Danner Company expects to have a cash balance of $49.950 on January 1 2020 Relevant monthly budget data for the first 2 months of 2020 are as follows Collections from customers January $94.250 February $166.500 Payments for direct materials January $55,500 February $83.250 Direct labor January $33.300, February $49.950 Wages are paid in the month they are incurred Manufacturing overhead January 123.310 February $27.750 These costs include depreciation of 11643 per month All other overhead costs are paid as incurred Selling and administras openses January 116.650 February $22.200 These costs are odusive of depreciation They are paid Sales of marketable securities in January are expected to reale $13.320 in cash Danner Company has a line of credit at a local bank that enables it to borrow up to $27,750. The company wants to maintain a minimum monthly cash balance of $22.200 Prepare a cash budget for January and February
Danner Company expects to have a cash balance of $49.950 on January 1 2020 Relevant monthly budget data for the first 2 months of 2020 are as follows Collections from customers January $94.250 February $166.500 Payments for direct materials January $55,500 February $83.250 Direct labor January $33.300, February $49.950 Wages are paid in the month they are incurred Manufacturing overhead January 123.310 February $27.750 These costs include depreciation of 11643 per month All other overhead costs are paid as incurred Selling and administras openses January 116.650 February $22.200 These costs are odusive of depreciation They are paid Sales of marketable securities in January are expected to reale $13.320 in cash Danner Company has a line of credit at a local bank that enables it to borrow up to $27,750. The company wants to maintain a minimum monthly cash balance of $22.200 Prepare a cash budget for January and February
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Danner Company expects to have a cash balance of $49.950 on January 1, 2020: Relevant monthly budget data for the first 2 months
of 2020 are as follows
Collections from customers January $94.350. February $166.500
Payments for direct materials: January $55.500, February $83.250
Direct labor: January $33,300. February $49,950 Wages are paid in the month they are incurred
Manufacturing overhead January $23,310, February $27.750. These costs include depreciation of $1.665 per month. All other
overhead costs are paid as incurred
Selling and administrative expenses January $16.650, February $22,200 These costs are exclusive of depreciation. They are paid a
incurred
Sales of marketable securities in January are soxpected to realize $13.320 in cash Danner Company has a line of credit at a local bank
that enables it to borrow up to $27.750. The company wants to maintain a minimum monthly cash balance of $22.200
Prepare a cash budget for January and February
Transcribed Image Text:Prepare a cash budget for huary and February
DANNER COMPANY
Cash Budget
January
Febn
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