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Cash budegt, production budget, direct material budget

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Please see the attached problem

Based on the understanding of the above scenario, Please answer the following questions.

1) Prepare the following schedule;

a. Expected cash collections for January 200X

b. Expected cash disbursement for January 200X

2) Prepare a cash budget for January 200X; indicate in the financing sector any borrowing that will be needed during January 200X.

3) Prepare a production budget for January, February and March. Based on the production budget, should Kofi Export's produce more or less units in January and March?

4) In the months of January through March, prepare direct material budget indicating the quantity of chipsets requirements in these months.

5) Using Computations to support your decision advised Kofi exports, whether to outsource the product or to keep in-house production of the chipset.

6) Should Kofi Export's accept the order from Daga Accounting Solutions an agent for Kwame & Kwame Company in Ghana West Africa? If the order is accepted, what will be the range of change in profit?

Please respond using excel.

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Solution Summary

Response provides steps to compute the cash budegt, production budget, direct material budget

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Preparation of master budget, decision on whether to accept or reject a sales order based on certain circumstances, in house production or outsource part of production process.

Kofi Exports manufactures and distributes verities of computer parts, As at December 31, 200X. The cash balance for production activities stands at
$2,500,000.00; actual exports for November and December and expected exports for January are as follows.
November December January
Cash Exports 2,600,000 2,350,000 6,050,000
Exports on Account 13,500,000 16,600,000 23,450,000
Total sales 16,100,000 18,950,000 29,500,000 Budget exports for January through March are as follows.
Month Budgeted Export
Account receivable are collected over a three month period as follows; 25% collected in the month of Export, January 420,000
50% collected when the goods are cleared at the port of discharge ( It takes one month to clear the goods from its destination); February 510,000
25% is collected the following month. March 680,000
January April 720,800
Raw materials purchase will total $17,800,000
60% of a month's inventory purchases are paid for in the month of purchase, the outstanding account payable due this month totals $2,600,000.00
Expected Depreciation and Amortization total $600,000.00 while selling and administrative will be $900,000.00

Kofi's export is expected to either purchase a new assembly line or have an in-house built assembly line. The expected purchase price
will be $15,000,000.00, whiles the estimated in-house cost to build the assembly plant will be $15,850,000.00, The company has a total of ...

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