Reference no: EM132592831
Question - JC Floor Design makes ceramic tiles
December sales were: 500,000 units
Selling price $2 per unit 1,000,000 total sales
The Marketing Department, projects sales to: increase by 5% in January
February sales will be 15,000 units less than January
March sales will be 3% higher than February sales
April sales will be the 5,300 units less than March
The price is not expected to increase
JC inventory policy is to maintain an ending inventory equals to 30% of next month sales. Actual inventory is 168,000 units
Clay the material to make the tiles cost $.50 per pound and each tile requires .6 pound. Actual clay inventory is 60,000 pounds and the inventory policy is to maintain an inventory equal to 25% of next month production requirement.
April production is expected to be 525,000 units. The cost of direct materials purchased in December was $150,000
Each tile requires .10 hours and the labor hourly rate is $8.00 per hour
Variable overhead rate is 20% of labor and fixed overhead is 25,000 monthly
Selling and administrative expenses are expected to be
Administrative salaries $15,000 per month
Sales salaries $12,000 per month
Sales commissions 10% of sales
70% of sales are cash sales and the remaining are collected in the next month Material are paid 60% cash and the remaining the next month
The company has the following obligations:
100,000 in dividends will be paid in February
A new machine will be acquired in January with a cost of 250,000
A short-term loan with an outstanding balance of $150,000 is used to manage the cash position. Interest on the short-term loan are 1% monthly
Taxes of last quarter were $240,000 and will be paid in March. The company tax rate is 35%. and taxes are paid in the next quarter.
REQUIRED -
Compute the materials to be purchased in March.
Compute the Direct Materials Cost for January.
Compute Total Overhead for the quarter.
Compute Product Cost.
Compute Total sales expenses for the quarter.
Compute Selling and Administrative expenses for February.
Compute Cash Receipts for January.
Compute Total cash payments for materials in March.
Total cash available for February.
Compute ending cash balance for March.
Compute Total Cash Payments for February.
Compute the preliminary cash balance for January.
Compute the repayment of loan for February.
Compute total interest paid.
Compute Accounts Receivables in Balance Sheet.
Compute Accounts Payable in the Balance Sheet.
Compute Cost of goods sold.
Compute Finished goods inventory in Balance Sheet.
Compute Gross Profit.
Compute after tax income.