+1(805) 568 7317

question opq co 39 s management asks you to prepare its master budget usingthe follo 4292714


OPQ Co's management asks you to prepare its master budget usingthe following information. The budget is to cover the months ofJuly, August, and September of 2016. Assets Liabilities and EquityCash $50,000 Accounts Payable $63,818 Accounts Receivable 175,000Short-Term Notes Payable 12,000 Raw Materials Inventory 30,798 *Total Current Liabilities $75,818 Finished Goods Inventory 96,600** Long-Term Notes Payable 200,000 Total Current Assets $352,398Total Liabilities 275,818 Equipment 480,000 Common Stock 435,000Less: Accumulated Depreciation 90,000 Retained Earnings 31,580Equipment, Net 390,000 Total Stockholder's Equity 466,580 TotalAssets $742,398 Total Liabilities and Equity $742,398 *2,425 pounds@$12.70, rounded to nearest whole dollar. **8,400 units @ $11.50per unit.

Additional Information: a. Sales for June total 10,000 units,Expected sales (in units) are: 10,500 in July, 9,500 in August,10,000 in September, and 10,500 in October. The product's sellingprice is $25 per unit. b. Company policy calls for a given month'sending Finished Goods Inventory to equal 80% of the next month'sexpected unit sales. The June 30's Finished Goods Inventory is8,400 units, which complies with the policy. The product'smanufacturing cost is $11.50 per unit, including per unit cost of$6.35 for materials (0.5lbs @ $12.70 per lb.), $3.75 for DirectLabor (1/4 hr. * $15per Direct Labor rate per hour), $0.90 perVariable Overhead, and $0.50 for Fixed Overhead. Fixed Overheadconsists entirely of $5,000 of monthly Depreciation Expense. OPQpolicy also calls for a given month's ending Raw MaterialsInventory to equal 50% of next month's expected materials neededfor production. The June 30 inventory is 2,425 units of materials,which complies with the policy. The company expects to have 2,100units of materials inventory on September 30. c. Salesrepresentatives' commissions are 12% of sales and are paid in themonth of the sales. The sales manager's monthly salary will be$3,500 in July and $4,000 per month thereafter. d. Monthly Generaland Administrative Expenses include $8,000 Administrative Salariesand 0.9% monthly interest on the Long-Term Notes Payable. e. Thecompany expects 30% of sales to be for cash and the remaining 70%on credit. Receivables are collected in full in the month followingthe sale (none is collected in the month of the sale). f. AllDirect Materials purchases are on credit, and no payables arisefrom any other transactions. One month's purchases are fully paidin the next month. Materials cost $12.70 per pound. g. The minimumending Cash balance for all months is $50,000. If necessary, thecompany borrows enough cash using Short-Term Note to reach theminimum. Short-Term Notes require an interest payment of 1% at eachmonth-end (before any repayment). If the ending Cash balanceexceeds the minimum, the excess will be applied to repaying theShort-Term Notes Payable balance. h. Dividends of $100,000 are tobe declared and paid in August. OPQ Company Balance Sheet June 30,2016 Page 1 of 7 Chapter 23 Group Project 40 Points i. No Cashpayments for Income Taxes are to be made during July – September.Income Taxes will be assessed at 35% in the said quarter. j.Equipment purchases of $55,000 are scheduled for SeptemberRequired: Prepare the following budgets and other financialinformation as required: 1. Sales budget,, including budgeted salesfor October. 2. Production budget. 3. Direct Materials Budget.Round costs of materials purchases to the nearest dollar. 4. DirectLabor Budget. 5. Factory Overhead Budget. 6. Selling ExpenseBudget. 7. General and Administrative Expense Budget. 8. ExpectedCash Receipts from customers and the expected September 30 balanceof Accounts Receivable. 9. Expected Cash Payments for purchases andthe expected September 30 balance of Accounts Payable. 10. CashBudget. 11. Budgeted Income Statement, Budgeted Statement ofRetained Earnings, and Budgeted Balance Sheet.


"Order a similar paper and get 15% discount on your first order with us
Use the following coupon

Order Now