1) Booth Inc. has the following information for its first year of operations:Revenues (250,000 units)Manufacturing costs:MaterialsVariable cash costsFixed cash costsDepreciation (fixed)Marketing & administrative costs:Marketing (variable)Marketing depreciationAdministrative (fixed)Administrative depreciationTotal costsOperating profitsBeginning inventoryMerchandise purchasesSalesEnding inventoryAll depreciation charges are fixed and are expected to remain the same for the second year.Sales volume is expected to increase by 13%, and sales prices are expected to increase by4%. Material costs per unit are expected to increase by 8%. Other unit variablemanufacturing costs are expected to increase by 10% per unit. Fixed manufacturing costs(other than depreciation) are expected to increase by 6%.Variable marketing costs per unit will remain constant. Administrative costs (other thandepreciation) are expected to increase by 12%.Assume there are no inventories. Booth operates on a cash basis.a. Prepare a budgeted income statement for the second year.2) Lines Company is a retailer that sells a single product. The company's inventories,production, and sales in units for the next three months have been budgeted as follows:September44,5003,00037,50010,000$ 3,730,000October10,00060,00060,00010,000$ 665,000904,000360,000445,000475,000113,000450,55042,000$ 3,454,550$ 275,450November December10,00010,00070,00035,00070,00040,00010,0005,000Units are sold for $12 each. Thirty percent of all sales are paid for in the month of sale andthe balance is paid for in the following month.Merchandise is purchased for $7 per unit. Forty percent of purchases are paid for in themonth of the purchase and the remainder is paid for in the month following purchase.Marketing and administrative expenses are expected to total $140,000 each month. Forty-five percent of these expenses will be paid in the month in which they are incurred and thebalance will be paid in the following month.Cash at September 30 totaled $90,000. A payment of $250,000 for the purchase ofequipment is scheduled for November, and a dividend of $150,000 is to be paid inDecember. Ignore depreciation for purposes of preparing the schedules.a. Prepare a cash collections budget for October, November, and December.b. Prepare a cash disbursements budget including merchandise purchases and marketingand administrative expenses for October, November, and Decemberc. Prepare a cash budget for October, November, and December. There is no minimum

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1) Booth Inc. has the following information for its first year of operations: Revenues (250,000 units) Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing & administrative costs: Marketing (variable) Marketing depreciation Administrative (fixed) Administrative depreciation Total costs Operating profits $ 3,730,000 $ 665,000 904,000 360,000 445,000 475,000 113,000 450,550 42,000 454,550 $ 275,450 All depreciation charges are fixed and are expected to remain the same for the second year. Sales volume is expected to increase by 13%, and sales prices are expected to increase by 4%. Material costs per unit are expected to increase by 8%. Other unit variable manufacturing costs are expected to increase by 10% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6%. Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 12%. Assume there are no inventories. Booth operates on a cash basis.

1) Booth Inc. has the following information for its first year of operations: Revenues (250,000 units) Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing & administrative costs: Marketing (variable) Marketing depreciation Administrative (fixed) Administrative depreciation Total costs Operating profits $ 3,730,000 $ 665,000 904,000 360,000 445,000 475,000 113,000 450,550 42,000 454,550 $ 275,450 All depreciation charges are fixed and are expected to remain the same for the second year. Sales volume is expected to increase by 13%, and sales prices are expected to increase by 4%. Material costs per unit are expected to increase by 8%. Other unit variable manufacturing costs are expected to increase by 10% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6%. Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 12%. Assume there are no inventories. Booth operates on a cash basis.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 6EA: During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of...

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