ezto.mheducation.com/hm.tpx?todozc15Si ingleQuestionNo: 1.&postSubmissionView; =
ID: 2544011 • Letter: E
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ezto.mheducation.com/hm.tpx?todozc15Si ingleQuestionNo: 1.&postSubmissionView; = 13252707378067937&wid;=132527073921 95729&role-student;&pid;=23460604… . Award: 50.00 points You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget tor the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below The company sells many styles o earringS, but all are sold for the same price--$15 per pair. Actual sales of earrings tor the last three months and budgeted sales tor the next six months follow (in pairs of earrings) January (actual) February (actual) March (actual) April (budget) 22,200 June (budget) 28,200 July (budget) 42,200 August (budget) 67,200 September (budget) 52,200 32,200 30,200 27,200 102,200 The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $5.10 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase: the other half is paid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible Monthly operating expenses for the company are given below Variable 4% of sales Fixed $ 310,000 S 29,000 S 128,000 S 12,500 5 4,100 S 25,000 Rent Utilities Insurance 4:50 PM O Type here to search 3/15/2018Explanation / Answer
Per Chegg guidelines, 4 sub-parts have been answered.
1A Sales Budget April May June Quarter Budgeted sales units 67200 102200 52200 221600 Selling price per unit $ 15 15 15 15 Total sales $ 1008000 1533000 783000 3324000 1B Earrings Unlimited Schedule of Expected Cash Collections April May June Quarter February sales 42300 42300 March sales 443100 63300 506400 April sales 201600 705600 100800 1008000 May sales 306600 1073100 1379700 June sales 156600 156600 Total cash collections $ 687000 1075500 1330500 3093000 1C Earrings Unlimited Merchandise Purchases Budget April May June Quarter Budgeted unit sales 67200 102200 52200 221600 Add: Desired ending merchandise inventory 40880 20880 12880 12880 Total needs 108080 123080 65080 234480 Less: Beginning merchandise inventory 26880 40880 20880 26880 Required purchases 81200 82200 44200 207600 Unit cost $ 5.10 5.10 5.10 5.10 Required dollar purchases $ 414120 419220 225420 1058760 1D Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts payable 111000 111000 April purchases 207060 207060 414120 May purchases 209610 209610 419220 June purchases 112710 112710 Total cash payments $ 318060 416670 322320 1057050Related Questions
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