Answered: CXZ Corporation expects to sell 150,000…

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 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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CXZ Corporation expects to sell 150,000 units during the first quarter of 2021, with an ending inventory for the quarter of 20,000 units. Variable manufacturing costs are budgeted at P50 per unit, with 60% of total variable manufacturing costs requiring cash payments during the quarter. Fixed manufacturing costs are budgeted at P120,000 per quarter, 45% of which are expected to require cash payment during the quarter.

1. In the cash budget, payments for manufacturing costs during the quarter will total?

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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