1.
To prepare: The
Given information:
Average selling price is $650.
40% of invoices will be paid in the month of invoiced.
45% will be paid in the following month.
15% of invoice will be paid two months after the month of invoice.
Variable manufacturing
Variable marketing costs are driven by the number of sales visit.
Fixed manufacturing overhead costs is $7500 per month
Fixed non manufacturing overhead cost is $4500 per month.
2.
Whether management will be able to pay off $60,000 one year note in the month of October and if not what actions are recommended to management.
3.
Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.
4.
To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.
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Chapter 6 Solutions
Cost Accounting (15th Edition)
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