1. The companys single product sells for Tk 23 per unit.

Budgeted sales in units for the

next four quarters are 11500, 34500, 46000 and 23000 units.70% of the sales are
collected in the quarter in which the sale is made and the remaining 30% are collected in
the following quarter. On January 1, 2016 the companys balance sheet showed 103500 in
accounts receivable, all of which will be collected in the first quarter of the year and bad
debts are negligible and can be ignored.
2. The company desires an ending finished goods inventory at the end of the each quarter
25% of the budgeted unit sales for the next quarter. On December 31, the company had
2875 units on hand.
3. 15 pounds of raw materials are required to complete one unit of product. The company
requires ending raw material inventory at the end of each quarter equal to 12% of the
following quarters production needs. On December 31, 2015 the company had 35190
pounds of raw materials on hand.Raw materials cost tk .30 per pound. Raw material
purchases are paid for in the following pattern: 50% paid in the quarter the purchases are
made and remaining 50% paid in the following quarter. On January 1 2016, the company
balance sheet showed tk 29670 in accounts payable for raw materials purchases, all of
which will be paid for in the first quarter of the year.
4. Each unit requires .30 direct labor hours and direct laborers are paid Tk 15 per hour.
5. The companys variable manufacturing overhead rate is Tk 4 per direct labor hour and the
companys fixed manufacturing overhead is Tk 70000 per quarter. The only non cash
item included in fixed manufacturing overhead is depreciation, which is Tk 20000 per
quarter.
6. Cash budget builds on earlier schedules and on additional data. Data are provided below:
The beginning cash balance is Tk 46,700. Management plans to spend Tk 150,000 during the
year on equipment purchases: tk 60,000 in the 1 st quarter, Tk 40,000 in the 2 nd quarter, Tk
30,000 in the 3rd quarter and Tk 20,000 in the 4th quarter. The board of director has approved
cash dividends Tk 8000 per quarter. Management would like to have a cash balance of at
least Tk 30,000 at the beginning of each quarter for contingencies.
Jessy Corporation has an agreement with a local bank that allows the company to borrow in
increments of tk 10000 at the beginning of each quarter up to a total loan balance of Tk
150,000. The interest rate on these loans is 1% per month and for simplicity we will assume

that interest is not compounded. The company would as far as its able, repay the loan plus
accumulated interest at the end of the year.