Use the following data to answer questions 11, 12, &


Question Description:

35

I have also attached a document with the questions I need answered on it. Please be well versed in accounting type questions I have had a tutor on here previously that has given me incorrect answers. Thanks Use the following data to answer questions 11, 12, & 13 Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available: The cash balance at the beginning of September is $9,000.Actual sales for July and August and expected sales for September are as follows:Purchase of inventory will total $25,000 for September. Twenty percent of a month’s inventory purchases are paid ofr during the month of the purchase. The accounts payable remaining from August’s inventory purchases total $16,000, all of which will be paid in September. Selling and administrative expenses are budgeted at $13,000 for September. Of this amount $4,000 is for depreciation. Equipment costing $18,000 will be purchased for cash during September, and dividends totaling $3,000 will be paid during the month.The company maintains a minimum cash balance of $5,000. An open line of credit is available from the company’s bank to bolster the cash balance as needed. 11. Prepare a schedule of cash collections for September. 12. Prepare a schedule of expected cash disbursements for inventory purchases during September. 13. Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. 14. Banner Company produces three products, A, B, & C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product A B C Selling price $60 $90 $80 Variable costs: Direct materials 27 14 40 Direct labor 12 32 16 Variable manufacturing overhead 3 8 4 Total variable costs 42 54 60 Contribution margin $18 $36 $20 Contribution margin ratio 30% 40% 25% Due to a strike in the plant of one of its competitors, demand for the company’s products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labor rate is $8 per hour, and only 3,000 hours of labor time are available each week. Compute the contribution margin that will be obtained per hour of labor time spent on each product. Which orders would you recommend that the company work on next week – the order for Product A, Product B, or Product C? Show computations. By paying overtime wages, more than 3,000 hours of direct labor time can be made available next week. Up to how much should the company be willing to pay per hour in overtime wages as long as there is unfilled demand for the three products? Explain. 15. Donelan Products makes high-pressure lines for a variety of heavy road-improvement equipment. Donelan Products sells the lines to companies that manufacture and sell the equipment. The company’s market research department has discovered a market for high-pressure lines used in automated manufacturing equipment, which Donelan Products currently does not produce. The market research department has indicated that lines would likely sell for $50 per foot. Assume Donelan Products desires an operating profit of 20 percent of sales. What is the highest acceptable manufacturing cost per foot for which Donelan Products would produce the lines? 16. Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy: Direct materials: 8 diodes per toy at $.30 per diode Direct labor: 0.6 hours per toy at $14.00 per hour During August, the company produced 5,000 Brainbuster toys. Production data on the toy for August follow: Direct materials: 70,000 diodes were purchased at a cost of $0.28 per diode. 20,000 of these diodes were still in inventory at the end of the month. Direct labor: 3,200 direct

Answer

35