Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 Quarter 2 Quarter 3 Quarter 4 38,000 58,000 29,000 58,000 Budgeted unit sales. • Each T-shirt is expected to sell for $13. The purchasing manager buys the T-shirts for $5 each. • The company needs to have enough T-shirts on hand at the end of each quarter to fill 23 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $76,000 per quarter plus 18 percent of total sales revenue. ● Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter.

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 Quarter 2 Quarter 3 Quarter 4 38,000 58,000 29,000 58,000 Budgeted unit sales. • Each T-shirt is expected to sell for $13. The purchasing manager buys the T-shirts for $5 each. • The company needs to have enough T-shirts on hand at the end of each quarter to fill 23 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $76,000 per quarter plus 18 percent of total sales revenue. ● Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Vertical Ladder Company (VLC) forecasts its sales for January through April will be $40,000, $60,000, $100,000, and $90,000, respectively. All sales are made on credit, and it is expected that 40 percent of sales will be collected in the month of the sale and the remainder will be collected the month following the sale. Customers who pay in the month of the sale will take the 2 percent cash discount VLC offers for paying early. VLC normally purchases and pays for raw materials, which cost 45 percent of sales, one month prior to selling the finished products. Employees' wages represent 20 percent of sales and rent is $6,000 per month. At the beginning of February, VLC expects to have $4,000 in cash, which is $1,000 greater than its target cash balance. Using the information provided, construct VLC's cash budget for February and March. Round your answers to the nearest dollar. Use a minus sign to enter a negative value, if any. If your answer is zero, enter "0". February March…
Flora’s Flats produces comfortable and portable women’s shoes designed to be worn as a second pair of shoes after a formal event. The company has the following financial information: The company’s sales price is $20 per unit. The variable costs of producing flats is $6 per unit. The company expects to have fixed costs of $10,000 next year. The company expects to sell 1,000 pairs of flats next year. Assume no taxes a. Prepare a budgeted contribution format income statement. b. Compute the margin of safety in both dollar and percentage terms. c. Compute the degree of operating leverage. d. If sales increase by 20% in the following year, how much would net income increase (use the degree of operating leverage to compute your answer).
In the coming year, Concord, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive- motion injuries. The brace will be sold for $13.00 to retailers throughout the country. All sales will be made on account. An expected 65% of sales will be collected within the quarter of the sale, and another 30% in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted sales units 29,000 41,000 57,000 77,000 Prepare Concord, Inc's cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0. Round "Budgeted sale price" and "Cash Receipts Budgets" answers to 2 decimal places, eg. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)
Petlassa is a company with a large distribution network and selling automobile tires.The company's finance manager will meet with the General Manager to discuss the financial information for the next 3 months. USD sales amount for the past month and for the next 3 monthsSales forecasts are given below:Last Month:May 250,000Predictions:June 100,000July 150,000August 250,000September 100,000the company collects 40% of its sales in cash, 60% as 1 month term..- Purchases make up 60% of sales. One month before Petlassa's salesmaking the relevant purchase; but the payment is made 1 month after the purchase date.realizes.- labor costs are 5% of sales and are paid in the relevant month.- General Management expenses amount to 15% of the sales and are paid in the relevant month.- 10,000 USD income tax will be paid in August.- 50,000 USD dividend payment will be made in June.- The cash balance on June 1 is 80,000 USD and the cash balance is at the end of each monthIt is required to be 60,000…
The Sock company buys hiking socks for GHS6 per pair and sells them for GHs 10. Management budgets monthly fixed costs of GHS 12.000 for sales volume between O and 12,000 pairs. Required: Consider the following questions separately by using the foregoing information each time. 1. The Sock Company plans to advertise in hiking magazines. The advertising campaign will increase total fixed costs by GHS2,000 per month. Calculate the new breakeven point in units. 2. In addition to selling hiking socks, the Sock Company would like to start selling sports socks. The Sock Company expects to sell one pair of hiking socks for every three pairs of sports socks. The Sock Company will buy the sports socks for GHS 4 per pair and sell them for GHS 8 per pair. Total fixed costs will stay at GHS 12,000 per month. Calculate the breakeven point in units for both hiking socks and sports socks
Customers at furniture store demand an average of 6,000 bookcases per year. Each time an order is placed, an ordering cost of $300 is incurred. The annual holding cost for a single desk is 25% of the $200 cost of a bookcase. Assume that the lead time to receive an order is one week. a) Each time an order is placed, how many bookcases should be ordered? b) What is the cycle time, T? c) How many orders should be placed each year? d) Determine the total annual costs of meeting the customers' demands for bookcases.
Use the following information to answer questions 19 through 30: Currently, OET Corporation sells 350,000 units of widgets a month at a price of $21 a unit. The company currently has a net 30 credit policy. Mr. Ent, the company's financial manager, is evaluating a new credit policy of net 60 for the company. The marketing manager thinks that sales would increase by 10,000 units per month if the company were to switch to the new credit policy. The APR for OET is 13% compounded monthly, and its variable cost per widget is $12. Ignore taxes. Tomorrow, Mr. Ent will be making a presentation on the new proposed credit policy to the CEO of OET. He will be expected to provide answers to the following questions Describe how you would calculate the net present value of the proposed credit policy switch.
A regional supermarket chain has 12 stores across the midlands. Due to the nature of their business staff costs are a significant item on their income statement. Currently each store pays its staff £8 per hour based on the weekly time sheets they fill in. These time sheets are signed off by the store managers and sent to the central finance team who process the monthly staff payments. A central finance officer prepares two payment runs each month, one for the hourly paid staff, the other for the salaried staff including the store managers and the central finance and other central department staff. Both payment runs are automatically checked against a database of active staff that is managed by the finance officer responsible for the payment run. This payment run is then signed off by the finance director, although due to the size of the report and the other controls already in place this is not a detailed review. All new starter and leaver documentation is held separately to the…
Treasure Service anticipates the following sales revenue over a five-month period: Its collection history indicates that credit sales are collected as follows: E (Click the icon to view the sales data.) A (Click the icon to view the collections data.) The company's sales are 20% cash and 80% credit. How much cash will be collected in Janua More Info 25% in the month of the sale 50% in the month after the sale Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole do 20% two months after the sale Treasure Service 5% are never collected Cash Collections Budget For the Months of January through March January Data Table Print Done Cash sales Collection of credit sales: 25% Month of sale November December January February March 50% Month after Sales revenue....... 16,100 $ 10,000 $ 15,200 $ 12,000 $ 14,200 20% Two months after Total cash collections Print Done
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Demand Next year (units) Debbie Trish Sarah Mike Sewing kit Selling Price per Unit $ 15.50 $ 6.00 51,000 43,000 $ 25.00 36,000 40,000 $ 11.00 326,000 $ 8.10 The following additional information is available: Direct Materials $ 4.40 $ 1.20 $6.59 $ 2.10 $ 3.30 Direct Labor $ 2.70 $ 1.20 $ 4.50 $ 3.30 $0.90 a. The company's plant has a capacity of 118,450 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $6 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $530,000 per year. Variable overhead costs are $3 per direct labor-hour. d. All of the…