The Plantd’ Company’s budgeted sales for the first quarter of 2020 are as follows: N$ January 400 000 February 320 000 March 480 000 Total 1 200 000 Credit sales are normally collected as follows: Percent (%) In the month of sale 50 The month following the sale 30 The second month following the month of the sale 20 Total 100 The firm’s beginning balance of accounts receivable is N$150 000 and is composed of the following: N$ From December 2019 sales 100 000 From November 2019 sales 50 000 Total 150 000 The company offers a 2% cash discount to its wholesale customers who pay their bills within the month of sale. Required to: a) Compute the amount of sales for November and December. b) Prepare a cash budget of cash collections for each month of the first quarter of 2020 and a total for the quarter. c) Calculate the balance of accounts receivable at March 31, 2020.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Question 3
The Plantd’ Company’s budgeted sales for the first quarter of 2020 are as follows:
|
N$ January 400 000 February 320 000 March 480 000 Total 1 200 000
Credit sales are normally collected as follows: |
|
|
|
Percent (%) |
|
In the month of sale |
50 |
|
The month following the sale |
30 |
|
The second month following the month of the sale |
20 |
|
Total |
100 |
The firm’s beginning balance of accounts receivable is N$150 000 and is composed of the following:
|
|
|
N$ |
|
From December 2019 sales |
|
100 000 |
|
From November 2019 sales |
|
50 000 |
|
Total |
|
150 000 |
The company offers a 2% cash discount to its wholesale customers who pay their bills within the month of sale.
Required to:
|
a) Compute the amount of sales for November and December. |
|
b) Prepare a |
|
c) Calculate the balance of accounts receivable at March 31, 2020. |
|
d) Name four (4) benefits for the company of using a cash budget. |
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