1 Sales Budget Johnson Inc sells hightech staplers Johnson i

1. Sales Budget: Johnson Inc. sells high-tech staplers. Johnson is preparing budgets for the quarter ending September 30, 2017 The sales price is $35 per stapler. Johnson expects the following number of units to be sold in the coming year July August September October 12,000 4,000 14,500 15,000 Required Prepare a sales budget for the third quarter of the coming year, showing units and sales revenue by month and in total for the quarter. Check Figure: Total projected sales revenue for the quarter-$1,417,500 2. Production Budget: Johnson wants ending inventory to be 25 percent of the next month\'s budgeted sales in units. 3,000 units were on hand June 30. Required Prepare a production budget for the third quarter of the year. Show the number of staplers that should be produced each month as well as for the quarter in total. Check Figure: Total b?dgeted product units to produce for the quarter-41,250 3. Materials Purchases Budget Two sheets of metal are required to produce a single stapler. Johnson wants to have materials on hand at the end of each month equal to 10 percent of the following month\'s production needs. The materials inventory on June 30 is 2,500 sheets of metal. October production is budgeted for 15,125 units. Required: Prepare a direct materials purchases budget for metal sheets for the quarter ending September 30. Show how many sheets of metal should be purchased each month as well as for the quarter in total. Check Figure: Total budgeted units of material to purchase for the quarter -83,025 4. Cash Payments of Materials Purchases Johnson Inc. purchases 3.00 each. Forty percent of a month\'s purchases are paid for in the month of purchase; the other 60 percent is raw materials on account for use in production. Sheets of metal used in production cost paid for in the following month. No discount terms are available. The accounts payable balance on June 30 is $43,200

Solution

July August September Quarter October Budgeted sales in units 12000 14000 14500 40500 15000 X Price per unit 35 35 35 35 35 Sales 420000 490000 507500 1417500 525000 Budgeted Cash receipt July August September Quarter Accounts receivable 105000 70000 175000 Collection for July 210000 126000 84000 420000 Collection for August 245000 147000 392000 98000 Collection for September 253750 253750 253750 Total collection 315000 441000 484750 1240750 351750 Cash budget July August September Quarter Beginning cash balance 125000 42860 42505 125000 Cash receipts 315000 441000 484750 1240750 Cash available 440000 483860 527255 1365750 Cash payment Materials budget 30390 79605 86250 196245 Labor budget 192500 192500 192500 577500 Manufacturing OH budget 47500 47500 47500 142500 S&A expense budget 61750 61750 61750 185250 Equipment Purchases 65000 50000 115000 Dividends 60000 60000 Total cash payments 397140 441355 438000 1276495 Balance before financing 42860 42505 89255 89255 Borrowing Principal repayment Interest Ending cash balance 42860 42505 89255