Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 9, Problem 9.5SE
Production budget (Learning Objective 2)
Nichols Cycles manufactures chainless bicycles. On March 31, Nichols Cycles had 100 bikes in inventory. The company has a policy that the ending inventory in any month must be 10% of the following month’s expected sales. Nichols Cycles expects to sell the following number of bikes in each of the next four months:
April | 1,000 bikes |
May | 1,170 bikes |
June | 1,360 bikes |
July | 1,250 bikes |
Prepare a production budget for the second quarter, with a column for each month and for the quarter.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Prepare the cash collections budget for January, February, and March, as well as a summary for the first quarter.
Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores.
$15
Sales price per birdfeeder
1.5
Board feet of wood required for each birdfeeder
$4
Cost per board foot (actual)
10%
Desired ending wood inventory stated as a percentage of next month’s production requirements
20%
Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales
$550,000
Total cost of direct materials purchases in December
45%
of direct materials purchases are paid in the month of purchase
55%
of direct materials purchases are paid in the month after purchase
At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must
plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
Cash balance, September 1 (from a summer job)
$8,050
Purchase season football tickets in September
140
Additional entertainment for each month
220
Pay fall semester tuition in September
4,200
Pay rent at the beginning of each month
530
Pay for food each month
480
Pay apartment deposit on September 2 (to be returned December 15)
530
Part-time job earnings each month (net of taxes)
1,050
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions
below.
At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
Cash balance, September 1 (from a summer job)
$9,060
Purchase season football tickets in September
120
Additional entertainment for each month
310
Pay fall semester tuition in September
4,900
Pay rent at the beginning of each month
440
Pay for food each month
250
Pay apartment deposit on September 2 (to be returned December 15)
600
Part-time job earnings each month (net of taxes)
1,120
a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign.
KATHERINE MALLOYCash BudgetFor the Four Months Ending December 31…
Chapter 9 Solutions
Managerial Accounting (5th Edition)
Ch. 9 - (Learning Objective 1) Which term describes the...Ch. 9 - (Learning Objective 1) Benefits of budgeting...Ch. 9 - Prob. 3QCCh. 9 - Prob. 4QCCh. 9 - Prob. 5QCCh. 9 - Prob. 6QCCh. 9 - Prob. 7QCCh. 9 - Prob. 8QCCh. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Short Exercises S9-1 Order of preparation and...Ch. 9 - Explain why companies use zero-based budgeting...Ch. 9 - Understanding key terms and definitions (Learning...Ch. 9 - Sales Budget (Learning Objective 2) Jefferson...Ch. 9 - Production budget (Learning Objective 2) Nichols...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Prob. 9.7SECh. 9 - Prob. 9.8SECh. 9 - Prob. 9.9SECh. 9 - Prob. 9.10SECh. 9 - Prob. 9.11SECh. 9 - Cash payments budget (Learning Objective 3) Finley...Ch. 9 - Cash budget (Learning Objective 3) SaveCo...Ch. 9 - Prob. 9.14SECh. 9 - Prob. 9.15SECh. 9 - Identify ethical standards violated (Learning...Ch. 9 - Prob. 9.17AECh. 9 - Sales budget for a retail organization (Learning...Ch. 9 - Prob. 9.19AECh. 9 - Production budget (Learning Objective 2) Hoffman...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Production and direct materials budgets (Learning...Ch. 9 - Direct labor budget (Learning Objective 2)...Ch. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Operating expenses budget and an income statement...Ch. 9 - Budgeted income statement (Learning Objective 2)...Ch. 9 - Prob. 9.27AECh. 9 - Cash collections budget (Learning Objective 3)...Ch. 9 - Cash payments budget (Learning Objective 3) The...Ch. 9 - Prob. 9.30AECh. 9 - Prob. 9.31AECh. 9 - Budgeted balance sheet (Learning Objective 3) Use...Ch. 9 - Prob. 9.33AECh. 9 - Prob. 9.34AECh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.37BECh. 9 - Prob. 9.38BECh. 9 - Prob. 9.39BECh. 9 - Prob. 9.40BECh. 9 - Direct materials budget (Learning Objective 2) Moe...Ch. 9 - Prob. 9.42BECh. 9 - Prob. 9.43BECh. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Prob. 9.45BECh. 9 - Prob. 9.46BECh. 9 - Prob. 9.47BECh. 9 - Prob. 9.48BECh. 9 - Prob. 9.49BECh. 9 - Combined cash budget (Learning Objective 3)...Ch. 9 - Sales and cash collections budgets (Learning...Ch. 9 - Prob. 9.52BECh. 9 - Prob. 9.53BECh. 9 - Prob. 9.54BECh. 9 - Prob. 9.55BECh. 9 - Prob. 9.56BECh. 9 - Comprehensive budgeting problem (Learning...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.60APCh. 9 - Cash budgets (Learning Objective 3) Elis...Ch. 9 - Prob. 9.62APCh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.64APCh. 9 - Problems Group B P9-65B Comprehensive budgeting...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.68BPCh. 9 - Cash budgets (Learning Objective 3) Ivans...Ch. 9 - Combined cash budget and a budgeted balance sheet...Ch. 9 - Prob. 9.71BPCh. 9 - Prepare comprehensive budgets for a retailer...Ch. 9 - Prob. 9.73SCCh. 9 - Discussion Questions 1. The sales budget is the...Ch. 9 - Budgeting for a Single Product In this activity,...Ch. 9 - Ethics and budgetary slack (Learning Objectives 1,...Ch. 9 - Prob. 9.77ACT
