6

CHAPTER 6: OPERATIONA OPERATIONAL L AND FINANCIAL BUDGETING Problems 1. Ballan Inc. estimates its units sales for the coming months to be as follows: March April May June July August

 

280,000 260,000 250,000 230,000 240,000 225,000

Ballan maintains maintains inventory at budgeted sales needs for the next month. March 1 inventory will be 248!!! units. a. "re#are a monthly #urchasing schedule for March through $uly. %&'()I&*: a. March arch #urc #urcha hase ses: s:

2+2 2+2!! !!! ! unit units s ,28! 28!!! !!! ! - 2! 2!!! !!! ! / 248 248!! !!!0 !0

#ril #ril #urchas #urchases: es: 2!!! 2!!!! ! units units ,2!! ,2!!!! !! - 2!!! 2!!!! ! / 2!!! 2!!!!0 !0 May #urchases:

23!!!! units ,2!!!! - 23!!!! / 2!!!!0

$une #urchases: 24!!!! units ,23!!!! - 24!!!! / 23!!!!0 $uly #urchases: #urchases: 22!!! 22!!! units ,24!!!! ,24!!!! - 22!!! 22!!! / 24!!!!0 24!!!!0 2. %u#erior om#any manufactures a single #roduct. It 5ee#s its inventory inventory of finished goods at twice the coming month6s budgeted sales and inventory of raw materials at 1!7 of the coming month6s budgeted #roduction. ach unit of #roduct re9uires five #ounds of materials which cost 3 #er #ound. )he sales budget is in units: May May 1!!!!; $une 124!!; $uly $uly 12!!; ugust 132!!. a. om#ute budgeted #roduction for $une. b. om#ute budgeted #roduction for $uly. c. om#ute budgeted material #urchases for $une in #ounds and dollars.

%&'()I&*: a. $une #roduction: 128!! units ,124!! - fourth the coming month6s budgeted sales re9uirements. It #ays for #urchases 4!7 in the month of #urchase and !7 in the month after #urchase. ccounts "ayable is +48!! on March 1. a. "re#are a monthly #urchasing schedule for March March through May. b. "re#are a monthly cash #ayment schedule for March through May. c.

om# om#ut ute e the the acco accoun unts ts #ayab #ayable le bala balance nce as of May May 31. 31.

%&'()I&*: a.  ales ! 55 &  o s t o 9  a l es  $nd in g 1 n % ' e g 1n %  urch ases

b. Marc March h #aym #aymen ents ts::

 #ril #ayments:

M a rc h .300 ,000 ! 5 5 ' ' ' ' '' '' ."65 ,000 42 ,+0 0 ( 4 " , 25 0 # ' ' ' ' '' '' . " 6 6 , 65 0      

Apri l . 3 " 2, 0 0 0 !  55 ' ''''' '' . ")",6 00 44,0 0 0 (42,+ 00 # ' ''''' '' . ")2,) 00   

May .32 0,000 ! 55 ''' ''''' . " ) 6, 00 0 5 ",+)5 (4 4 , 0 0 0 # ''' ''''' ."8 3,+)5  

(40& ! "66,650#  . 66,660 Mar " Acct ay  +4,800   '''''''  ."6",460   (40& ! ")2,)00#  . 6+,080 (60& ! "66,650#  ++,++0   '''''''  ."6+,0)0

 HHHHHHHH May #ayments:

(40& ! "83,+)5#  (60& ! ")2,)00# 

. )3,5+0 "03,620   '''''''  .")),2"0  

c. ccounts ccounts "ayable "ayable May 31: 11!38,! 11!38,!7 7 x 183+?0 183+?0 1!. ic5s om#any has the following sales #roEections for 2!4: J anua ry . "60,0 00  e b r u a r y " 68 ,0 0 0

Mar ch Apr il

")5,0 00 "80,0 00

Ma y Jun e

" +5,00 0 " +0,00 0

ic5s collects 3!7 of its sales in the month of sale 47 in the month following the sale and 247 in the second month following the sale. Decords show that sales were 1!!!! in *ovember and 18!!! in Fecember 2!3. a.

"re#are "re#are a sche schedul dule e of cash cash rece recei#t i#ts s for the first first three three months months of 2!4. 2!4.

b.

Ahat would would be the account accounts s recei receivab vable le balanc balance e