Whooper plans the following for the upcoming quarter:
Month Sales: Oct - $3,000,000.00 Nov - $3,450,000.00 Dec-$4,200,000.00
The company projects cash collections a payments as follows:
Sales 10% cash, 30% collected current month, 70% month after sale
Cost of Goods Sold
Variable Cost 36% of sales
Fixed $300,000 per month incl $50,000 depreciation expense
- Operating Expense
- Variable Selling 10% of sales
- Variable Admin 6% of sales
Fixed Selling and Admin expense $80,000 per month incl $10,000 depreciation
Variable costs are paid 70% in month incurred and 30% the following month
Fixed costs are paid monthly as they are incurred
In December an insurance payment of $20,000 is due
Accts Receivable - $860,000 of which $600,000 will be collected in Oct and the remainder in Nov
Accts Payable on Oct 1 is $400,000 and are expected to be paid in Oct
Cash on hand on Oct 1 is $600,000
Minimum cash is $100,000; the company borrows at $100,000 increments at 1% monthly
Prepare a cash budget for the month of October (only) based on the above