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700 in April. and 2,900 in May. The required ending inventory is 20% of the next months sales, and the beginning inventory on January 1 was 600 units. Prepare a production budget for the first four months of the year.arrow_forwardInstruction: I want you to prepare a production budget of Learning is Fun Company with the provided information below. Learning is Fun Company forecasts sales in units for January to May as follows: Jan Feb Mar Apr 2,800 May 3,000 Units 2,000 2,200 2,500 Additional Information: • The Company would like to maintain 100 units in its ending inventory at the end of each month. • Beginning inventory at the start of January amounts to 50 units.arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $7,380 Purchase season football tickets in September 100 Additional entertainment for each month 260 Pay fall semester tuition in September 4,000 Pay rent at the beginning of each month 360 Pay for food each month 200 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 920 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOY Cash Budget For the Four Months Ending December…arrow_forward
- At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla WescottCash BudgetFor the Four Months Ending…arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $7,180 Purchase season football tickets in September 100 Additional entertainment for each month 250 Pay fall semester tuition in September 3,900 Pay rent at the beginning of each month 350 Pay for food each month 200 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 890 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. b. Are the four monthly budgets that are presented prepared as static…arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $7,650 Purchase season football tickets in September 100 Additional entertainment for each month 270 Pay fall semester tuition in September 4,100 Pay rent at the beginning of each month 370 Pay for food each month 210 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 950 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. KATHERINE MALLOYCash BudgetFor the Four Months…arrow_forward
- At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,250 Purchase season football tickets in September 160 Additional entertainment for each month 250 Pay fall semester tuition in September 4,800 Pay rent at the beginning of each month 600 Pay for food each month 550 Pay apartment deposit on September 2 (to be returned December 15) Part-time job earnings each month (net of taxes) 600 1,200 a. Prepare a cash budget for September, October, November, and December. Answer + Check Figure: December 31 cash balance, $3,490 b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? What are the budget implications for Craig Kovar? C.arrow_forwardAt the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September 210 Additional entertainment for each month 275 Pay fall semester tuition in September 3,700 Pay rent at the beginning of each month 600 Pay for food each month 235 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 1,400 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign. Katherine MalloyCash BudgetFor the Four Months Ending December 31…arrow_forwardAt the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,250 Purchase season football tickets in September 160 Additional entertainment for each month 250 Pay fall semester tuition in September 4,800 Pay rent at the beginning of each month 600 Pay for food each month 550 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,200 Prepare a cash budget for September, October, November, and December. Answer Check Figure: December 31 cash balance, $3,490 Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? What are the budget implications for…arrow_forward
- At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September 210 Additional entertainment for each month 275 Pay fall semester tuition in September 3,700 Pay rent at the beginning of each month 600 Pay for food each month 235 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 1,400 Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?Static c. Malloy can see that her present plan will not provide sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $fill in…arrow_forwardAt the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Line Item Description Amount Cash balance, September 1 (from a summer job) $7,870 Purchase season football tickets in September 110 Additional entertainment for each month 270 Pay fall semester tuition in September 4,200 Pay rent at the beginning of each month 380 Pay for food each month 220 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 980 Question Content Area a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments. Craig KovarCash BudgetFor the Four Months Ending…arrow_forwardAt the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: $6,650 Cash balance, September 1 (from a summer job) Purchase season football tickets in September 90 Additional entertainment for each month 230 Pay fall semester tuition in September 3,600 Pay rent at the beginning of each month 320 Pay for food each month 180 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 820 a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outfiows, a decrease in cash or cash payments. Craig Kovar Cash Budget For the Four Months Ending December 31 Line Item Description Estimated cash receipts from: Total cash recei Less…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY