Reference no: EM132526448

Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:

                                       April                May                    June

Sales                          55,000        45,000              65,000

Production                    65,000           55,000              55,000

• Cash-related production costs are budgeted at $7 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $110,000 per month. The accounts payable balance on March 31 totals $193,000, which will be paid in April.

• All units are sold on account for $16 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totalled $520,000 ($100,000 from February's sales and the remainder from March).

Required:

Question a) Create a schedule for each month showing budgeted cash disbursements for Tilson Company.

Question b) Create a schedule for each month showing budgeted cash receipts for Tilson Company.