(a1) Prepare the Sales forecast (and corresponding schedule of cash receipts) for Coronado Corp. Budgeted Sales Volume (a2) Budgeted Selling Price Budgeted Sales Revenue Collections from January Sales Collections from December 31 A/R Balance Collections from February Sales Collections from March Sales Total Cash Receipts Budgeted Sales Volume Save for Later Last saved 1 second ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Add $ Prepare the production budget for Coronado Corp. $ Total Units Needed Less January : Target Ending Units in FG Inventory Budgeted Units to be Produced : Beginning FG Inventory $ $ January February January $ February March February $ Attempts: 0 of 2 used Submit Answer

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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The management team at Coronado Corporation is capitalizing on the trend for live-edge cedar fireplace mantels-beautiful, simple,
organic. In fact, sales are so strong they are running out of inventory. This means that budgeting for next year will be extremely
important, to ensure sure that Coronado can source enough cedar.
With budgeted sales as the starting point for the entire process, the management team agrees that the following levels present the
most likely scenario for the first five months of the upcoming year.
Budgeted number of mantels to be sold
.
.
.
(a1)
(a2)
In addition to sales volume, many other specifics are required in order to complete the company's operating budgets. Key details
associated with prices, costs, and usage are as follows.
Budgeted Sales Volume
Budgeted Selling Price
Budgeted Sales Revenue
Collections from January Sales
Budgeted selling price is $500 per mantel. Each mantel measures 3 inches x 12 inches x 4 feet.
Target ending inventory of finished mantels is 20% of next month's budgeted sales. However, beginning inventory on January
1 is expected to be only 38 units.
Collections from December 31 A/R Balance
Collections from February Sales
Coronado' primary DM, rough-cut cedar, is purchased from the supplier already at the desired height and depth (3 inches
high, 12 inches deep). Coronado cuts the cedar planks to the desired 4-foot lengths. Each rough-cut board costs Coronado
$50 per foot.
Target ending DM inventory (rough-cut cedar) is 50% of next month's production needs.
DL to sand, stain, and treat the rough-cut cedar costs $20 per hour. Each mantel requires one hour of labor time.
MOH resources include variable costs budgeted to be $10/board foot, plus budgeted monthly Fixed MOH costs of $4,800.
Depreciation of $2,100 is included in that monthly fixed cost.
Prepare the Sales forecast (and corresponding schedule of cash receipts) for Coronado Corp.
Collections from March Sales
SG&A costs are also broken down into their variable and fixed components: budgeted variable SG&A costs are $50/unit sold,
while budgeted fixed monthly SG&A costs are $61,500, which includes $8,000 of depreciation.
Total Cash Receipts
All sales are made on account, with 25% paying in the month of sale and 70% paying in the month following the sale. The
remainder is considered uncollectible. December sales in the prior year were budgeted to be $230,000.
Beginning finished goods inventory was held at a cost of $280/unit from the prior year.
January
380
Budgeted Sales Volume
$
Add
$
February
Total Units Needed
Prepare the production budget for Coronado Corp.
Save for Later Last saved 1 second ago.
Saved work will be auto-submitted on the due date. Auto-
submission can take up to 10 minutes.
Budgeted Units to be Produced
Less V Beginning FG Inventory
Target Ending Units in FG Inventory
440
January
March
460
$
$
April
450
$
$
January
May
470
February
January
$
$
$
$
February
Attempts: 0 of 2 used
March
Submit Answer
February
Transcribed Image Text:The management team at Coronado Corporation is capitalizing on the trend for live-edge cedar fireplace mantels-beautiful, simple, organic. In fact, sales are so strong they are running out of inventory. This means that budgeting for next year will be extremely important, to ensure sure that Coronado can source enough cedar. With budgeted sales as the starting point for the entire process, the management team agrees that the following levels present the most likely scenario for the first five months of the upcoming year. Budgeted number of mantels to be sold . . . (a1) (a2) In addition to sales volume, many other specifics are required in order to complete the company's operating budgets. Key details associated with prices, costs, and usage are as follows. Budgeted Sales Volume Budgeted Selling Price Budgeted Sales Revenue Collections from January Sales Budgeted selling price is $500 per mantel. Each mantel measures 3 inches x 12 inches x 4 feet. Target ending inventory of finished mantels is 20% of next month's budgeted sales. However, beginning inventory on January 1 is expected to be only 38 units. Collections from December 31 A/R Balance Collections from February Sales Coronado' primary DM, rough-cut cedar, is purchased from the supplier already at the desired height and depth (3 inches high, 12 inches deep). Coronado cuts the cedar planks to the desired 4-foot lengths. Each rough-cut board costs Coronado $50 per foot. Target ending DM inventory (rough-cut cedar) is 50% of next month's production needs. DL to sand, stain, and treat the rough-cut cedar costs $20 per hour. Each mantel requires one hour of labor time. MOH resources include variable costs budgeted to be $10/board foot, plus budgeted monthly Fixed MOH costs of $4,800. Depreciation of $2,100 is included in that monthly fixed cost. Prepare the Sales forecast (and corresponding schedule of cash receipts) for Coronado Corp. Collections from March Sales SG&A costs are also broken down into their variable and fixed components: budgeted variable SG&A costs are $50/unit sold, while budgeted fixed monthly SG&A costs are $61,500, which includes $8,000 of depreciation. Total Cash Receipts All sales are made on account, with 25% paying in the month of sale and 70% paying in the month following the sale. The remainder is considered uncollectible. December sales in the prior year were budgeted to be $230,000. Beginning finished goods inventory was held at a cost of $280/unit from the prior year. January 380 Budgeted Sales Volume $ Add $ February Total Units Needed Prepare the production budget for Coronado Corp. Save for Later Last saved 1 second ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Budgeted Units to be Produced Less V Beginning FG Inventory Target Ending Units in FG Inventory 440 January March 460 $ $ April 450 $ $ January May 470 February January $ $ $ $ February Attempts: 0 of 2 used March Submit Answer February
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