Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 8, Problem 33E
A company’s controller is adjusting next year’s budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next year’s budget before the adjustment.
After adjusting for the 3 percent inflation rate, what is the company’s total budget for the selected items before taxes for next year?
- a. $858,150
- b. $860,412
- c. $810,971
- d. $858,971
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QUESTION 3: Based on the following assumptions and policies ;
a) Prepare the budget for Collectables from Sales!
b) Prepare the budget for Purchases!
c) Prepare the budget of Cash Payment for Purchases!
d) Set the company’s Cash Budget for 2021
BOARD Policies & Assumptions
- Company’s projected sales for the three months as followings:
Sales Forecast for 2021
January 2021
200.000 USD
February 2021
220.000 USD
March 2021
240.000 USD
- All Sales are credited: %40 of sales are collected as in form of cash. %30 of sales are credited for 1 month and %30 of it for the next month. Rule: 40;30;30
- Accounts Receivables by quarter ending 31/12/2020 amounted to 120.000 USD
a) 30.000 USD of Account Receivables belong to November Sales ( 11/2020)
b) 90.000 USD of Account Receivables belong to December Sales ( 12/2020)
- All purchases are credited: %50 of purchases are paid in advance and %50 of purchases are debited
- Projected Inventories by the…
The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The following
information relates to the month ending July 31, 2021:
June 30, 2021, cash balance
Dividends were declared on June 15*
$130,000
44, 000
83,600
13,000
198,000
122,400
47,000
70, 000
Cash expenditures to be paid in July for operating expenses
Depreciation expense
Cash collections to be received
Merchandise purchases to be paid in cash
Equipment to be purchased for cash
Optimum wishes to maintain a minimum cash balance of
*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.
Required:
1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet its
minimum cash requirement. (Leave no cells blank - enter "O" wherever required).
The income statement for the first quarter of 2019 was as follows:
Income Statement
For the Quarter Ended March 31, 2019
Sales
Cost of goods sold
Gross profit
Operating expenses
ales salaries
Rent expense
Depreciation
Utilities
Miscellaneous
Total operating expenses
Net income
$52,000
24,000
12,000
3,600
12,800
$720,000
396,000
324,000
104,400
$219,600
Prepare a budgeted quarterly income statement in tabular form for the first quarter of 2020.
Chapter 8 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 8 - Define budget. How are budgets used in planning?Ch. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is the master budget? An operating budget? A...Ch. 8 - Explain the role of a sales forecast in budgeting....Ch. 8 - All budgets depend on the sales budget. Is this...Ch. 8 - What is an accounts receivable aging schedule? Why...Ch. 8 - Suppose that the vice president of sales is a...Ch. 8 - Suppose that the controller of your companys...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Discuss the shortcomings of the traditional master...Ch. 8 - Define static budget. Give an example that shows...Ch. 8 - What are the two meanings of a flexible budget?...Ch. 8 - What are the steps involved in building an...Ch. 8 - FlashKick Company manufactures and sells soccer...Ch. 8 - Refer to Cornerstone Exercise 8.1, through...Ch. 8 - Refer to Cornerstone Exercise 8.2 for the...Ch. 8 - Prob. 4CECh. 8 - Johnston Company cleans and applies powder coat...Ch. 8 - Play-Disc makes Frisbee-type plastic discs. Each...Ch. 8 - Refer to Cornerstone Exercise 8.6. Required: 1....Ch. 8 - Timothy Donaghy has developed a unique formula for...Ch. 8 - Green Earth Landscaping Company provides monthly...Ch. 8 - Coral Seas Jewelry Company makes and sells costume...Ch. 8 - Shalimar Company manufactures and sells industrial...Ch. 8 - Khloe Company imports gift items from overseas and...Ch. 8 - Nashler Company has the following budgeted...Ch. 8 - Refer to Cornerstone Exercise 8.13. In March,...Ch. 8 - Palmgren Company produces consumer products. The...Ch. 8 - Prob. 16ECh. 8 - Crescent Company produces stuffed toy animals; one...Ch. 8 - Audio-2-Go, Inc., manufactures MP3 players. Models...Ch. 8 - Tiger Drug Store carries a variety of health and...Ch. 8 - Rosita Flores owns Rositas Mexican Restaurant in...Ch. 8 - Prob. 21ECh. 8 - Janet Wooster owns a retail store that sells new...Ch. 8 - Historically, Ragman Company has had no...Ch. 8 - Del Spencer is the owner and founder of Del...Ch. 8 - Refer to Exercise 8.24. Del Spencers purchases...Ch. 8 - Ingles Corporation is a manufacturer of tables...Ch. 8 - In an attempt to improve budgeting, the controller...Ch. 8 - Refer to Exercise 8.27. At the end of the year,...Ch. 8 - Olympus, Inc., manufactures three models of...Ch. 8 - Refer to Exercise 8.29. Suppose Gene determines...Ch. 8 - Trumbull Co. plans to produce 100,000 toy cars...Ch. 8 - Which of the following describes the order in...Ch. 8 - A companys controller is adjusting next years...Ch. 8 - A companys sales for the coming months are as...Ch. 8 - The budget that adjusts unit sales for beginning...Ch. 8 - Ponderosa, Inc., produces wiring harness...Ch. 8 - Bernard Creighton is the controller for Creighton...Ch. 8 - Greiner Company makes and sells high-quality glare...Ch. 8 - Prob. 39PCh. 8 - The controller for Muir Companys Salem plant is...Ch. 8 - Refer to Problem 8.40 for data. Required: 1. Run a...Ch. 8 - Norton Company, a manufacturer of infant furniture...
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