Selling and administrative expenses january 15000 february

Reference no: EM13581433

Jake Company expects to have a cash balance of $45,000 on January 1, 2011.

Relevant monthly budget data for the first 2 months of 2011 are as follows.

Collections from customers: January $100,000, February $160,000.

Payments for direct materials: January $60,000, February $80,000.

Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred.

Manufacturing overhead: January $26,000, February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $10,000 in cash.

Jake Company has a line of credit at a local bank that enables it to borrow up to $25,000.

The company wants to maintain a minimum monthly cash balance of $25,000.

Instructions

Prepare a cash budget for January and February.

Reference no: EM13581433

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