The Black Bean Company processes and distributes beans. The beans are packed in
ID: 2460950 • Letter: T
Question
The Black Bean Company processes and distributes beans. The beans are packed in 1-pound plastic bags and sold to grocery chains for $0.50 each in boxes of 100 bags. Sales in February were 14,000 boxes, and the firm anticipates selling 16,000 boxes during March. Typically, 80% of the firm’s customers pay within the month of sale, 18% of the customers pay the month after, and 2% of sales are never collected.
Most of the processing is done automatically. Consequently, most ($80,000) of the firm’s factory overhead is depreciation expense.
The firm advertises heavily and will publish $75,000 worth of advertisements in popular magazines during March. This is up from February’s $60,000 for advertisements. The firm pays for 10% of its advertising in the month the advertisements are run and 90% in the next month. Following are March’s budgeted Income Statement and Statement of Cost of Goods Manufactured and Sold. All costs and expenses are paid for as incurred unless specifically indicated otherwise above. The firm will begin March with a cash balance of $25,000 and pays a monthly dividend of $15,000 to owners.
BUDGETED INCOME STATEMENT
Sales $800,000
Cost of Goods Sold 540,000
Gross Margin $260,000
Administrative Salaries 80,000
Sales Commissions 69,000
Advertising 75,000
Bad Debt Expense 16,000
Operating Income $ 20,000
BUDGETED STATEMENT OF COST OF GOODS MANUFACTURED AND SOLD
Beginning Balance Direct Materials $ 20,000
Direct materials purchases 330,000
Materials available for use $350,000
Ending balance direct materials 30,000
Direct materials used $320,000
Labor costs incurred 90,000
Overhead costs 115,000
Cost of goods manufactured $525,000
Beginning finished goods balance 45,000
Goods available for sale $570,000
Ending finished goods balance 30,000
Cost of Goods Sold $540,000
Required From the information provided, prepare a cash receipts and disbursements budget for March.
Explanation / Answer
Cash reciept budget for the month of march
Cash disbursement budget
Total Amount ($) Collection for february 700000 126000 Collection for march 800000 640000 Total reciepts 766000Related Questions
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