The company expects to sell about 35 of its merchandise for

Reference no: EM13609144

The treasure of Unisyms Company has accumulated the following budget information for the first two months of the coming year:

Sales $450,000 $520,000
Manufacturing $290,000 $350,000
Selling & Admin. expenses $41,000 $46,4000
Capital additions $250,000 -------

The company expects to sell about 35% of its merchandise for cash of sales on account 80% are expected to be collected in full in the month of the sale and remainder in the month following the sale. One-fourth of the manfacturing costs are expected to be paid in the month in which they are incurred and the other three-fourth in the following month. Depreciation, insurance, and property taxes represents $64,400 of the probable monthly selling and administrative expenses. Insurance is paid in April. Of the remainder of the selling and adminstrative expenses, one-half are expected to be paid in the month in which they are incurred, with the balance paid in the following month. Capital additions of $250,000 are expected to be paid in March. Current assets of March 1 are composed of accounts payable of $121,500($102,2000 for materials purchases and $19,5000 for operating expenses). Management desires to maintain a minimum cash balance of $20,000.

Reference no: EM13609144

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