Nbspangelo diaz has decided to go into business selling

Assignment Help Cost Accounting
Reference no: EM13378364

 

Angelo Diaz has decided to go into business selling colourful scarves which are popular among university students. He will operate the business out of a flea market, mostly on weekends. He is trying to get himself organised for the start of the first quarter. In order to do so, he will have to prepare a few budgets. Use the following information to help him achieve his goal.

Angelo estimates expected sales for January to be £800, February £1200, March £2000 and April £3,000. Gross profit ratio is 0.4. Sixty percent of the next month's sales should be kept in ending finished goods inventory.

Angelo has decided to pay himself a monthly salary of £150. He will pay his best friend £60 to help him with miscellaneous errands. He estimates that general operating costs will be £130 monthly. In addition, since his cousin is the owner of the flea market, he will only pay £100 per month in rent. Upgrading of the space will cost £500, of which £200 will be paid in January and £300 in February. All other costs must be paid for as incurred. He will begin January with £400 in the bank. Forty percent of sales are paid for in cash. The rest is put on credit: 5% of credit sales will not be received, 30% will be paid in the month of sale and 10% of those who pay in the month of sale will qualify for a 20% discount. Another 20% will be received the month following the sale and 5% the second month following the sale.

Thirty percent of the payments for merchandise are made in the month of purchase and the remaining 70% are made in the month following the purchase.
Interest is charged at a rate of 24% per year and payments of interest only are due at the end of each quarter. All loans are borrowed at the very beginning of the month and payments are made at the very end of the month. Angelo must maintain a minimum cash balance of £1,000.

Complete the following:

Help Angelo by completing the following:

1. Prepare a schedule of cash receipts for the first quarter.

2. Prepare a schedule of inventory purchases for the first quarter.

3. Prepare a schedule of cash disbursements for the first quarter.

4. Prepare a cash budget for January and February.

5. How much interest is owed on February 28?

 

 

 

 

 

 

 

 

Hand-in Assignment Question

The income statement for ABC's 2012 fiscal year is presented below. ABC manufactures one type of street lamp used on municipal roads.

Sales

2,400,000

Variable cost of goods sold

1,680,000

Variable sales commissions

120,000

Contribution margin

600,000

Selling expense

105,000

Sales commissions expense

48,000

Administrative expense

212,000

Net income

235,000

Variable costs per unit are £6.

Complete the following:

Please note: Round all answers to two decimal places.

1. Calculate break-even in pounds.

2. Calculate break-even in units.

3. Calculate break-even in pounds if the sales price increases by 10% and fixed costs increase by £12,000.

4. Calculate break-even in pounds if total sales increases by 10% and fixed costs increase by 10%.

5. Calculate sales (in pounds) to achieve £600,000 after tax.

Reference no: EM13378364

Questions Cloud

The current assets and current liabilities for apple : the current assets and current liabilities for apple computer inc. and dell inc. are shown as follows at the end of a
The adjusto corporation which is on a december 31 fiscal : the adjusto corporation which is on a december 31 fiscal year-end engaged in the following transactions during 2007 and
Prepare journal entries to record the following : prepare journal entries to record the following merchandising transactions of sheng company which applies the perpetual
During the fourth quarter of 2006 cablevision inc generated : during the fourth quarter of 2006 cablevision inc. generated excess cash which the company invested in securities as
Nbspangelo diaz has decided to go into business selling : nbspangelo diaz has decided to go into business selling colourful scarves which are popular among university students.
Use the following to answer questions 1-4gross private : use the following to answer questions 1-4gross private domestic investment 46exports of the us 9disposable income
Matt and johnny both purchase pop and chips at the same : matt and johnny both purchase pop and chips at the same convenience store. they have different tastes for pop and chips
Raffies kids a non-profit organization that provides aid to : raffies kids a non-profit organization that provides aid to victims of domestic violence lowincome families and
1 economic analysis that takes into consideration linkages : 1. economic analysis that takes into consideration linkages between markets is called ? a. partial equilibrium

Reviews

Write a Review

Cost Accounting Questions & Answers

  Cost accounting assignment

Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.

  Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

  Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  Prepare revenues budget

Prepare Revenues budget and Production budget in units

  Effect of exchange rate changes on cash and cash

Effect of exchange rate changes on cash and cash

  Corporate governance

You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.

  Cost-benefit analysis

A cost-benefit analysis of electronic medical records in primary care

  Non-annual interest rates and annuities

Theory of Interest- Non-annual interest rates and annuities

  Job costing in service organizations

How is job costing in service organizations different from job costing in manufacturing environments?

  Accounting for bad debt expense

Accounting for bad debt expense

  Accounting and partnership problems

Accounting and Partnership problems

  Development of relevant cash flows

Development of relevant cash flows - Cost estimating and financial analysis

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd