Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 4, Problem 22P
Wright Lighting Fixtures
Wright maintains an ending inventory for each month in the amount of one and one-half times the expected sales in the following month. The ending inventory for February (March’s beginning inventory) reflects this policy. Materials cost
Complete a production schedule and a summary of cash payments for March, April, and May. Remember that production in any one month is equal to sales plus desired ending inventory minus beginning inventory.
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Copley Paper Supply expects to have the sales and expenses shown for May, June,and July. The company expects to receive 70% of the sales in the month of the sale,25% thefollowing month, and 5% to be uncollectible. The company’s policy to paymanufacturing cost includes 65% in the month incurred and 35% the followingmonth. All other costs are paid in the month incurred. In addition, the company mustpay an income tax payment in July, which the company estimates will be 10% of totalsales for the quarter. The company will also receive interest revenue of $1,200 inJune.
Prepare the cash budget for the three months if the cash balance as of May 1, 2015,totaled $102,000. The company requires a $100,000 minimum cash balance.
Wright Lighting Fixtures forecasts its sales in units for the next four months as follows:
March
15,000
April
17,000
May
14,500
June
13,000
Wright maintains an ending inventory for each month in the amount of two and one-half times the expected sales in the following month. The ending inventory for February (March’s beginning inventory) reflects this policy. Materials cost $7 per unit and are paid for in the month after production. Labor cost is $11 per unit and is paid for in the month incurred. Fixed overhead is $16,500 per month. Dividends of $20,900 are to be paid in May. The firm produced 14,000 units in February.
Complete a production schedule and a summary of cash payments for March, April, and May. Remember that production in any one month is equal to sales plus desired ending inventory minus beginning inventory.
The Boswell Corporation forecasts its sales in units for the next four months as follows: March 11,000 April 13,000 May 10,500 June 9,000 Boswell maintains an ending inventory for each month in the amount of three times the expected sales in the following month. The ending inventory for February (March's beginning inventory) reflects this policy. Materials cost $8 per unit and are paid for in the month after production. Labour cost is $12 per unit and is paid for in the month incurred. Fixed overhead is $14,500 per month. Dividends of $20,500 are to be paid in May.
Chapter 4 Solutions
Foundations of Financial Management
Ch. 4 - What are the basic benefits and purposes of...Ch. 4 - Explain how the collections and purchases...Ch. 4 - With inflation, what are the implications of using...Ch. 4 - Explain the relationship between inventory...Ch. 4 - Prob. 5DQCh. 4 - Discuss the advantage and disadvantage of level...Ch. 4 - What conditions would help make a percent-of-sales...Ch. 4 - Prob. 1PCh. 4 - Philip Morris expects the sales for his clothing...Ch. 4 - Galehouse Gas Stations Inc. expects sales to...
Ch. 4 - The Alliance Corp. expects to sell the following...Ch. 4 - Prob. 5PCh. 4 - Cyber Security Systems had sales of 3,500 units at...Ch. 4 - Dodge Ball Bearings had sales of 15,000 units at...Ch. 4 - Sales for Ross Pro’s Sports Equipment are expected...Ch. 4 - Vitale Hair Spray had sales of 13,000 units in...Ch. 4 - Delsing Plumbing Company has beginning inventory...Ch. 4 - On December 31 of last year, Wolfson Corporation...Ch. 4 - At the end of January, Higgins Data Systems had an...Ch. 4 - At the end of January, Mineral Labs had an...Ch. 4 - Convex Mechanical Supplies produces a product with...Ch. 4 - The Bradley Corporation produces a product with...Ch. 4 - Sprint Shoes Inc. had a beginning inventory of...Ch. 4 - J. Lo’s Clothiers has forecast credit sales for...Ch. 4 - Simpson Glove Company has made the following sales...Ch. 4 - Watt’s Lighting Stores made the following sales...Ch. 4 - Ultravision Inc. anticipates sales of $290,000...Ch. 4 - The Denver Corporation has forecast the following...Ch. 4 - Wright Lighting Fixtures forecasts its sales in...Ch. 4 - The Volt Battery Company has forecast its sales in...Ch. 4 - Graham Potato Company has projected sales of...Ch. 4 - Harry’s Carryout Stores has eight locations. The...Ch. 4 - Archer Electronics Company’s actual sales and...Ch. 4 - Prob. 27PCh. 4 - The Manning Company has financial statements as...Ch. 4 - Conn Man’s Shops, a national clothing chain, had...
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