Peachtree's Siding and Window Co Peachtree's Siding and Window Co

question 30

Essay

Peachtree's Siding and Window Co.is a custom home improvement company.All sales are made on account: 30 percent of a month's sales are collected in the month of sale, 60 percent are collected in the month following the sale, and 8 percent are collected in the second month following the sale.Cash on hand on October 1 is estimated to be $32,000.
Merchandise purchases and operating expenses are paid as follows:
$$\begin{array} { | l | l | } \hline \text { In the month during which the merchardise is purchased or the cost is incured } & 80 \% \\\hline \text { In the subsequent month } & 20 \% \\\hline\end{array}$$
Peachtree's Siding and Window Co.'s budgeted income statement for each of the next three months is as follows:
$\begin{array}{lrr}&\text { August } & \text { September }&\text { October }\\ \text {Sales } &\$140,000&\$169,000&\$181,000\\ \text { Cost of goods sold: } &\\ \text { Beginning inventory } &\$16,400&\$28,900&\$25,600\\ \text { Purchases} & \underline{135,300}& \underline{141,500}& \underline{\$149,700}\\ \text {Goods available } &\$151,700&\$170,400&\$175,300\\ \text {Less: End inventory } & \underline{(28,900)}& \underline{(25,600)}& \underline{(21,200)}\\ \text { Cost of goods sold} & \underline{\$122,800}& \underline{\$144,800}& \underline{\$154,100}\\ \text { Gross profit} &\$17,200&\$24,200&\$26,900\\ \text { Operating expenses} & \underline{(11,400)}& \underline{(15,100)}& \underline{(14,300)}\\ \text {Operating income } & \underline{\$5,800}& \underline{\$9,100}& \underline{\$12,600}\\\end{array}$

Prepare a cash budget for the month of October.

Recognize and apply strategies for effective goal-setting.

Identify and adapt to various learning styles and personality types.

Implement strategies for coping with anxiety and improving time management.

Appreciate the importance of a positive attitude in personal growth.

---

Definitions:

Average Total Cost

The total cost divided by the number of units produced, representing the cost per unit of output.

Fixed Costs

Costs that remain constant regardless of the level of production or business activity.

Monopolistically Competitive

A market structure characterized by many businesses selling products or services that are similar but not identical, allowing for competition based on product differentiation, prices, and quality.

Profit-Maximizing

This refers to a strategic position sought by firms where they can generate the maximum difference between their total revenues and total costs.