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Projected unit sales: June sales 120,000, July sales 130,000, August 140,000, September 150,000 and October sales...

  1. Projected unit sales: June sales 120,000, July sales 130,000, August 140,000, September 150,000 and October sales 170,000.
  2. Sales price per unit, $15.00
  3. Units in ending inventory each month should equal 10% of next month sales.
  4. Raw material required per unit is 2 pounds; cost is $3.00 per lb.
  5. Ending inventory required at the end of each month is 5% of next month needs.
  6. Direct labor required to produce one units is .25 direct labor hour. The hourly rate is $10.00.
  7. Sales and administrative expenses are projected to be: salaries $275, 000 per month, commissions 2% of sales dollars and other expenses are expected to be $75,000 per month plus 3% of sales dollars.
  8. Forty percent of the sales are collected in the month of sales and 60 percent in the month following.
  9. Thirty percent of raw materials purchases are paid in in the month of purchase and 70 percent in the month following.
  10. Manufacturing overhead costs:
  1. Indirect labor, $3.00 per direct labor hour,
  2. Indirect materials are $1.00 per unit produced,
  3. Utilities are $1.00 per direct labor hour,
  4. Maintenance cost are $0.50 per direct labor hour,
  5. Supervisor salaries are $40,000 per month,
  6. Depreciation is $10,000 per month,
  7. Property taxes are $5,000 per month,
  8. Insurance is $7,000 per month, and
  9. Fixed maintenance cost is $10,000 per month.

Other pertinent information:

  1. Beginning cash balance is $100,000
  2. Beginning accounts payable balance is $530,000.

For the quarter ending September 30th provide answers for the following Question:

  1. Cash balance at September 30th
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Homework Answers

Answer #1
Summery June July Aug Sep
Opening Cash 100000 -990325 -992700 -958915
Sales realised 720000 1860000 2010000 2160000
Total Cash 820000 869675 1017300 1201085
Less:
Opening Account payable 530000
Raw materail paid 218700 747000 807090 854430
Direct Labour cost 302500 327500 352500 380000
Selling & admin exp 440000 447500 455000 462500
Indirect labour @$3 per Hr 90750 98250 105750 114000
Indirect material @$1 per unit produced 121000 131000 141000 152000
Utility exp @$1 per hr 30250 32750 35250 38000
Maintenance cost 15125 16375 17625 19000
Supervisor salary 40000 40000 40000 40000
Property tax ,Insurance & Fixed main. Cost 22000 22000 22000 22000
Total Paid 1810325 1862375 1976215 2081930
Closing Cash balance -990325 -992700 -958915 -880845

Working

Month Opening Unit projected Unit sales Closing Unit Production required (UNIT)
June 12000 120000 13000 121000
July 13000 130000 14000 131000
Aug 14000 140000 15000 141000
Sep 15000 150000 17000 152000
Oct 17000 170000 NA
Raw Material Requirement Opening inventory Production required (finished UNIT) Raw material required in pound @2 pound per unit closing inventory Raw Material Purchase needed
June 12100 121000 242000 13100 243000
July 13100 131000 262000 14100 263000
Aug 14100 141000 282000 15200 283100
Sep 15200 152000 304000 0 288800
Oct
Sales Realisation projected Unit sales Sales Value@$15 Realised Amt 40% Realised Amt 60% Total Realised
June 120000 1800000 720000 0 720000
July 130000 1950000 780000 1080000 1860000
Aug 140000 2100000 840000 1170000 2010000
Sep 150000 2250000 900000 1260000 2160000
Oct 170000 2550000 1020000 1350000 2370000
1530000 1530000
Raw Materail Payment Raw Material Purchase needed Raw material cost $3 per pound payment made 30% payment made 70% Total Payment
June 243000 729000 218700 0 218700
July 263000 789000 236700 510300 747000
Aug 283100 849300 254790 552300 807090
Sep 288800 866400 259920 594510 854430
Oct 606480 606480
Direct Labour Production required (UNIT) Labour Hrs .25 per unit Labour cost $10 per hr
June 121000 30250 302500
July 131000 32750 327500
Aug 141000 35250 352500
Sep 152000 38000 380000
Oct
Selling & admin Exp salary commission 2% of sales Other Exp ($75000+3% of sales) Total Exp
June 275000 36000 129000 440000
July 275000 39000 133500 447500
Aug 275000 42000 138000 455000
Sep 275000 45000 142500 462500
Oct 275000 51000 151500 477500
Indirect labour @$3 per Hr Indirect material @$1 per unit produced Utility exp @$1 per hr Maintenance cost Supervisor salary Property tax ,Insurance & Fixed main. Cost
June 90750 121000 30250 15125 40000 22000
July 98250 131000 32750 16375 40000 22000
Aug 105750 141000 35250 17625 40000 22000
Sep 114000 152000 38000 19000 40000 22000
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