Clay Corporation has projected sales and production in units

Clay Corporation has projected sales and production in units for the second quarter of the coming year as follows Sales Production 53,00043,000 63,000 61,500 51,50051,500 Required: a. Cash-related production costs are budgeted at $5.45 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $130,000 per month. The accounts payable balance on March 31 totals $220,000, which will be paid in April. Prepare a schedule for each month showing budgeted cash disbursements for Clay Corporation April May June Production cost Cash disbursement Production costs this month Production costs prior month Selling and administrative 0 Total disbursements

Solution

220000

(A/c payable)

201105

(335175-134070)

168405

(280675-112270)

9300

(10% of feb sales)

132000

(30% of march sales)

44000

(10% of march sales)

456550

(60%of april sales)

228165

(30%of April sales)

76055

(10%of april sales)

370230

(60%of may sales)

185115

(30% of May sales)

542430

(60% of june sales)

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	April	May	June
Production Cost (production×$5.45/-)	335175	280675	280675
Cash Disbursement
This mnth (40%)	134070	112270	112270
Prior mnth	220000 (A/c payable)	201105 (335175-134070)	168405 (280675-112270)
Selling and admn	130000	130000	130000
Total disbursement	484070	443375	410675