g Company abor, and d. The urred. Suggested time -8 marks11 minutes Flood Co. ma

Question

g Company abor, and d. The urred. Suggested time -8 marks11 minutes Flood Co. manufactures and sells a sand bag called STOP. The following data are available for preparing production, purchasing, and cash budgets for STOP for the first two months of the year. Sales: January, 14,000 bags; February, 21,000 bags. Selling price is $75 per bag. Direct material: Each bag of STOP requires 3 kilograms of direct material at $1 per kilogram. Desired inventory levels: Type of inventory STOP (bags) Direct material (kg) 14,175 Feb 1 March 5,250 18,225 (4 marks) ovember. (3 January 3,500 4,500 15,300 s down akes .3 hours is $8 per th, Go Go ng the ed a total of a) How many bags of STOP is Flood budgeted to produced in January? Show calculations. (2 marks) b) How many kilograms of direct material is Flood budgeted to purchase in c) February? Show calculations. (2 marks) All of Food's sales are on account. Flood collects 70% of its accounts receivable in the month of sale and the remainder in the next quarter. What are Flood's budgeted cash collections in February? Show calculations. (2 marks). icate d] All of Flood's purchases of direct material are on account. Flood pays 80% of its accounts payable in the month of purchase and the remainder in the next month. What are Flood's budgeted cash payments in February Show cdculations. (2 marks) e whether

Explanation / Answer

(a) Sales for january           14,000 Inventory as on Feb 1             5,250 (closing inventory) Inventory as on Jan 1            (3,500) (opening inventory) Bags budgeted to be produced in January           15,750 Material required in production           47,250 (15,750 * 3 kgs) Inventory as on Feb 1           18,225 Inventory as on Jan 1          (14,175) Kgs of direct material budgeted to be purchased in January           51,300 (b) Sales for February           14,000 Inventory as on March 1             4,500 (closing inventory) Inventory as on Feb 1           (5,250) (opening inventory) Bags budgeted to be produced in February           13,250 Material required in production           39,750 (13,250 * 3 kgs) Inventory as on March 1           15,300 Inventory as on Feb 1          (18,225) Kgs of direct material budgeted to be purchased in February           36,825 © Sales for january collected in February $315,000 (14000 bags * $75 per bag * 30%) Sales for february collected in same month $1,102,500 (21000 bags * $75 per bag *70%) Total collections in February $1,417,500 (d) Purchases of materials of january paid in febraury $10,260 (51300 kgs * $1 per kg * 20%) Purchases of materials of february paid in same month $29,460 (36825 kgs * $1 per kg * 80%) Total payments in February $39,720

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.