I KNOW IT IS QUITE LONG BUT ALL I REALLY NEED IS SOME GUIDANCE IN TERMS OF FORMU
ID: 2509420 • Letter: I
Question
I KNOW IT IS QUITE LONG BUT ALL I REALLY NEED IS SOME GUIDANCE IN TERMS OF FORMULAS. I NEED TO KNOW WHAT EACH ITEM ENCOMPASESS.
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Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. $15 Sales price per birdfeeder 1.5 Board feet of wood required for each birdfeeder $4 Cost per board foot (actual) 10% Desired ending wood inventory stated as a percentage of next month's production requirements 20% Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month's sales $550,000 Total cost of direct materials purchases in December 45% of direct materials purchases are paid in the month of purchase 55% of direct materials purchases are paid in the month after purchase Sales data for the company can be found on the "SALESDATA" tab. Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. Requirements Prepare the sales budget, including a separate section that details the type of sales made (cash versus credit) for the first three months of the year, as well as a summary budget for the quarter 2 Prepare the production budget for the first three months of the year, as well as a summary budget for the quarter a. Enter all amounts as positive values. Do NOT use parentheses or a minus sign for amounts to be subtracted. Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April. a. Enter all amounts as positive values. Do NOT use parentheses or a minus sign for amounts to be subtracted. Abbreviation used: DM b. Direct materials 4 Prepare the cash collections budget for January, February, and March, as well as a summary for the first quarter 5 Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the first quarterExplanation / Answer
Birdfeeder's Unlimited Requirement 1 Monthly Sales Budgets January February March 1st Quarter Sales in units 80000 90000 95000 265000 Sales price 15 15 15 Sales Revenue in 1200000 1350000 1425000 3975000 Cash Sales 240000 270000 285000 795000 Credit Sales 960000 1080000 1140000 3180000 Total Sales 1200000 1350000 1425000 3975000 2 Monthly production Budgets January February March 1st Quarter Sales in units 80000 90000 95000 265000 Plus Desired ending inventory 18000 19000 21000 21000 Total needed 98000 109000 116000 286000 Less Beginning Inventory 16000 18000 19000 16000 Number of units to produce 82000 91000 97000 270000 3 Monthly Mechandise Purchase Budgets January February March 1st Quarter Number of units to produce 82000 91000 97000 270000 Multiply by Quantity(Board feet) of DM needed per unit 1.50 1.50 1.50 1.50 Quantity(Board feer) needed for production 123000 136500 145500 405000 Plus Desired ending inventory 13650 14550 12000 12000 Total needed 136650 151050 157500 417000 Less Beginning Inventory 12300 13650 14550 12300 Quantity(Board feet) to purchase 124350 137400 142950 404700 Multiply by cost per board feet 4 4 4 4 Total cost of DM Purchases 497400 549600 571800 1618800 4 Calculation of cash receipts from customers Monthly Sales Budgets January February March 1st Quarter Sales Revenue in 1200000 1350000 1425000 3975000 Cash sales in the current month 240000 270000 285000 795000 Collection on credit sales Accounts Receivable -January 1 Credit sales from Credit sales made one month ago 748800 768000 864000 2380800 Credit sales made two month ago 102000 93600 96000 291600 Credit sales made three month ago 66240 61200 56160 183600 Total cash collection 1157040 1192800 1301160 3651000 5 Calculation of payment to suppliers January February March 1st Quarter Total cost of DM purchases 497400 549600 571800 1618800 Cash Payment for current month's purchases 223830 247320 257310 728460 Cash Payment for prior month's purchases 302500 273570 302280 878350 Total Cash payment 526330 520890 559590 1606810
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