155 Patient Company prepares monthly cash budgets. Relevant data follows for 2023: 156 157 Sales 158 Direct Materials Purchases 159 Direct Labor 160 Manufacturing Overhead 161 Selling & Administrative Expenses May April $420,000 $440,000 145,000 $80,000 $130,000- $ 100,000 $80,000 $70,000 $ 78,000 $82,000 162 163 Sales are 40% cash and 60% credit. Credit collections are expected to be 50% in the month of the sale, 30% in the 164 first month following the sale, and 15% in the second month following the sale. 60% of direct materials purchases 165 are paid in cash in the month of the purchase, and the balance is paid in the month following the purchase. 166 All other items above are paid in the month incurred except for depreciation of $5,000 in Manufacturing 167 Overhead for both April and May, and depreciation of $4,000 in Selling and Administrative Expenses for 168 both April and May. 169 170 Other data: February 2023 credit sales of $150,000; March 2023 credit sales of $120,000. 171 Purchases of direct materials for March of 2023 of $110,000. 172 Other payments of $35,000 for dividends in May. 173 The company's cash balance on April 1, 2023 is expected to be $40,000. 174 175 Prepare a cash budget for April and May. (Show computations.
155 Patient Company prepares monthly cash budgets. Relevant data follows for 2023: 156 157 Sales 158 Direct Materials Purchases 159 Direct Labor 160 Manufacturing Overhead 161 Selling & Administrative Expenses May April $420,000 $440,000 145,000 $80,000 $130,000- $ 100,000 $80,000 $70,000 $ 78,000 $82,000 162 163 Sales are 40% cash and 60% credit. Credit collections are expected to be 50% in the month of the sale, 30% in the 164 first month following the sale, and 15% in the second month following the sale. 60% of direct materials purchases 165 are paid in cash in the month of the purchase, and the balance is paid in the month following the purchase. 166 All other items above are paid in the month incurred except for depreciation of $5,000 in Manufacturing 167 Overhead for both April and May, and depreciation of $4,000 in Selling and Administrative Expenses for 168 both April and May. 169 170 Other data: February 2023 credit sales of $150,000; March 2023 credit sales of $120,000. 171 Purchases of direct materials for March of 2023 of $110,000. 172 Other payments of $35,000 for dividends in May. 173 The company's cash balance on April 1, 2023 is expected to be $40,000. 174 175 Prepare a cash budget for April and May. (Show computations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:155 Patient Company prepares monthly cash budgets. Relevant data follows for 2023:
April
156
May
157 Sales
158 Direct Materials Purchases
159 Direct Labor
160 Manufacturing Overhead
161 Selling & Administrative Expenses
$440,000
$130,000
$ 100,000
$420,000
145,000
$80,000
$80,000
$70,000
$ 78,000
$82,000
162
163 Sales are 40% cash and 60% credit. Credit collections are expected to be 50% in the month of the sale, 30% in the
164 first month following the sale, and 15% in the second month following the sale. 60% of direct materials purchases
165 are paid in cash in the month of the purchase, and the balance is paid in the month following the purchase.
166 All other items above are paid in the month incurred except for depreciation of $5,000 in Manufacturing
167 Overhead for both April and May, and depreciation of $4,000 in Selling and Administrative Expenses for
168 both April and May.
169
170 Other data: February 2023 credit sales of $150,000; March 2023 credit sales of $120,000.
171 Purchases of direct materials for March of 2023 of $110,000.
172 Other payments of $35,000 for dividends in May.
173 The company's cash balance on April 1, 2023 is expected to be $40,000.
174
175 Prepare a cash budget for April and May. (Show computations.)
176
Transcribed Image Text:> Prepare a Ca
ja8png
April and Mlay. (Sn
April
May
9 Beginning Balance
1 Receipts:
-2
54
35
36
37
38
89 Disbursements:
90
91
92
93
94
95
.96
97
L98
199 Ending Balance
200
201
202
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