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ACC 381
Chapter 6 HO #1
The following information pertains to the JAG Company:
Month
January
February
March
Sales
$65,000
$81,000
$104,000
Purchases
$35,000
$45,000
$59,000
1. Cash is collected from customers in the following manner:
Month of sale
40%
Month following the sale
60%
2. 45% of purchases are paid for in cash in the month of purchase, and the balance is paid the
following month.
3. Labor costs are 30% of sales. Other operating costs are $30,000 per month (including $8,000
of depreciation). Both of these are paid in the month incurred.
4. The cash balance on March 1 is $19,300. A minimum cash balance of $6,000 is required at the
end of the month. Money can be borrowed in multiples of $1,000.
What is the ending cash balance for March?
ACC 381
Chapter 6 – HO #2
Jaguar Corporation has the following budgeted unit sales for the next six-month period:
Month
June
July
August
September
October
November
Unit Sales
90,000
120,000
210,000
150,000
180,000
120,000
There were 30,000 units of finished goods in inventory at the beginning of June. Plans are to have an
inventory of finished products that equal 20% of the unit sales for the next month.
Five pounds of materials are required for each unit produced. Each pound of material costs $8.
Inventory levels for materials are equal to 30% of the needs for the next month. Materials inventory
on June 1 was 15,000 pounds.
Required:
a. Prepare production budgets in units for July, August, and September.
b. Prepare a purchases budget in pounds for July, August, and September, and give total purchases
in both pounds and dollars for each month.
Purchase answer to see full
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