HW 8 Help Save& Exit Submi 4 Check my work You have just been hired as a new man
ID: 2551292 • Letter: H
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HW 8 Help Save& Exit Submi 4 Check my work 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 rained in budgeting. you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below. 15 points The company sells many styles of earrings, but all are sold for the same price- -$18 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings Skipped January (actual) February (actual) March (actual) April (budget) May (budget) 22, 800 June (budget ) 28,800 July (budget ) 42,800 August (budget) 67,800September (budget)27,800 52,800 32,800 30,800 eBook Print 102,800 References 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. Suppilers are paid $5.40 for a pair of earrings One-haif of a month's purchases is paid for in the month of purchase; the other half is . Only 20% of a month's sales are collected in the month ofsale. An additional paid for in the following month. All sales are on credit 70% is collected in the following month and the remaining 0% is collected in the second month following sale Bad Odes ha e been negligible Monthly operating expenses for the company are given below 41 of aales Sales comiasion AdvertLeing Salazie Fixed s 340,000 0 s 134 000 $ 14 000 s 132.00 44/00 vsilicses 828 000 K Prev4 oExplanation / Answer
January
Februry
March
April
May
June
July
22800
28800
42800
67800
102800
52800
32800
Sales Budget
April
May
June
Quarter
Budgeted Unit Sales
67800
102800
52800
223400
Selling Price per unit
$ 18
$ 18
$ 18
$ 18
Total sales
$ 1,220,400
$ 1,850,400
$ 950,400
$ 4,021,200
=67800*18
Schedule of Expected cash Collection
April
May
June
Quarter
February Sales
$ 51,840
$ 51,840
March sales
$ 539,280
$ 77,040
$ 616,320
April Sales
$ 244,080
$ 854,280
$ 122,040
$ 1,220,400
May Sales
$ 370,080
$ 1,295,280
$ 1,665,360
June Sales
$ 190,080
$ 190,080
Total Cash Collecton
$ 835,200
$ 1,301,400
$ 1,607,400
$ 3,744,000
Merchandise Purchase Budget
April
May
June
Quarter
July
Budgeted unit sales
67800
102800
52800
223400
32800
Add: Desired ending inventory
41120
21120
13120
13120
Total Needs
108920
123920
65920
236520
Less: Beginning Inventory
27120
41120
21120
27120
Required Purchases
81800
82800
44800
209400
Unit Cost
$ 5
$ 5
$ 5
$ 5
Required Dollar Purchases
$ 441,720
$ 447,120
$ 241,920
$ 1,130,760
Budgeted cash Disbursements for Merchandise Purchases
April
May
June
Quarter
accounts Payable
$ 114,000
$ 114,000
April Purchases
$ 220,860
$ 220,860
$ 441,720
May Purchases
$ 223,560
$ 223,560
$ 447,120
June Purchases
$ 120,960
$ 120,960
Total disbursements
$ 334,860
$ 444,420
$ 344,520
$ 1,123,800
January
Februry
March
April
May
June
July
22800
28800
42800
67800
102800
52800
32800
Sales Budget
April
May
June
Quarter
Budgeted Unit Sales
67800
102800
52800
223400
Selling Price per unit
$ 18
$ 18
$ 18
$ 18
Total sales
$ 1,220,400
$ 1,850,400
$ 950,400
$ 4,021,200
=67800*18
Schedule of Expected cash Collection
April
May
June
Quarter
February Sales
$ 51,840
$ 51,840
March sales
$ 539,280
$ 77,040
$ 616,320
April Sales
$ 244,080
$ 854,280
$ 122,040
$ 1,220,400
May Sales
$ 370,080
$ 1,295,280
$ 1,665,360
June Sales
$ 190,080
$ 190,080
Total Cash Collecton
$ 835,200
$ 1,301,400
$ 1,607,400
$ 3,744,000
Merchandise Purchase Budget
April
May
June
Quarter
July
Budgeted unit sales
67800
102800
52800
223400
32800
Add: Desired ending inventory
41120
21120
13120
13120
Total Needs
108920
123920
65920
236520
Less: Beginning Inventory
27120
41120
21120
27120
Required Purchases
81800
82800
44800
209400
Unit Cost
$ 5
$ 5
$ 5
$ 5
Required Dollar Purchases
$ 441,720
$ 447,120
$ 241,920
$ 1,130,760
Budgeted cash Disbursements for Merchandise Purchases
April
May
June
Quarter
accounts Payable
$ 114,000
$ 114,000
April Purchases
$ 220,860
$ 220,860
$ 441,720
May Purchases
$ 223,560
$ 223,560
$ 447,120
June Purchases
$ 120,960
$ 120,960
Total disbursements
$ 334,860
$ 444,420
$ 344,520
$ 1,123,800
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