Maxima Corporation is a high-tech firm that produces a mass-storage system. The design of this syst

Feb 3rd, 2012
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Maxima Corporation is a high-tech firm that produces a mass-storage system. The design of this system is unique and represents a breakthrough in the industry. The company is completing its fifth year of operations and needs to prepare its master budget for the coming year, 2014. The budget should detail each quarter’s activity and the activity for the year in total. The balance sheet at December 31, 2013 is as follows: Assets Cash $ 1,325,000 Accounts Receivable 9,600,000 Direct Materials Inventory (55,000 units) 3,850,000 Finished Goods Inventory (12,500 units) 4,650,000 Plant, Property and Equipment, net of Accumulated Depreciation 38,650,000 $58,075,000 Liabilities and Stockholders’ Equity Accounts Payable $ 6,350 ,000 Capital Stock 27,000,000 Retained Earnings 24,725,000 $58,075,000 The following additional information is provided: a)

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The balance sheet at December 31, 2013 is as followsAssetsCashAccounts ReceivableDirect Materials Inventory (55,000 units)Finished Goods Inventory (12,500 units)Plant, Property and Equipment, net of Accumulated Depreciation$1,325,000$9,600,000$3,850,000$4,650,000$38,650,000Total Assets$58,075,000Liabilities and Stockholders EquityAccounts PayableCapital StockRetained Earnings$6,350,000$27,000,000$24,725,000Total Liabilities & Equity$58,075,000Selling price per unitSales Forecast in unitsCollection in quarter of saleCollection in quarter following salesEnding Finished goodsEnding MaterialsPayment of purchases in the month of purchasePayment of purchases in the followingcmonth of purchaseYear End Desired InventoryDirect Materials required per unitDirect material cost per direct material unitDirect Labor required per unitDirect Labor cost per direct Labor HourVariable Overhad per direct labor hourFixed OverheadProductionDepreciation per quarterVariable selling and administrative costs per unit soldFixed selling and administrative costs per quarterSelling Depreciation per quarterDividendManufacturing EquipmentMinimum Cash Balance$4001st Quarter2nd Quarter88,00098,00060%40%10%20%50%50%30,0003$706$20$3$8,856,000369,000303,000$10$450,000$33,000$800,000$8,000,000$500,000$243rd Quarter105,0004th Quarter82,0005th Quarter85,0001) Sales budgetBudgeted sales (units)Unit sales priceBudget

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