(Master budget preparation) Sopchoppy Company manufactures a red industrial dye. The company is preparing its 2000 master budget and has presented you with the following information.
1. The December 31, 1999, balance sheet for the company is shown below. SOPCHOPPY COMPANY
December 31, 1999
Liabilities and Stockholders’ Equity
2,148 Raw Materials Inventory
10,000 Finished Goods Inventory
$ 37,148 Prepaid Insurance
Accumulated Depreciation (20,000)
128,536 278,536 Total Liabilities and Total Assets
2. The Accounts Receivable balance at 12/31/99 represents the remaining balances of November and December credit sales. Sales were $70,000 and $65,000, respectively, 3. Estimated sales in gallons of dye for January through May 2000 are shown below. January
Each gallon of dye sells for $12.
4. The collection pattern for accounts receivable is as follows: 70 percent in the month of sale; 20 percent in the first month after the sale; 10 percent in the second month after the sale. Sopchoppy expects no bad debts and no customers are given cash discounts. 5. Each gallon of dye has the following standard quantities and costs for direct materials and direct labor: 1.2 gallons of direct material (some evaporation occurs
during processing) @ $0.80 per gallon
1/2 hour of direct labor @ $6 per hour
Variable overhead is applied to the product on a machine-hour basis. It takes 5 hours of machine time...
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