#1

John Inc. budgets sales for the third quarter of 2013:

Budgeted Sales
(Dollars)

July

Augus
t

Septem
ber

$16,0
00

$20,00
0

$14,000

From past experience the company has learned that 75% of sales are collected in the month of
the sale and 25% are collected in the month following the sale. Uncollectible accounts are
unusual and may be considered to be 0%. Beginning accounts receivable were $3,000 all of
which were expected to be collected in July.
Required:
Prepare the companys schedule of expected cash collections for the third quarter.
Calculate the companys account receivable balance at the end of September.

#2
BC Company has budgeted unit sales as follows:
Month
April
May
June
July

Sales (Units)
100,000
140,000
130,000
150,000

The company is preparing a production budget for second quarter of 2013. Past experience has
shown that end of month inventory levels will be equal to 10% of the following months sales.
The inventory at the end of March was 10,000 units.
Prepare a production budget for the quarter.

#3
Yamasaki Industries production budget for the first quarter of 2013 follows:
January
Budgeted Production (Units)

12,000

February

March

13,600

12,400

Each unit produced will require three kilograms of raw material. Raw materials cost $5 per
kilogram. Management desires a monthly ending inventory of raw materials equal to 30% of the
following months production needs. The desired ending inventory for March is 11,000
kilograms.
In addition, the beginning raw materials inventory for January is expected to be
10,800 kilograms.
Required:
Prepare the companys direct materials purchases budget for the upcoming quarter.

#4
McCarthy Companys production requirements are as follows:
January
Units to be produced
28,000

February March
20,000
26,000

Each unit requires 1.5 direct labour hours to produce and workers are paid $10.00 per hour. The
company has permanent employees who are guaranteed to be paid for at least 35,000 hours of
work per month. If production requires less than 35,000 hours, they will be paid for 35,000 hours
anyway. Any amount of work above 35,000 hours will be paid at 1.5 times their normal hourly
rate.
Required
Prepare the companys direct labour budget for the quarter.

#5
Singular Inc budgets direct labour hours for 2013 as follows:

The companys variable overhead rate is $5 per direct labour hour. The companys fixed
overhead is $30,000 per month this number includes monthly depreciation of $5,000.
Prepare the companys manufacturing overhead budget for the first quarter of 2013.

#6
The budgeted unit sales for Doug Corporation for the upcoming fiscal year are as follows:
April
May
June
Budgeted Unit Sales
20,000
25,000
28,000
The companys variable expenses include:
Shipping expenses:
$5.00 per unit
Sales commissions:
$10.00 per unit
Other expenses:
$7.00 per unit
The companys fixed expenses are:
Advertising:
$125,000 per month
Executive salaries: $200,000 per month
Amortization:
$100,000 per month
Also, executive bonus payments of $50,000 will be made in the April and June, and a major
building repair of $75,000 will be paid in May.
Required:
In good form, prepare the companys selling and administrative budget for the upcoming quarter.
The company is particularly interested in knowing its cash disbursements for selling and admin
expenses.

#7

Joes Jumpers produces and sells jumpsuits worn by skydivers. The company had the following
estimated cash flows for 2012:

The company begins the year with $20,000 in cash and requires a minimum cash balance of
$10,000. The company may borrow any amount from a local bank at an annual interest rate of
3%, The borrowing must occur at the beginning of any quarter and all repayments must be
made at the end of any quarter. Interest must be repaid at the time of loan repayment.
Required:
In good form, prepare the companys cash budget for the upcoming year.