FUNDAMENTALS OF COST ACCOUNTING
6th Edition
ISBN: 9781266742040
Author: LANEN
Publisher: MCG
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Chapter 13, Problem 38E
Estimate Cash Receipts
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow:
The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.
Required
What are Varmit-B-Gone’s expected cash receipts for May, June, July, and August?
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Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow:
Subscribers
Service calls (per subscriber)
March
600
0.6
April
700
0.9
May
1,400
1.5
June
1,600
2.5
July
1,600
3.0
August
1,500
2.4
The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.
Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and…
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at
least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of
subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months
of interest follow:
March
April
May
June
July
August
Subscribers
850
950
1,650
1,850
1,850
2,000
Service calls (per
subscriber)
0.6
The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60
percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.
Service costs
0.9
1.5
2.5
3.0
2.4
Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of
service calls per subscriber should decrease by…
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at
least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of
subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months
of interest follow:
Service calls
ITT
Subscribers
(per subscriber)
March
450
0.6
April
650
0.9
May
1,450
1.4
June
1,550
2.5
1,500
July
August
3.0
1,550
2.4
The average price charged for a service call is $60. Of the service calls, 30 percent are paid in the month the service is rendered, 60
percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.
Required:
What are Varmit-B-Gone's expected cash receipts for May, June, July, and August?
Chapter 13 Solutions
FUNDAMENTALS OF COST ACCOUNTING
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - What role does the master budget play in the...Ch. 13 - What problems might arise if a firm relies solely...Ch. 13 - What is the coordinating role of budgeting?Ch. 13 - Prob. 7RQCh. 13 - Write out the inventory equation that is used to...Ch. 13 - What makes creating budgets for marketing and...Ch. 13 - Prob. 10RQ
Ch. 13 - Preparing a budget is a waste of time. The...Ch. 13 - In the Business Application feature, Using the...Ch. 13 - Prob. 13CADQCh. 13 - Would the budgeting plans for a company that uses...Ch. 13 - Government agencies are limited in spending by...Ch. 13 - What is the difference between the planning and...Ch. 13 - When might the master budget start with a forecast...Ch. 13 - In some organizations (firms, universities,...Ch. 13 - Our cash budget shows a surplus for the quarter,...Ch. 13 - Your boss asks for your estimate on the costs of a...Ch. 13 - The chapter identified four techniques used for...Ch. 13 - Role of Budgets and Plans
Cosmic Corporation is a...Ch. 13 - Human Element in Budgeting
Roller Partners is a...Ch. 13 - Estimate Sales Revenues Stubs-R-Us is a local...Ch. 13 - Estimate Sales Revenues Friendly Financial has 160...Ch. 13 - Estimate Sales Revenues Larson, Inc., manufactures...Ch. 13 - Estimate Production Levels Offenbach Son has just...Ch. 13 - Estimate Sales Levels Using Production Budgets...Ch. 13 - Estimate Inventory Levels Using Production Budgets...Ch. 13 - Estimate Production Levels: Capacity Constraints...Ch. 13 - Prob. 31ECh. 13 - Estimate Purchases and Cash Disbursements Midland...Ch. 13 - Estimate Purchases and Cash Disbursements Lakeside...Ch. 13 - Estimate Cash Disbursements Cascade, Ltd., a...Ch. 13 - Estimate Cash Collections Minot Corporation is...Ch. 13 - Estimate Cash Collections Ewing Company is...Ch. 13 - Estimate Cash Receipts Scare-2-B-U (S2BU)...Ch. 13 - Estimate Cash Receipts Varmit-B-Gone is a pest...Ch. 13 - Prepare Budgeted Financial Statements
Refer to the...Ch. 13 - Prepare Budgeted Financial Statements Cycle-1 is a...Ch. 13 - Prepare Budgeted Financial Statements Carreras Caf...Ch. 13 - Budgeting in a Service Organization Executive...Ch. 13 - Prob. 43ECh. 13 - Prob. 44ECh. 13 - Prob. 45ECh. 13 - Prob. 46ECh. 13 - Sensitivity Analysis Sanjanas Sweet Shoppe...Ch. 13 - Sensitivity Analysis Classic Limo, Inc., provides...Ch. 13 - Prob. 49ECh. 13 - Prob. 50ECh. 13 - Prepare Budgeted Financial Statements The...Ch. 13 - Prob. 52PCh. 13 - Prepare Budgeted Financial Statements Gulf States...Ch. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prepare a Production Budget Haggstrom, Inc.,...Ch. 13 - Sales Expense Budget SPU, Ltd., has just received...Ch. 13 - Budgeted Purchases and Cash Flows Mast Corporation...Ch. 13 - Prepare Budgeted Financial Statements HomeSuites...Ch. 13 - Prob. 60PCh. 13 - Comprehensive Budget Plan Brighton, Inc.,...Ch. 13 - Comprehensive Budget Plan Panther Corporation...Ch. 13 - Budgeted Financial Statements in a Retail...Ch. 13 - Cash Budgets and Sensitivity Analysis in a Retail...Ch. 13 - Prob. 66IC
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