The cash budget for the month July to September and supporting schedule of receivables and payables. 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 overhead is $7 per direct manufacturing labor hour. 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.

Question

Donald Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base salary of $1,380 per month. One of the barbers serves as the manager and receives an extra $535 per month. In addition to the base salary, each barber also receives a commission of $3.75 per haircut. Other costs are as follows. Advertising $270 per month Rent $1,010 per month Barber supplies $0.50 per haircut Utilities $160 per month plus $0.15 per haircut Magazines $35 per month Donald currently charges $11.00 per haircut. Compute the break-even point in sales units and in sales dollars. Break-even point Break-even point sales $ haircuts

Answer 1

Question

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

To determine

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.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Donald Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base salary of $1,380 per month. One of the barbers serves as the manager and receives an extra $535 per month. In addition to the base salary, each barber also receives a commission of $3.75 per haircut. Other costs are as follows. Advertising $270 per month Rent $1,010 per month Barber supplies $0.50 per haircut Utilities $160 per month plus $0.15 per haircut Magazines $35 per month Donald currently charges $11.00 per haircut. Compute the break-even point in sales units and in sales dollars. Break-even point Break-even point sales $ haircuts

Carla Vista Company had $212,200 of net income in 2024 when the unit selling price was $151, the unit variable costs were $95, and the fixed costs were $571,800. Management expects per unit data and total fixed costs to remain the same in 2025. The president of Carla Vista Company is under pressure from stockholders to increase net income by $84,000 in 2025. Assume that Carla Vista Company sells the same number of units in 2025 as it did in 2024. What would the unit selling price have to be in order to reach the stockholders' desired net income, assuming the unit variable costs and fixed costs remain at 2024 levels? New unit selling price $

Eric Greenhills, a partner in the CPA firm of XYZ & Co. LLP, audited the financial statements of ABC. Company. The audit report can be signed by Eric Greenhills XYZ & Co., LLP a Yes Yes b No No c Yes No d No Yes is the correct answer c yes ,no or a yes, yes ??

Answer 2

Question

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

To determine

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.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 3

Question

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

To determine

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.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 4

Question

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

To determine

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.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 5

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

To determine

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.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Answer 6

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

Answer 7

Chapter 6, Problem 6.38P

1.

To determine

To prepare: The cash budget for the month July to September and supporting schedule of receivables and payables.

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 overhead is $7 per direct manufacturing labor hour.

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.

Answer 8

2.

To determine

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.

Answer 9

2.

To determine

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.

Answer 10

3.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

Answer 11

3.

To determine

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

Answer 12

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Answer 13

4.

To determine

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 17

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 18

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 19

Trending nowThis is a popular solution!

Answer 20

Trending nowThis is a popular solution!

Answer 21

Trending nowThis is a popular solution!

Answer 22

Trending now

Answer 23

This is a popular solution!

Answer 24

See solution

Check out sample textbook solution

Answer 25

Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q

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.

Whether company is able to maintain $14,000 in all three month. If not, what suitable suggestion is for cash management.

To explain: The reason for which the managers prepare the cash budget in addition to the revenue, expenses and income budget.

Chapter 6 Solutions