15esFortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit.Sales (in units) are budgeted at 158,000 for the first quarter. Cost of goods sold is $12 per unit. Other expense information for the firstquarter follows.Sales CommissionsRentAdvertisingOffice salariesDepreciationInterestTax rate10% of sales dollarsper quarterper quarterper quarterper quarter$ 49,000$ 583,000$ 282,000$ 109,0001.25% quarterly on $230,000 note payable30%Prepare a budgeted income statement for the first quarter ended March 31. (Round your intermediate and final answers to thenearest whole dollar.)FORTUNE, INCORPORATEDBudgeted Income StatementFor Quarter Ended March 31SalesCost of goods soldGross profitSelling, general and administrative expensesCommon stockRent expenseAdvertising expenseOffice salaries expenseDepreciation expenseInterest expense0

Working Note#1Computation of sales revenue:Sales revenue=Budgeted units per quarter x Price per…

Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are budgeted at 158,000 for the first quarter. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows. Sales Commissions Rent Advertising Office salaries Depreciation Interest Tax rate 10% of sales dollars. per quarter per quarter per quarter per quarter quarterly on $230,000 note payable $ 49,000 $ 583,000 $ 282,000 $ 109,000 Advertising expense Office salaries expense Depreciation expense Interest expense 1.25% 30% Prepare a budgeted income statement for the first quarter ended March 31. (Round your intermediate and final answers to the nearest whole dollar.) FORTUNE, INCORPORATED Budgeted Income Statement For Quarter Ended March 31 Sales Cost of goods sold Gross profit Selling, general and administrative expenses Common stock Rent expense

Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are budgeted at 158,000 for the first quarter. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows. Sales Commissions Rent Advertising Office salaries Depreciation Interest Tax rate 10% of sales dollars. per quarter per quarter per quarter per quarter quarterly on $230,000 note payable $ 49,000 $ 583,000 $ 282,000 $ 109,000 Advertising expense Office salaries expense Depreciation expense Interest expense 1.25% 30% Prepare a budgeted income statement for the first quarter ended March 31. (Round your intermediate and final answers to the nearest whole dollar.) FORTUNE, INCORPORATED Budgeted Income Statement For Quarter Ended March 31 Sales Cost of goods sold Gross profit Selling, general and administrative expenses Common stock Rent expense

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 10CE: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects...

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Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
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Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
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