Vidro Company prepares monthly cash budgets. Relevant data from operating budgets for 2011 are: January February Sales $350,000 $400,000 Direct materials purchases 120,000 110,000 Direct labor 85,000 115,000 Manufacturing overhead 60,000 75,000 Selling and administrative expenses 75,000 80,000 All sales are on account. Collections are expected to be 60% in the month of sale, 30% in the first month following the sale, and 10% in the second month following the sale.Thirty percent (30%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred.Depreciation has been excluded from manufacturing overhead and selling and administrative expenses. Other data: 1. Credit sales: November 2010, S200,000; December 2010, S280.000.

Vidro Company prepares monthly cash budgets. Relevant data from operating budgets for 2011 are: January February Sales $350,000 $400,000 Direct materials purchases 120,000 110,000 Direct labor 85,000 115,000 Manufacturing overhead 60,000 75,000 Selling and administrative expenses 75,000 80,000 All sales are on account. Collections are expected to be 60% in the month of sale, 30% in the first month following the sale, and 10% in the second month following the sale.Thirty percent (30%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred.Depreciation has been excluded from manufacturing overhead and selling and administrative expenses. Other data: 1. Credit sales: November 2010, S200,000; December 2010, S280.000.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 4PA: Budgeted income statement and supporting budgets for three months Bellaire Inc. gathered the...

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