Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Component Variable Cost Component Supplies $ — $1.00 Power — 0.20 Maintenance 12,500 1.10 Supervision 14,000 — Depreciation 45,000 — Taxes 4,300 — Other 86,000 1.60 Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 — Commissions — $1.40 Depreciation 25,000 — Shipping — 3.60 Other 137,000 1.60 The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "0". January February March Total Beginning balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank Cash receipts fill in the blank fill in the blank fill in the blank fill in the blank Total cash available $fill in the blank $fill in the blank $fill in the blank $fill in the blank Disbursements: Purchases $fill in the blank $fill in the blank $fill in the blank $fill in the blank DL payroll fill in the blank fill in the blank fill in the blank fill in the blank Overhead fill in the blank fill in the blank fill in the blank fill in the blank Marketing & admin fill in the blank fill in the blank fill in the blank fill in the blank Land fill in the blank fill in the blank Total disbursements $fill in the blank $fill in the blank $fill in the blank $fill in the blank Ending balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank Financing: Borrowed/repaid fill in the blank fill in the blank fill in the blank fill in the blank Interest paid fill in the blank fill in the blank fill in the blank fill in the blank Ending cash balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank

Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Component Variable Cost Component Supplies $ — $1.00 Power — 0.20 Maintenance 12,500 1.10 Supervision 14,000 — Depreciation 45,000 — Taxes 4,300 — Other 86,000 1.60 Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 — Commissions — $1.40 Depreciation 25,000 — Shipping — 3.60 Other 137,000 1.60 The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "0". January February March Total Beginning balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank Cash receipts fill in the blank fill in the blank fill in the blank fill in the blank Total cash available $fill in the blank $fill in the blank $fill in the blank $fill in the blank Disbursements: Purchases $fill in the blank $fill in the blank $fill in the blank $fill in the blank DL payroll fill in the blank fill in the blank fill in the blank fill in the blank Overhead fill in the blank fill in the blank fill in the blank fill in the blank Marketing & admin fill in the blank fill in the blank fill in the blank fill in the blank Land fill in the blank fill in the blank Total disbursements $fill in the blank $fill in the blank $fill in the blank $fill in the blank Ending balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank Financing: Borrowed/repaid fill in the blank fill in the blank fill in the blank fill in the blank Interest paid fill in the blank fill in the blank fill in the blank fill in the blank Ending cash balance $fill in the blank $fill in the blank $fill in the blank $fill in the blank

Name: Ponderosa, Inc., produces wiring harness assemblies used in the produc
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given b

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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January	10,000
February	10,500
March	13,900
April	16,000
May	18,500

The following data pertain to production policies and manufacturing specifications followed by Ponderosa:

Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales.
The data on materials used are as follows:

Direct Material Per-Unit Usage Unit Cost

Part #K298 2 $4

Part #C30 3 7

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1.
The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.

Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)

	Fixed Cost Component	Variable Cost Component
Supplies	$ —	$1.00
Power	—	0.20
Maintenance	12,500	1.10
Supervision	14,000	—
Depreciation	45,000	—
Taxes	4,300	—
Other	86,000	1.60

Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)

	Fixed Costs	Variable Costs
Salaries	$ 88,600	—
Commissions	—	$1.40
Depreciation	25,000	—
Shipping	—	3.60
Other	137,000	1.60

The unit selling price of the wiring harness assembly is $110.
In February, the company plans to purchase land for future expansion. The land costs $68,000.
All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum.

Required:

10. Cash budget
Enter a negative balance as a negative amount, and if an amount is zero enter "0".

	January	February	March	Total
Beginning balance	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Cash receipts	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Total cash available	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Disbursements:
Purchases	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
DL payroll	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Overhead	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Marketing & admin	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Land		fill in the blank		fill in the blank
Total disbursements	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Ending balance	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Financing:
Borrowed/repaid	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Interest paid	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Ending cash balance	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank

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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Direct Material	Per-Unit Usage	Unit Cost
Part #K298	2	$4
Part #C30	3	7