Module 06: Critical Thinking - ACT 500

User Generated

z7zqxfn

Business Finance

Description

Complete the following questions using Microsoft Word or Excel, as appropriate. Review the grading rubric to confirm you are meeting the assignment requirements.

Cryon Corporation manufactures and sells a seasonal product that has a peak in sales in the third quarter. The following information reflects projections for Year 2 – the coming year – and the first two quarters of Year 3.

  1. Units sell at $10 each. Budgeted sales for the next 6 quarters are outlined below.
    Year 2 QuarterYear 3 Quarter
    1234 12
    Budgeted unit sales4000065000110000700006500055000
  2. Sales are collected in the following pattern: 75% are collected in the quarter the sales are made, and the remaining 25% are collected in the following quarter. On January 1, Year 2, the company had accounts receivable of $70,000, all of which will be collected in the first quarter of Year 2. Bad debts are negligible and can be ignored.
  3. The company desires finished goods inventory at the end of each quarter equal to 30% of the budgeted unit sales for the next quarter. On December 31, Year 1, the company had 15,000 completed units on hand.
  4. Five pounds of raw materials inventory is required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter’s production needs. On December 31, Year 1, the company had 38,000 pounds of raw material on hand.
  5. Raw material cost is $0.80 per pound.

Required:

Prepare the following budgets and schedules for Year 2, showing quarterly figures:

  1. Sales budget
  2. Schedule of expected cash collections
  3. Production budget

Direct materials budget that summarizes both pounds and dollars.

Unformatted Attachment Preview

Complete the following questions using Microsoft Word or Excel, as appropriate. Review the grading rubric to confirm you are meeting the assignment requirements. Cryon Corporation manufactures and sells a seasonal product that has a peak in sales in the third quarter. The following information reflects projections for Year 2 - the coming year - and the first two quarters of Year 3. 1. Units sell at $10 each. Budgeted sales for the next 6 quarters are outlined below. Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2 Budgeted unit sales 40000 65000 110000 7000065000 55000 2. Sales are collected in the following pattern: 75% are collected in the quarter the sales are made, and the remaining 25% are collected in the following quarter. On January 1, Year 2, the company had accounts receivable of $70,000, all of which will be collected in the first quarter of Year 2. Bad debts are negligible and can be ignored. 3. The company desires finished goods inventory at the end of each quarter equal to 30% of the budgeted unit sales for the next quarter. On December 31, Year 1, the company had 15,000 completed units on hand. 4. Five pounds of raw materials inventory is required to complete one unit of product. The company requires ending raw materials inventory at the end of each quarter equal to 10% of the following quarter's production needs. On December 31, Year 1, the company had 38,000 pounds of raw material on hand. 5. Raw material cost is $0.80 per pound. Required: Prepare the following budgets and schedules for Year 2, showing quarterly figures: 1. Sales budget 2. Schedule of expected cash collections 3. Production budget Direct materials budget that summarizes both pounds and dollars.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Sales budget
Year 1 quarter
Units sale
Sales (units)

4
$10

1
$10
40,000

Sales($)

$400,000

Year 2 quarter
2
3
$10
$10
65,000
110,000

$650,000

$1,100,000

Schedule of expected cash colle...


Anonymous
Great study resource, helped me a lot.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags