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c. Construct the production budget. Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units 1 2 Year 2 Quarters 3 Year 3 Quarters 4 Year 1 2 b. Construct the schedule of expected cash collections. Beginning balance accounts receivable First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections 1 2 Current Year Quarters 3 4 Year

c. Construct the production budget. Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units 1 2 Year 2 Quarters 3 Year 3 Quarters 4 Year 1 2 b. Construct the schedule of expected cash collections. Beginning balance accounts receivable First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections 1 2 Current Year Quarters 3 4 Year

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 35E: The budget that adjusts unit sales for beginning and ending inventories of finished goods is the: a....
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Dowson Company is creating components of its master budget for the year. Below is some information from the budget committee.
 
Current Year Quarters Next Year Quarters
1 2 3 4 1 2
Budgeted unit sales 39,100 62,450 101,650 56,700 70,400 81,280
Selling price per unit $36.90
Accounts receivable, beginning balance $77,938
Sales collected in the quarter sales are made 69%
Sales collected in the quarter after sales are made 31%
Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter
Finished goods inventory, beginning 12,710 units
Raw materials required to produce one unit 11 pounds
Desired ending inventory of raw materials is 10% of the next quarter's production needs
Raw materials inventory, beginning 23,430 pounds
Raw material costs $0.84 per pound
Raw materials purchases are paid 66% in the quarter the purchases are made and 34% in the quarter following purchase
All other expenses are paid the quarter they are incurred
 
Accounts payable for raw materials, beginning balance $84,500
Direct Labor Hours per unit 0.81
Direct Labor Rate per Hour $22.56
Variable Overhead per Unit 2.16
Fixed Overhead per quarter $18,000
Variable Selling Expense per unit sold $2.27
Fixed Selling expense per quarter $35,000
Please work out section B and C Construct the schedule of expected cash collections.
Construct the production budget. b. Construct the schedule of expected cash collections. c. Construct the production budget.
c. Construct the production budget. Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units 1 2 Year 2 Quarters 3 Year 3 Quarters 4 Year 1 2
Transcribed Image Text:c. Construct the production budget. Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units 1 2 Year 2 Quarters 3 Year 3 Quarters 4 Year 1 2
b. Construct the schedule of expected cash collections. Beginning balance accounts receivable First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections 1 2 Current Year Quarters 3 4 Year
Transcribed Image Text:b. Construct the schedule of expected cash collections. Beginning balance accounts receivable First-quarter sales Second-quarter sales Third-quarter sales Fourth-quarter sales Total cash collections 1 2 Current Year Quarters 3 4 Year
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