ACG2071 Final Exam Part 1

( Problem ) ( 1. ) ( CrystalCompanymanufacturestwomodelsofmicrocassetterecorders ,VCH andMTV.Based onthe followingproductiondataforAprilofthecurrentyear,prepareaproductionbudgetforApril. ) ( VCH 2 ,800 6,900 ) ( MTV4 ,200 5,250 ) ( Estimated inventory ( units), April1Desiredinventory(units),April30Expectedsalesvolume (units): Easternzone MidwestzoneWesternzone ) ( 12,960 19,800 9,840 ) ( 12,500 19 , 000 14 , 500 ) ( 2. ) ( TheSvelteJeansCompanyproducestwodifferenttypesofjeans.Oneiscalledthe " SimpleLife" and theotheriscalledthe " FancyLife " .The company salesbudgetestimatesthat350,000oftheSimple Life Jeansand 200 , 000 oftheFancyLifewillbe sold during20xx.TheProduction Budget requires353,500unitsofSimpleLifejeansand196,000FancyLifejeansbemanufactured.The SimpleLifejeansrequire3 yards ofdenimmaterial,azipper,and25yardsofthread.TheFancyLifejeansrequire 4.5 yardsofdenim material,a zipper,and40yardsofthread.Each yard ofdenimmaterialcosts$3.25 , thezippercosts $ . 75 each , andthe thread is$.01peryard.Thereisenoughmaterialtomake2,000jeansofeach type atthebeginningoftheyear. Thedesiredamountofmaterialsleftinendinginventoryistohaveenough to manufacture3 ,500jeansof each type.PrepareaDirectMaterialsPurchasesBudget . ) ( 3. ) ( The treasurer of Systems Company has accumulated thefollowingbudgetinformationforthefirsttwo months ofthecomingyear : ) ( March $450 ,000 290 , 000 41 ,4 00 250,000 ) ( April $520 ,000350,000 46 , 400 ) ( Sales.Manufacturingcosts SellingandadministrativeexpensesCapitaladditions ) ( The company expectsto sell about35%ofitsmerchandiseforcash.Of sales on account , 80%are expected tobecollectedinfull inthemonthof the saleandtheremainderinthemonthfollowingthesale.One-fourthof the manufacturingcostsareexpectedtobepaidinthemonthinwhichthey are incurredand the other three-fourthsinthefollowingmonth.Depreciation,insurance,andproperty taxes represent $6,400of theprobable monthlysellingandadministrativeexpenses.Insuranceispaid in Februaryanda $40 , 000 installmentonincometaxesisexpected to bepaidinApril.Ofthe remainder of thesellingandadministrativeexpenses,one -half areexpectedtobepaidinthemonthin which theyareincurred and the balanceinthefollowingmonth.Capitaladditionsof$250,000areexpectedtobepaidinMarch. ) ( CurrentassetsasofMarch1arecomposed of cashof $45,000 and accountsreceivableof$51,000. CurrentliabilitiesasofMarch1arecomposedofaccountspayableof$121,500 ($102,000 formaterialspurchases and $19,500foroperatingexpenses).Managementdesires to maintain a minimumcash bal ance of $20,000. ) ( PrepareamonthlycashbudgetforMarch and April . ) ( 1 )