Tilson Company Has Projected Sales and Production in Units for the Second

question 53

Essay

Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:
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 totaled $520,000 $(100,000 from February's sales and the remainder from March).
Required:
a.Prepare a schedule for each month showing budgeted cash disbursements for the Tilson Company.
b.Prepare a schedule for each month showing budgeted cash receipts for Tilson Company.

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Definitions:

Output

The amount of products or services that are generated by a company, sector, or nation within a specific timeframe.

Shipping Costs

Expenses associated with the transportation of goods from one location to another, often influencing pricing and supply chain decisions.

Fuel

Substances used to produce energy, especially to power engines, heating, or produce electricity.

Average Total Cost

The average expense for each unit of output, calculated by dividing the overall production cost by the total number of units produced.