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ankoles [38]
3 years ago
7

Adams Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sel

ls laser pointers over the Internet. Adams expects sales in January 2019 to total $340,000 and to increase 15 percent per month in February and March. All sales are on account. Adams expects to collect 66 percent of accounts receivable in the month of sale, 22 percent in the month following the sale, and 12 percent in the second month following the sale.
Required:
A. Prepare a sales budget for the first quarter of 2019.
B. Determine the amount of sales revenue Adams will report on the first 2019 quarterly pro forma income statement.
C. Prepare a cash receipts schedule for the first quarter of 2019.
D. Determine the amount of accounts receivable as of March 31, 2019.
Business
1 answer:
Andrej [43]3 years ago
7 0

Answer:

a) The Sales Budget for the 2019 first quarter will be:

January - $340,000

February - $391,000 (340,000 x 1.15)

March - $449,650 (391,000 x 1.15)

b) The amount of sales revenue to be reported for the first 2019 quarter is $1,180,650, i.e. the total of sales from January to March.  This equals $1,180,650 (340,000 + 391,000 + 449,650).

c) The cash receipts schedule for the first quarter of 2019 will look like this:

January - 66% of $340,000 = $224,400.

February - 66% of $391,000 + 22% of $340,000 = $332,860.

March - 66% of $449,650 + 22% of $391,000 + 12% of $340,000 = $373,589.

Total cash receipts for the first quarter is $930,849 (224,400 + 332,860 + 373,589)

d) The amount of accounts receivable as of March 31, 2019 is $249,801 (the difference between total quarter sales of $1,180,650 and total quarter cash receipts of $930,849)

Explanation:

A Sales Budget is prepared to determine the sales outlook given certain units of sales at given price units based on prevailing business environment.  It is an educated guess, like all estimates, to value the outcome of a company's sales efforts in the future.

The sales budget determines the revenue to be anticipated and reported.  It is also the basis for cash receipts and the balance of the accounts receivable.

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g Romans sells the Regular blend for $3.60 per pound and the DeCaf blend for $4.40 per pound. Romans would like to place an orde
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Romans Food Market, located in Saratoga, New York, carries a variety of specialty foods from around the world. Two of the stores leading products use the Romans Food Market name: Romans Regular Coffee and Romans DeCaf Coffee. These coffees are blends of Brazilian Natural and Columbian mild coffee beans, which are purchased from a distributor from New York City. Because Romans purchases large quantities the coffee beans may be purchased om an as need basis for the price of 10% higher than the market price the distributor pays for the beans. The current market price is $0.47 per pound for Brazilian Natural and $0.62 per pound for Columbian Mild The composition of each coffee blend are as follows:

                                                             

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Romans sells the Regular blend for $3.60 per pound and the DeCaf blend for $4.40 per pound. Romans would like to place an order for the Brazilian and Colombian coffee beans that will enable the production of 1000 pounds of Romans Regular coffee and 500 pounds of Romans DeCaf coffee. The production cost is $0.80 per pound for the Regular blend. Because of the extra steps required to produce DeCaf, the production cost for the DeCaf blend is $1.05 per pound. Packaging costs for both products are $0.25 per pound. Formulate a linear programming model that can be used to determine the pounds of Brazilian Natural and Colombian Mild that will maximize the total contribution to profit.

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\mathbf{Max \ Z =  2.033 BR + 2.583 BD + 1.868 CR + 2.418 CD}

Explanation:

From the given information:

The total revenue can be illustrated as :

Total revenue = 3.6 BR +  4.4 BD + 3.6 CR + 4.4 CD

On the other hand; the total cost  of the beans is:

= 1.1 (0.47 BR  + 0.47 BD + 0.62 CR + 0.62 CD)

=  0.517  BR + 0.517 BD + 0.682 CR + 0.682 CD

Also; The total production cost is :

= 0.8 BR + 1.05 BD + 0.8 CR + 1.05 CD

The total profit  = Total revenue - Total Cost of Beans - Total Production Cost

The total profit  =  \left[\begin{array}{}3.6 BR   + 4.4 BD + 3.6 CR + 4.4 CD\\- (0.517  BR + 0.517 BD + 0.682 CR + 0.682 CD)\\-(0.8 BR + 1.05 BD + 0.8 CR + 1.05 CD)\end{array}\right]

The total profit  = 2.033 BR + 2.583 BD + 1.868 CR + 2.418 CD

Therefore the  linear programming model represents the Objective function of the total profit as:

\mathbf{Max \ Z =  2.033 BR + 2.583 BD + 1.868 CR + 2.418 CD}

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