Heartbeat Manufacturing Company (HMC) allows employees to purchase, at cost, constructionm materials such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be approved by the employee’s immediate supervisor. Ms You, an assistant cost accountant, charges the employee an amount based on HMC’s net purchase cost. Ms You is in the process of replacing a deck on her home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Ms You reviewed all the purchase invoices for the past year. She then used the lowest price to compute the amount due the company for the lumber. Discuss whether Ms You behaved in an ethical manner
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.
1. Your Company has 12,000 units capacity and projected to produce and sell 10,000 units at P60 per unit for Year 20XY.
P14.50. Sometime 3rd quarter of 20XY, there is a special order for 500 units for P45 selling price.
Should the company accept the special order, and why? What could be the implications?
2. The total estimated sales for the coming year is 260,000 units. The estimated inventory at the beginning of the year is 32,500 units, and the desired inventory at the end of the year is 50,000 units. What is the total production units to be indicated in the production budget?
3. Datan Company expects $550,000 of credit sales in March and $600,000 of credit sales in April.
Datan historically collects 70% of its sales in the month of sale and 30% in the following month.
How much cash does Datan expect to collect in April?
4. Phil Carter, President of Carter Computer Components, Corp. has the option of shipping computer transformers from its Singapore plant via container ship or airfreight. The typical shipment has a value of $75,000. A container ship takes 24 days and costs $5,000; airfreight takes 1 day and costs $8,000. Holding cost is estimated to be 40% or $82.19 per day in either case. How should shipments be made and why?
5. Project X is estimated to generate cash flows of $40,000 per year for 10 years. The cost of the project is $226,009. Project X is expected to improve the competitiveness of the company as leader in the industry. It is the policy of the company to approve only capital investment with payback of five years or lower and IRR of at least 13%.
a. What is the
b. What is the payback period in years?
c. Should the project be approved and why?
6. Heartbeat Manufacturing Company (HMC) allows employees to purchase, at cost, constructionm materials such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be approved by the
employee’s immediate supervisor. Ms You, an assistant cost accountant, charges the employee an amount based on HMC’s net purchase cost.
Ms You is in the process of replacing a deck on her home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Ms You reviewed all the purchase invoices for the past year. She then used the lowest price to compute the amount due the company for the lumber.
Discuss whether Ms You behaved in an ethical manner.
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