Homework Help is Here – Start Your Trial Now!
Business
Finance
The following information relates to Arlon Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. 2. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: 4. January February March April Units 0 8 500 11 000 10 500 Cash sales are expected to comprise 60% of the total sales. A cash discount of 10% will be granted to these customers. The balance of the sales will be on credit. Thirty percent (30%) of the amount owing is expected to be received in the month of the sale and the balance in the month after the sale. 5. Variable manufacturing costs per unit are estimated as follows: Direct materials 6. Direct labour Overheads R30 R16 R12 Direct materials will be purchased to meet the production requirements of each month. Sixty percent (60%) of the purchases is expected to be for cash and the balance on credit. Creditors are expected to be paid in the month after the purchase. 7. Direct labour costs are settled monthly. 8. Variable manufacturing overheads will be paid in the month in which they are incurred. 9. Fixed costs, excluding depreciation of R5 000 per month, are expected to amount to R40 000 per month and the fixed costs are paid monthly.

The following information relates to Arlon Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. 2. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: 4. January February March April Units 0 8 500 11 000 10 500 Cash sales are expected to comprise 60% of the total sales. A cash discount of 10% will be granted to these customers. The balance of the sales will be on credit. Thirty percent (30%) of the amount owing is expected to be received in the month of the sale and the balance in the month after the sale. 5. Variable manufacturing costs per unit are estimated as follows: Direct materials 6. Direct labour Overheads R30 R16 R12 Direct materials will be purchased to meet the production requirements of each month. Sixty percent (60%) of the purchases is expected to be for cash and the balance on credit. Creditors are expected to be paid in the month after the purchase. 7. Direct labour costs are settled monthly. 8. Variable manufacturing overheads will be paid in the month in which they are incurred. 9. Fixed costs, excluding depreciation of R5 000 per month, are expected to amount to R40 000 per month and the fixed costs are paid monthly.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question
The following information relates to Arlon Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. 2. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: 4. January February March April Units 0 8 500 11 000 10 500 Cash sales are expected to comprise 60% of the total sales. A cash discount of 10% will be granted to these customers. The balance of the sales will be on credit. Thirty percent (30%) of the amount owing is expected to be received in the month of the sale and the balance in the month after the sale. 5. Variable manufacturing costs per unit are estimated as follows: Direct materials 6. Direct labour Overheads R30 R16 R12 Direct materials will be purchased to meet the production requirements of each month. Sixty percent (60%) of the purchases is expected to be for cash and the balance on credit. Creditors are expected to be paid in the month after the purchase. 7. Direct labour costs are settled monthly. 8. Variable manufacturing overheads will be paid in the month in which they are incurred. 9. Fixed costs, excluding depreciation of R5 000 per month, are expected to amount to R40 000 per month and the fixed costs are paid monthly.
Transcribed Image Text:The following information relates to Arlon Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. 2. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: 4. January February March April Units 0 8 500 11 000 10 500 Cash sales are expected to comprise 60% of the total sales. A cash discount of 10% will be granted to these customers. The balance of the sales will be on credit. Thirty percent (30%) of the amount owing is expected to be received in the month of the sale and the balance in the month after the sale. 5. Variable manufacturing costs per unit are estimated as follows: Direct materials 6. Direct labour Overheads R30 R16 R12 Direct materials will be purchased to meet the production requirements of each month. Sixty percent (60%) of the purchases is expected to be for cash and the balance on credit. Creditors are expected to be paid in the month after the purchase. 7. Direct labour costs are settled monthly. 8. Variable manufacturing overheads will be paid in the month in which they are incurred. 9. Fixed costs, excluding depreciation of R5 000 per month, are expected to amount to R40 000 per month and the fixed costs are paid monthly.
Expert Solution
steps

Step by step

Solved in 1 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS