4
4
Solution
4-5 Calculation Of Estimated Cash Receipts:
Calculation of Cash Collection:
Jan. = Credit Sales: 440,000 Collected in the same Month; 60% i.e. 264,000 + Last month
receivables of 375,000
Feb. = Credit Sales: 680,000 Collected inthe same month: 60% i.e 272,000 + 176,000
March = Credit Sales: 784,000 Collected inthe same month: 60% i.e 470,400 + 272,000
So, Cash receipts For Jan. will be $639,000
Cash receipts For Feb. will be $584,000
6-7: 6. Variable Cost for 14,000 Units:
Direct Labor = 14,000 x 10 =$140,000
Electricity Expenses = 14,000 x 0.83 = $11,620
Total Variable Cost = $151,620
7. Fixed Cost = Electric Power + Supervisior Salaries
Fixed Cost = 1,750 + 23,400 = $25,150
8. Cost for Production of 15,000 Units are:

Opening
Receivables
Sales
Sales on Account
(80%)
Cash
Collected
Closing
Receivables
Jan 375,000 550,000 440,000 639,000 176,000
Feb. 176,000 850,000 680,000 584,000 272,000
March 272,000 980,000 784,000 742,400 470,400