problem 9-50

a) CASH SALES 40%

APRIL $ 450,000 $ 180,000
MAY $ 580,000 $ 232,000
JUNE $ 900,000 $ 360,000
JULY $ 1,140,000 $ 456,000
AUGUST $ 1,200,000 $ 480,000
SEPTEMBER $ 1,134,000 $ 453,600

b)

Source April May June

Cash Sales $ 180,000 $ 232,000 $ 360,000
Received on Account From :
April $ 118,800 $ 81,000 $ 67,500
May $ 153,120 $ 104,400
June $ 237,600
July
Total Cash Receipts $ 298,800 $ 313,000 $ 427,500

C)

Source April May June

April $ 58,500 $ 58,500
May $ 75,400 $ 75,400
June $ 117,000
July
Total Cash needed $ 58,500 $ 133,900 $ 192,400

Cash Budget
July
Beginning cash balance $ 27,000
Cash sales & collections on account: $ 1,005,960
Total cash avaiable $ 1,032,960
Less disbursement:
Payment for:
Raw materials $ 265,200
Direct labor $ 105,000
Depreciation $ 45,000
Prepaid insurance $ 6,000
Equipment $ 147,800
Operating expense $ 325,000
Total disbursement $ (894,000)
Excees (deficiency) of cash available $ 138,960
Financing:
Borrowings $ 20,000
Ending Cash balance $ 158,960

P9-52

WILLISON COMPANY
DIRECT MATERIAL PURCHASES
FOR THE LAST QUARTER
FABRIC OCTOBER NOVEMBER DECEMBER
UNIT TO BE PRODUCED 20000 40000 25000
DIRECT MATERIALS PER UNIT 0.2 0.2 0.2
PRODUCTION NEED 4000 8000 5000
DESIRED ENDING INVENTORY 1200 750 900
TOTAL NEEDS 5200 8750 5900
LESS: BEGINNING INVENTORY 600 1200 750
DM TO BE PURCHASES 4600 7550 5150
COST/YARDS 3.5 3.5 3.5
TOTAL PURCHASES COST 16100 26425 18025

WILLISON COMPANY
DIRECT MATERIAL PURCHASES
FOR THE LAST QUARTER
POLYFIBERFILL OCTOBER NOVEMBER DECEMBER
UNIT TO BE PRODUCED 20000 40000 25000
DIRECT MATERIALS PER UNIT 6 6 6
PRODUCTION NEED 120000 240000 150000
DESIRED ENDING INVENTORY 72000 45000 54000
TOTAL NEEDS 192000 285000 204000
LESS: BEGINNING INVENTORY 36000 72000 45000
DM TO BE PURCHASES 156000 213000 159000
COST/YARDS 0.05 0.05 0.05
TOTAL PURCHASES COST 7800 10650 7950

WILLISON COMPANY
DIRECT LABOR BUDGET
FOR THE LAST QUARTER
OCTOBER NOVEMBER DECEMBER
UNIT TO BE PRODUCED 20,000 40,000 25,000
DIRECT LABOR TIME PER UNIT IN 0 0 0
TOTAL HOURS NEEDED 2,000 4,000 2,500
AVARAGE WAGE PER HOURS 16 16 16
TOTAL DIRECT LABOR COST 31,000 62,000 38,750
 60%
$ 270,000
$ 348,000
$ 540,000
$ 684,000
$ 720,000
$ 680,400

July
$ 456,000

$ 87,000
$ 162,000
$ 300,960
$ 1,005,960

July

$ 117,000
$ 148,200
$ 265,200
YEAR
85000
0.2
17000
900
17900
600
17300
3.5
60550

YEAR
85000
6
510000
54000
564000
36000
528000
0.05
26400

YEAR
85,000
 0
8,500
16
131,750