Emersyn Industries makes Elsa dolls. Emersyn likes to have 20% of the next month's sales needs in ending finished goods inventory. Each doll requires 1.5 yards of fabric that costs Emersyn $0.50 per yard. Emersyn requires that ending inventory of direct materials (fabric) on hand at the end of each month be equal to 40% of the following month's production needs. From past experience, the company has learned that 15% of the company's sales are for cash. The remaining sales are made on credit with 10% collected in the month of sale, 60% collected in the month following the sale, and 30% in the second month following the sale. The following data was taken from Emersyn's master budget: February March April May June Expected Production Units 6,940 8,200 10,400 8,240 9,660 Expected Sales Units 6,800 7,500 11,000 8,000 9,200 Expected Sales $ $68,000 $75,000 $110,000 $80,000 $92,000

Emersyn Industries makes Elsa dolls. Emersyn likes to have 20% of the next month's sales needs in ending finished goods inventory. Each doll requires 1.5 yards of fabric that costs Emersyn $0.50 per yard. Emersyn requires that ending inventory of direct materials (fabric) on hand at the end of each month be equal to 40% of the following month's production needs. From past experience, the company has learned that 15% of the company's sales are for cash. The remaining sales are made on credit with 10% collected in the month of sale, 60% collected in the month following the sale, and 30% in the second month following the sale. The following data was taken from Emersyn's master budget: February March April May June Expected Production Units 6,940 8,200 10,400 8,240 9,660 Expected Sales Units 6,800 7,500 11,000 8,000 9,200 Expected Sales $ $68,000 $75,000 $110,000 $80,000 $92,000

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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