Surity Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments: (Click the icon to view the data.) How much cash will be paid out next month? Surity Corporation Cash Payments Budget Cash payments for direct materials: 55% of last month's purchases 45% of next month's purchases Cash payments for direct labor Cash payments for manufacturing overhead Cash payments for operating expenses Cash payment for taxes Total cash payments More info a. Surity Corporation pays for 45% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $75,000, while the company anticipates $84,000 of direct material purchases next month. b. Direct labor for the upcoming month is budgeted to be $33,000 and will be paid at the end of the upcoming month. c. Manufacturing overhead is estimated to be 130% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment. d. Monthly operating expenses for next month are expected to be $43,000, which includes $2,100 of depreciation on office equipment and $1,600 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred. e. Surity Corporation will be making an estimated tax payment of $7,700 next month.
Surity Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments: (Click the icon to view the data.) How much cash will be paid out next month? Surity Corporation Cash Payments Budget Cash payments for direct materials: 55% of last month's purchases 45% of next month's purchases Cash payments for direct labor Cash payments for manufacturing overhead Cash payments for operating expenses Cash payment for taxes Total cash payments More info a. Surity Corporation pays for 45% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $75,000, while the company anticipates $84,000 of direct material purchases next month. b. Direct labor for the upcoming month is budgeted to be $33,000 and will be paid at the end of the upcoming month. c. Manufacturing overhead is estimated to be 130% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment. d. Monthly operating expenses for next month are expected to be $43,000, which includes $2,100 of depreciation on office equipment and $1,600 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred. e. Surity Corporation will be making an estimated tax payment of $7,700 next month.
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:Surity Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments:
(Click the icon to view the data.)
How much cash will be paid out next month?
Surity Corporation
Cash Payments Budget
Cash payments for direct materials:
55% of last month's purchases
45% of next month's purchases
Cash payments for direct labor
Cash payments for manufacturing overhead
Cash payments for operating expenses
Cash payment for taxes
Total cash payments
CD
More info
a. Surity Corporation pays for 45% of its direct materials purchases in the month of purchase and the
remainder the following month. Last month's direct material purchases were $75,000, while the company
anticipates $84,000 of direct material purchases next month.
b. Direct labor for the upcoming month is budgeted to be $33,000 and will be paid at the end of the upcoming
month.
c. Manufacturing overhead is estimated to be 130% of direct labor cost each month and is paid in the month
in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment.
d. Monthly operating expenses for next month are expected to be $43,000, which includes $2,100 of
depreciation on office equipment and $1,600 of bad debt expense. These monthly operating expenses are
paid during the month in which they are incurred.
e. Surity Corporation will be making an estimated tax payment of $7,700 next month.
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