Clay Corporation has projected sales and production in units for the second quar
ID: 2462797 • Letter: C
Question
Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows: AprilMay 61,000 51,000 71,000 65,500 55,500 55,500 une Sales Production Required: a. Cash-related production costs are budgeted at $6.1 per unit produced. Of these production costs, 30% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $210,000 per month. The accounts payable balance on March 31 totals $300,000, which will be paid in April. Prepare a schedule for each month showing budgeted cash disbursements for Clay Corporation. April Ma ay June $ 399,550 $ 338,550 S 338,550 Production cost Cash disbursement: 119,865 Production costs this month Production costs prior month Selling and administrative 101.565 263.985 210,000 S 329865 591.250S 575,550 101,565 279685 210,000 210,000 Total disbursementsExplanation / Answer
a.
Schedule for Budgeted cash disbursement:
April
May
June
Production Cost
$ 399,550
$ 338,550
$ 338,550
(65500*6.1)
(55500*6.1)
(55500*6.1)
Cash Disbursement:
Production Costs this month
$ 119,865
$ 101,565
$ 101,565
(399550*30%)
(338550*30%)
(338550*30%)
Production Costs Prior month
$ 279,685
$ 236,985
(399550*70%)
(338550*70%)
Selling and Administrative
$ 210,000
$ 210,000
$ 210,000
Total Disbursements
$ 329,865
$ 591,250
$ 548,550
b.
Schedule for Budgeted cash receipts:
April
May
June
Total Sales
$ 921,100.00
$ 770,100.00
$ 1,072,100.00
(61000*15.10)
(51000*15.10)
(71000*15.10)
Cash receipts:
February Sales
$ 101,000.00
March Sales
$ 371,428.57
$ 148,571.43
(520000/35%)*25%
(520000/35%)*10%
April Sales
$ 598,715.00
$ 230,275.00
$ 92,110.00
(921100*65%)
(921100*25%)
(921100*10%)
May Sales
$ 500,565.00
$ 192,525.00
(770100*65%)
(770100*25%)
June Sales
$ 696,865.00
(1072100*65%)
Total receipts
$ 1,071,143.57
$ 879,411.43
$ 981,500.00
a.
Schedule for Budgeted cash disbursement:
April
May
June
Production Cost
$ 399,550
$ 338,550
$ 338,550
(65500*6.1)
(55500*6.1)
(55500*6.1)
Cash Disbursement:
Production Costs this month
$ 119,865
$ 101,565
$ 101,565
(399550*30%)
(338550*30%)
(338550*30%)
Production Costs Prior month
$ 279,685
$ 236,985
(399550*70%)
(338550*70%)
Selling and Administrative
$ 210,000
$ 210,000
$ 210,000
Total Disbursements
$ 329,865
$ 591,250
$ 548,550
b.
Schedule for Budgeted cash receipts:
April
May
June
Total Sales
$ 921,100.00
$ 770,100.00
$ 1,072,100.00
(61000*15.10)
(51000*15.10)
(71000*15.10)
Cash receipts:
February Sales
$ 101,000.00
March Sales
$ 371,428.57
$ 148,571.43
(520000/35%)*25%
(520000/35%)*10%
April Sales
$ 598,715.00
$ 230,275.00
$ 92,110.00
(921100*65%)
(921100*25%)
(921100*10%)
May Sales
$ 500,565.00
$ 192,525.00
(770100*65%)
(770100*25%)
June Sales
$ 696,865.00
(1072100*65%)
Total receipts
$ 1,071,143.57
$ 879,411.43
$ 981,500.00
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