Hi this is the 3rd time ive posted this. Can someone please help me with E F and

Question

Hi this is the 3rd time ive posted this. Can someone please help me with E F and G. Thank you!!

Problem 1 - Master Budget (30 points) - ABC Company makes bookstands and expects the followin sales and cash collections for the first three months of 2019 January February March Sales in # Of Bookstands 6,400 5,200 7,400 Revenue in Dollars $128,000 $104,000 $148,000 Cash Collections 123,000 93,000 $140,000 Sales for April and May are expected to be 8,000 bookstands per month The following balances were taken from the December 31, 2018 balance sheet: Cash, $18,320; Raw Material Inventory, $8,230; Finished Goods Inventory, $23,200; and Accounts Payable, $5,800. The Raw Material Inventory balance consists of 1,580 pounds of scrap iron and 1,200 bookstand bases. The Finished Goods Inventory consists of 1,220 bookstands. Each bookstand requires two pounds of scrap iron, which costs $3 per pound. Each bookstand requires one bookstand base which cost $2.50 per unit. Beginning in 2019, management has decided that the ending inventory of raw materials should be 25% of the following month's production requirements Management has also decided that the ending balance in Finished Goods Inventory should be 20% of the next month's sales The company pays for 75% of a month's purchases of raw materials in the month of purchase. The remaining 25% is paid in the month following purchase. Direct labor is budgeted at $0.70 per bookstand produced and is paid in the month of production. Total cash manufacturing overhead is budgeted at $14,000 per month plus $1.30 per bookstand Total cash selling and administrative costs equal $13,600 per month plus 10% of sales revenue. These costs are all paid in the month of incurrence. In addition, the company plans to pay executive bonuses of $35,000 in January of 2019 and make an estimated quarterly tax payment of $5,000 in March of 2019 Management requires a minimum cash balance of $10,000 at the end of each month. If the company borrows funds, it will do so only in $1,000 multiples at the beginning of a month at a 12% annua interest rate. Loans are to be repaid at the end of a month in multiples of $1,000. Interest is paid only when a repayment is made.

Explanation / Answer

Following working notes has been used to arrive at the above budgets

Cash payment Schedule for Manufacturing overhead cash costs April May June Total Variable Overhead 8008 7332 9776 25116 Fixed Overhead 14000 14000 14000 42000 Total Overhead paid in cash 22008.00 21332.00 23776.00 67116 Cash payment schedule for Selling & administrative overhead cash costs April May June Total Variable Overhead 12800 10400 14800 38000 Fixed Overhead 13600 13600 13600 40800 Total Overhead paid in cash 26400.00 24000.00 28400.00 78800 Cash Budget April May June Total Beginning Balance 18320 10358.75 10313.75 18320 Add : Receipt from customer 123000 93000 140000 356000 Total Cash available 141320 103358.75 150313.8 374320 Less : Payments for purchases In the month of purchase 38441.25 38951.25 48705 126097.5 Month following the purchase 5800 12813.75 12983.75 31597.5 for direct labor 4312 3948 5264 13524 Manufacturing Overhead 22008.00 21332.00 23776.00 67116 Selling & Administrative expenses 26400.00 24000.00 28400.00 78800 Bonus to executives 35000.00 35000 Quarterly tax payments 5000.00 5000 Total payments 131961.3 101045 124128.8 357135 Surplus/(Deficiency) 9358.75 2313.75 26185 Minimum balance required 10000 10000 10000 Borrowal 1000 8000 Repayment 0 9000 Interest paid 100 100 Ending balance 10358.75 10313.75 17085 17085

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