A shirt manufacturing company expects to be able to sell15,000 shirts in April 2022. Sales volumes are expected togrow at 5% per month cumulatively thereafter throughout2022. The following additional information is available.1. The company intends to carry a stock of finished garmentssufficient to meet 40% of the next month's sales.2. The company intends to carry sufficient raw material stock tomeet the following month's production.3.Estimated costs and revenues per shirt are as follows:Sales pricePer shirtK30Raw materialsFabric at K12 per square metre (12)Dyes and cottonDirect labour at K8 per hourFixed overheads at K4 per hourProfit(3)(4)(2)K9Required:Prepare the following budgets on a monthly basis for each ofthe three months July to September 2022:(i) A sales budget showing sales units and sales revenue;(ii) A production budget (in units);(iii) A fabric purchases budget (in square metres).(iv) Labour hours and cost budget

Given Information:Expected sales for April 2022: 15,000 shirts.Sales grow at 5% per month…

Answered: A shirt manufacturing company expects…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Oriental Lamp Co. manufactures lamps. The estimated number of lamp sales for the last three months of 2020 are as follows: Units October 10,000 November 14,000 December 13,000 Finished Goods Inventory at the end of September was 3,000 units. Ending Finished Goods Inventory is budgeted to equal 25% of the next month’s sales. REQUIRED: How many lamps should be produced in November?
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Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…
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