PROBLEM 9-37

1. Sales budget for 20x0:

Units Price TotalLight coils........................................................................ 60,000 $65 $3,900,000Heavy coils...................................................................... 40,000 $95 3,800,000Projected sales............................................................... $7,700,000

2. Production budget (in units) for 20x0:

Light Coils Heavy CoilsProjected sales........................................................................................ 60,000 40,000Add: Desired inventories,

December 31, 20x0............................................................................. 25,000 9,000Total requirements.................................................................................. 85,000 49,000Deduct: Expected inventories, January 1, 20x0................................... 20,000 8,000Production required (units).................................................................... 65,000 41,000

3. Raw-material purchases budget (in quantities) for 20x0:

Raw MaterialSheetMetal

Copper WirePlatforms

Light coils (65,000 units projected to be produced)........................................................ 260,000 130,000 __

Heavy coils (41,000 units projectedto be produced)........................................................ 205,000 123,000 41,000

Production requirements............................................... 465,000 253,000 41,000Add: Desired inventories, December 31, 20x0............. 36,000 32,000 7,000Total requirements......................................................... 501,000 285,000 48,000Deduct: Expected inventories,

January 1, 20x0........................................................ 32,000 29,000 6,000Purchase requirements (units)...................................... 469,000 256,000 42,000

4. Raw-material purchases budget for 20x0:

Raw Material

Raw Material Required

(units)

Anticipated Purchase

Price TotalSheet metal.................................................................... 469,000 $8 $3,752,000Copper wire................................................................... 256,000 5 1,280,000Platforms....................................................................... 42,000 3 126,000Total............................................................................... $5,158,000

5. Direct-labor budget for 20x0:

ProjectedProduction

(units)

HoursperUnit

Total Hours Rate

TotalCost

Light coils.......................................... 65,000 2 130,000 $15 $1,950,000Heavy coils........................................ 41,000 3 123,000 20 2,460,000Total................................................... $4,410,000

6. Manufacturing overhead budget for 20x0:

Cost Driver Quantity

Cost Driver Rate

Budgeted Cost

Purchasing and material handling.............................. 725,000 lb.a $.25 $181,250Depreciation, utilities, and inspection........................ 106,000 coils b $4.00 424,000Shipping......................................................................... 100,000c $1.00 100,000General manufacturing overhead................................ 253,000 hr. d $3.00 759,000

Total manufacturing overhead..................................... $1,464,250

a725,000 = 469,000 + 256,000 (from req. 3)b106,000 = 65,000 + 41,000 (from req. 2)c100,000 = 60,000 + 40,000 (total units sold, from problem)d253,000 = 130,000 + 123,000 (from req. 5)

PROBLEM 9-35

1. Sales budget

April May JuneSales (in sets).................................................... 10,000 12,000 15,000Sales price per set............................................ $50 $50 $50 Sales revenue.................................................... $500,000 $600,000 $750,000

2. Production budget (in sets)

April May JuneSales................................................................... 10,000 12,000 15,000Add: Desired ending inventory........................ 2,400 3,000 3,000 Total requirements............................................ 12,400 15,000 18,000Less: Projected beginning inventory.............. 2,000 2,400 3,000 Planned production........................................... 10,400 12,600 15,000

3. Raw-material purchases

April May JunePlanned production (sets)................................... 10,400 12,600 15,000Raw material required per set

(board feet)....................................................... 10 10 10 Raw material required for production

(board feet)....................................................... 104,000 126,000 150,000Add: Desired ending inventory of raw

material (board feet)........................................ 12,600 15,000 16,000 Total requirements............................................... 116,600 141,000 166,000Less: Projected beginning inventory of

raw material (board feet)................................. 10,400 12,600 15,000 Planned purchases of raw material

(board feet)....................................................... 106,200 128,400 151,000Cost per board foot.............................................. $.50 $.50 $.50 Planned purchases of raw material

(dollars)............................................................. $ 53,100 $ 64,200 $ 75,500

4. Direct-labor budget

April May JunePlanned production (sets)................................... 10,400 12,600 15,000Direct-labor hours per set.................................... 1.5 1.5 1.5 Direct-labor hours required................................. 15,600 18,900 22,500Cost per hour........................................................ $20 $20 $20 Planned direct-labor cost.................................... $312,000 $378,000 $450,000

PROBLEM 9-31

1. Schedule of cash collections:January February March

Collection of accounts receivable:$55,000 x 20%…………………………... $ 11,000

Collection of January sales ($150,000):60% in January; 35% in February ….. 90,000 $ 52,500

Collection of February sales ($180,000):60% in February; 35% in March…….. 108,000 $ 63,000

Collection of March sales ($185,000):60% in March; 35% in April………….. 111,000

Sale of equipment…………………………. 5,000Total cash collections………………… $101,000 $160,500 $179,000

2. Schedule of cash disbursements:January February March

Payment of accounts payable………………... $ 22,000Payment of January purchases ($90,000):

70% in January; 30% in February……….. 63,000 $ 27,000Payment of February purchases ($100,000):

70% in February; 30% in March………….. 70,000 $ 30,000Payment of March purchases ($140,000):

70% in March; 30% in April……………….. 98,000Cash operating costs………………………….. 31,000 24,000 45,000

Total cash disbursements………………... $116,000 $121,000 $173,000

3. Schedule of cash needs:January February March

Beginning cash balance………………………. $ 20,000 $ 20,000 $ 44,300Total receipts……………………………………. 101,000 160,500 179,000

Subtotal………………………………………. $121,000 $180,500 $223,300Less: Total disbursements…………………… 116,000 121,000 173,000Cash excess (deficiency) before financing… $ 5,000 $ 59,500 $ 50,300Financing:

Borrowing to maintain $20,000 balance.. 15,000Loan principal repaid……………………… (15,000)Loan interest paid………………………….. (200)*

Ending cash balance…………………………… $ 20,000 $ 44,300 $ 50,300

* $15,000 x 8% x 2/12

Problem : 9.25

1. BINGHAMTON FILM CORPORATION

EXPECTED CASH COLLECTIONS

AUGUST

Month Sales PercentExpected

CollectionsJune.................................................... $60,000 9% $ 5,400July..................................................... 78,000 20% 15,600August................................................ 66,000 70% 46,200

Total............................................... $67,200

2. BINGHAMTON FILM CORPORATION

EXPECTED CASH DISBURSEMENTS

AUGUST

July purchases to be paid in August............................................................. $ 54,000Less: 2% cash discount.................................................................................. 1,080

Net................................................................................................................. $ 52,920Cash disbursements for expenses................................................................ 14,400

Total.............................................................................................................. $ 67,320

3. BINGHAMTON CORPORATION

EXPECTED CASH BALANCE

AUGUST 31

Balance, August 1........................................................................................... $ 22,000Add: Expected collections.............................................................................. 67,200Less: Expected disbursements...................................................................... 67,320

Expected balance........................................................................................ $ 21,880