Chapter 20: Q18QS (page 915)
Hockey Pro budgets production of 3,900 hockey pucks during May. The company assigns variable overhead at the rate of \(1.50 per unit. Fixed overhead equals \)46,000 per month. Prepare a factory overhead budget for May.
The total budgeted overhead for the month of May will be$51,850.
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Grace manufactures and sells miniature digital cameras for $250 each. 1,000 units were sold in May, and management forecasts 4% growth in unit sales each month.
Determine: (b) the dollar amount of camera sales for the month of June.
Activity-based budgeting is a budget system based on expected activities.
(2) How does activity-based budgeting differ from traditional budgeting?
Foyert Corp. requires a minimum \(30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at monthend. The cash balance on October 1 is \)30,000, and the company has an outstanding loan of $10,000. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. Prepare a cash budget for October, November, and December. (Round interest payments to the nearest whole dollar.)
Jasper Company has sales on account and for cash. Specifically, 70% of its sales are on account and 30% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of \(525,000 for April, \)535,000 for May, and \(560,000 for June. The beginning balance of accounts receivable is \)400,000 on April 1. Prepare a schedule of budgeted cash receipts for April, May, and June.
Montel Company’s July sales budget calls for sales of \(600,000. The store expects to begin July with \)50,000 of inventory and to end the month with $40,000 of inventory. Gross margin is typically 40% of sales. Determine the budgeted cost of merchandise purchases for July.
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