Question

P 2 Level : Product Activity based driver Units produced Setups Design changees Machine hours Plant total 90 B0 Unit Batch Product 40 Plant 60 180 Total www Units produced 30 Setups 16 Design changes Machine hours 20 15 Activity based costing is used K Overhead allocated to product A 14 Total Cost Total Units 61 C 90 Rate Number units Assigned Overhead Rate D 100 Form Use Good FOR THE PROBLEMS THAT FOLLOW Show computations each 4 pts CASH BUDGETS for November Expenses are paid in the month following the month incurred Collection pattern for sales Month of sale First month following sale Second month following sale Uncollectible EXPENSES 30 % 40 20 10 MONTH September October November SALES $ 80 30 20 70 40 90 Cash receipts 8 Cash disbursements USE Begin balance Disbursements Disregard any previous answer Cash ending balance 10 Receipts Any cash deficiency must be met by borrowing

Answer 1

8 Collection receipts in the Month of November Particulars Amount ($) Proportion(%) Amount ($) Collection of Nov Sales 90 30% Collection of Oct Sales 40% Collection of Sep Sales Total 20% 71 Collection disbursements in the month of November will be Expenses incurred in the month of October, i.e. $20 10 Cash Ending Balance will be $51 ($71-$20) No Cash Deficiency