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Budget Problems-Homework Help1

Pera Inc. prepared a sales budget for February through June that included cash and credit sales amounts. Collections from sales are expected at 40% in the month of sale, 45% the following month, and 10% two months following sale. The company's total budgeted collections from April through June is P1,468,500. JLT Corporation expects to sell 150,000 units in the first quarter of 1998 with an ending inventory of 20,000 units. Variable manufacturing costs are budgeted at P50 per unit with 70% requiring cash payment. Fixed costs are P120,000 with 40% requiring cash payment. Total cash payments for manufacturing costs are budgeted at P5,998,000.

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254 views

Budget Problems-Homework Help1

Pera Inc. prepared a sales budget for February through June that included cash and credit sales amounts. Collections from sales are expected at 40% in the month of sale, 45% the following month, and 10% two months following sale. The company's total budgeted collections from April through June is P1,468,500. JLT Corporation expects to sell 150,000 units in the first quarter of 1998 with an ending inventory of 20,000 units. Variable manufacturing costs are budgeted at P50 per unit with 70% requiring cash payment. Fixed costs are P120,000 with 40% requiring cash payment. Total cash payments for manufacturing costs are budgeted at P5,998,000.

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Ryoma Echizen
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1. Pera Inc.

prepared the following sales budget


Month Cash Sales Credit Sales
February P 80,000 P 340,000
March 100,000 400,000
April 90,000 370,000
May 120,000 460,000
June 110,000 380,000
Collections are 40% in the month of sale, 45% in the month following the sale, and 10% two
months following the sale. The remaining 5% is expected to be uncollectible. The company’s
total budgeted collection from April to June amounts to
a. P1,090,250 b. P1,325,500 c. P1,468,500 d. P1,397,500

2. JLT Corporation expects to sell 150,000 units during the first quarter of 1998, with an
ending inventory for the quarter of 20,000 units. Variable manufacturing costs are
budgeted at P50 per unit, with 70% of total variable manufacturing costs requiring cash
payments during the quarter. Fixed manufacturing costs are budgeted at P120,000 per
quarter, 40% of which are expected to require cash payment during the quarter.
In the cash budget, payments for manufacturing costs during the quarter will total
a. P8,500,000 b. P5,950,000 c. P5,998,000 d. P5,298,000

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