Reference no: EM13596187
Battery Power, a family owned battery store, began Oct w/ $10,500 cash. Management forcasts that collections from credit customers will be $11,000 in October and $15,000 in November. The store is scheduled to receive $6,000 cash on a business note receivable in October. Projected cash payments include inventory purchases and operating expenses.
Battey Pwer's bank requires a $10,000 minimum balance in the store's checking account. At the end of any month when the account balance dips below $10,000, the bank automatically extends credit to the store in multiples of $1,000. Battery Power borrows as little as possible and pays back loans in quarterly installments of $2,000, plus 4% interest on the entire unpaid principal. The first payment occurs three month after the loan.
a.) Prepare Battery Power's cash budget for October and November
b.) How much cash wil Battery Power borrow in November if collections from customers that month total $12,000 instead of $15,000?
2..) Western Outfitters, Inc., revenue and expense information for April follows:
- Sales revenue 560,000
- Cost of goods sold(standard)342,000
- Direct materials price variance 2,000 F
- Direct materials efficiency variance 6,000 F
- Direct labor price variance 4,000 U
- Direct Labor efficiency Variance 2,000 F
- Overhead flexible budget variance3,500 U
- Production volume variance 8,000 F
Prepare a standard cost income statement for management through gross profit. Report all standard cost variance for management's use. Has management done a good or poor job on controlling costs? Explain