Question

Kraft budgeted sales are $10,000 per month and let's assume the sales stay the same every...

Kraft budgeted sales are $10,000 per month and let's assume the sales stay the same every month. Its customers pay Kraft based on the following pattern: 20% will pay in the month of sales and take a 3% discount, the remaining customers pay in the month following the sale and take a 1% discount (even though they shouldn't). Kraft has no bad debt on its collection. Kraft inventory purchase every month is based on 30% of next month's projected sales and it pays for the inventory purchase immediately. "Other payments," which include salaries, rent and supplies, are always 45% of sales for the month. Construct a cash budget for a typical month (Hint: ignore the first month, what does the monthly cash budget look like for month 2 or month 3). What is the average cash gain or loss during the month?

a) -$2,180

b) $2,750

c) $1,740

d) $2,360

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Steady Eddie Corp. is constructing its cash budget. Its budgeted monthly sales are $4,000, and they...
Steady Eddie Corp. is constructing its cash budget. Its budgeted monthly sales are $4,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," which include wages,...
Capital Industries budgeted monthly sales are $15,000, and they are constant from month to month. 25%...
Capital Industries budgeted monthly sales are $15,000, and they are constant from month to month. 25% of its customers pay in the first month and take the 2% discount, while the remaining 75% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month’s sales are constant at 40% of projected sales for the next month. “Other payments,” which include wages and rent, are 15% of sales for...
Month    Budgeted Cash Sales Budgeted Credit Sales Budgeted Cash Purchases Budgeted Credit Purchases December 8,000 21,000...
Month    Budgeted Cash Sales Budgeted Credit Sales Budgeted Cash Purchases Budgeted Credit Purchases December 8,000 21,000 January 9,000 23,000 February 11,000 25,000 March 77,800 12,000 12,000 22,000 March 68,500 12,500 12,500 23,500 May 72,000 12,300 12,300 24,500 Wages & other operating expenses are estimated as follows: Month Wages Other Expenses March 20,000 28,000 April 17,500 22,000 May 20,000 23,000  Newequipment purchased in February for $16,750 istobepaid forin April.  New furniture purchased in March for $15,000 isto be paid...
Maleficent Company Limited is preparing budget based on the information below. 1. Budget sales revenues: January...
Maleficent Company Limited is preparing budget based on the information below. 1. Budget sales revenues: January February March $ $ $ Credit sales 550,000 450,000 650,000 Cash sales 65,000 55,000 55,000 Total sales 615,000 505,000 705,000 Past experience indicates that customers usually settle their balances as follows: - 60% of a month's credit sales are collected in the month of sale; and - the remaining 40% of a month's credit sales are collected in the following month. All purchases are...
LO 4 Joshua Studios expects the following sales in March, April, and May: Cash Sales Credit...
LO 4 Joshua Studios expects the following sales in March, April, and May: Cash Sales Credit Sales March $55,000 $240,000 April 50,000 250,000 May 75,000 300,000 The controller has determined that the company collects credit sales in the following pattern: 30% in the month of sale, 50% in the first month after sale, 10% in the second month after sale, and 10% uncollectible. How much cash will be collected from customers in May?(a) $ 75,000 (b) $239,000 (c) $290,000 (d)...
Managerial Accounting Case 2 McMurray & Sons is a retailer of stuffed animals.   All items in...
Managerial Accounting Case 2 McMurray & Sons is a retailer of stuffed animals.   All items in the store sell for the same $18 selling price. McMurray estimates that 25% of its sales are for cash and 75% are on account. Other information regarding the company's budgeted sales and collection of credit sales are as follows: Budgeted sales in units      Credit Sales Collection Pattern December           9,000 Collected in same month as sale 50% January           1,000 Collected 1 months...
Q1    The following are budgeted data: January February March Sales in units 16,900 23,800 19,900...
Q1    The following are budgeted data: January February March Sales in units 16,900 23,800 19,900 Production in units 19,900 20,900 20,000 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be: Garrison 16e Rechecks 2017-10-03 Multiple Choice 21,125 pounds 20,575 pounds 18,225 pounds 20,675 pound Q2    The manufacturing...
Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow. Units...
Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow. Units Dollars April (actual) 4,500 $ 810,000 May (actual) 2,200 396,000 June (budgeted) 7,500 1,350,000 July (budgeted) 5,000 900,000 August (budgeted) 3,600 648,000 All sales are on credit. Recent experience shows that 30% of credit sales is collected in the month of the sale, 40% in the month after the sale, 29% in the second month after the sale, and 1% proves to be uncollectible....
1. Prepare a sales budget for January through May. The selling price per unit is $40.00....
1. Prepare a sales budget for January through May. The selling price per unit is $40.00. December of the previous year-40,000 January-90,000 February-80,000 March-70,000 April-40,000 2. Prepare a purchases budget for January through March, and the first quarter in total. Assume that the company only sells one product that can be purchased at $15.00 per unit. The market for this product is very competitive and customers highly value service such as quality and on time delivery of the product. Also...
SELLING PRICE RM 29.99 COST PER UNIT RM 20.88 DIRECT MATERIAL per unit - Stirrer RM...
SELLING PRICE RM 29.99 COST PER UNIT RM 20.88 DIRECT MATERIAL per unit - Stirrer RM 0.50 - Mug RM 2.00 - Battery RM 1.10 - Thermometer RM 3.50 = RM 7.10 MATERIALS PER UNIT - Stirrer 1 - Battery 2 - Mug 1 - TOTAL MPU = 4 INDIRECT MATERIAL per unit - Spring RM 1.00 - Skru RM 0.14 = RM 1.14 PRODUCT COSTS per QUARTER FIXED MOH - Research and Development RM 2500 - Indirect Labor RM...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT