the direct labor work force;is adjusted each quarter to match the number of hours required to produce the;forecasted number of units produced.;2] Prepare the company?s manufacturing;overhead budget.;Problem 5-3;You will be required to prepare a December cash budget. You are provided with;the following information;a] Cash balance on December 1 is;\$60,000.;b] Actual sales for October and;November and expected sales for December are as follows:October November December;Cash;sales \$95,000 \$105,000 \$125,000;Sales;on account \$600,000 \$785,000 \$900,000;Sales on account are collected over;a three month period as follows;Month;of sale: 15%;Month;following sale: 60%;Second month following sale: 20%;Five percent of sales on account;are uncollectible.;c] Purchases of inventory for December;will total \$420,000. Forty percent of a month?s inventory purchases are paid in;the month of purchase. The accounts payable remaining from November inventory;purchases total \$205,000, all of which will be paid in December.;d] Selling and administrative expenses;are budgeted at \$440,000 for December, of this amount \$50,000 is for;depreciation.;e] A new machine will be purchased for;cash, in December, at a cost of \$205,000, dividends totaling \$25,000 will be;paid in December.;f] The company maintains a minimum;cash balance of \$60,000. An open line of credit is available from the company?s;bank to bolster the cash position as needed.;Required;1] Prepare a schedule of cash;collections for December.;2] Prepare a schedule of cash;disbursements for merchandise purchases for December.;3] Prepare a cash budget for December.;Indicate in the financing section any borrowing that will be needed during the;month. Assume that no interest payments are due or will be paid before January.

Paper#38891 | Written in 18-Jul-2015

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