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Online Weekly Assessment 3 (INDIVIDUAL) (15%) Semester : Spring2 2020 Year : 2019/2020

Course Title : Managerial Accounting

Course Code : ACT310 Section : Instructor : Dr. Gökberk Can and Dr. Suzan Dsouza

Instructions Submit your assessment answers online through Moodle (with a cover page that incudes your name, ID, and the Section.)

Due Date July 21, 2020 – 23:59

To be completed by the student

Students Name : Student ID:

Grading Scheme

Question Earned Points

Max. Points Question Earned Points

Max. Points

1 50

2 50

Total Earned Points Total Available Points Instructor Signature

100

ACT310: Managerial Accounting Assignment 3 Spring 2020

Question 1 Collections from customers are normally 75 percent in the month of sale, 18 percent in the month following the sale, and 5 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 4 percent discount allowed on purchases paid for by the tenth of the following month. Cash disbursements for expenses are expected to be $11,200 for the month of September. The company’s cash balance on September 1 was $25,000.

Required: Prepare the following schedules.

1. Expected cash collections during September.

2. Expected cash disbursements during September.

3. Expected cash balance on September 30.

Question 2 AHO Company plans to sell 350,000 units of finished product in July and anticipates a growth rate in sales of 8 percent per month. The desired monthly ending inventory in units of finished product is 85 percent of the next month’s estimated sales. There are 120,000 finished units in inventory on September 30. Each unit of finished product requires seven pounds of raw material at a cost of $2.25 per pound. There are 920,000 pounds of raw material in inventory on September 30.

Required: 1. Compute the company’s total required production in units of finished product

for the entire three-month period ending December 31. 2. Independent of your answer to requirement (1), assume the company plans to

produce 750,000 units of finished product in the three-month period ending December 31, and to have raw-material inventory on hand at the end of the three-month period equal to 35 percent of the use in that period. Compute the total estimated cost of raw-material purchases for the entire three-month period ending December 31.

ACT310: Managerial Accounting Assignment 3 Spring 2020 2 | P a g e