Calculate the forecast direct material cash payments

Reference no: EM132476277

The Cash Budget

Question 1: If needed, copy the sales from the first quarter operating budget. Ensure that the sales revenues for January through March is the same as that on the operating budget.

Question 2: Using an aging of the collection period, as provided by the credit manager, forecast cash receipts by month. Calculate total cash receipts for January through March. For each month's cash disbursements, you are to assume that half of the direct material payments are from the current month's purchases and half are from the prior month's purchases. All selling and administrative expenses are paid in the month incurred.

Question 3: Calculate the forecast direct material cash payments by month.

Question 4: Determine the timing of a capital expenditure. You are to decide in which month to invest a significant amount of cash in a facility expansion.

Question 5: Determine the timing and amount of financing. You are also to decide on the timing and amount of financing that will cover any month in which you do not meet the compensating cash balance requirement.

Attachment:- The Operating and Cash Budgets.rar

Reference no: EM132476277

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