“You are the Assistant Controller for the RJC Corporation and have been given the responsibility for formulating the budget for the upcoming year. The RJC
Corporation is experiencing a period of rapid expansion, so production
planning, inventory levels and cash flow will be exceedingly important.
The following information will be used to
prepare the budget:
1.  RJC Corporation has experienced an excellent
record in accounts receivable collection and expects this trend to
continue. Sixty percent of billings are
collected in the month after the sale and 40% in the second month after the
sale. Uncollectible accounts are minimal
and can be ignored in your analysis.
2.
The purchase of parts is RJC
Corporations largest expenditure: The
cost of these items is equal to 50% of sales.
Sixty percent of these parts are received one month prior to sale and
40% are received during the month of sale.
3.
Eighty percent of accounts
payable have been paid one month after receipt of purchases and the remaining
20% have been paid two months after receipt.
4.
Wages, including fringe
benefits, are a function of sales volume and are equal to 20% of the current
months sales. These wages are paid in
the month incurred.
5.
General and administrative
expenses include:
A.
$480,000 in salaries
B.
Product promotions, 3% of Sales
C.
$240,000 in property taxes
D.
$360,000 for insurance
E.
$300,000 in utilities
F.
$600,000 in depreciation
G.
Workers Compensation Insurance,
1.5% of Direct Labor
All expenses except property taxes, Product
Promotions and Workers Compensation Insurance are incurred uniformly throughout
the year. Property taxes are paid in
four equal installments in the last month of each calendar quarter.
6.
The company makes income tax
payments in the first month of each quarter based on the income for the prior
quarter. The company is subject to an
effective income tax rate of 40%. The
pretax income for the last quarter of this year is projected to be $612,000.
7.
Factory overhead is a function
of the cost of Direct Labor, and is predetermined at 85%,

Required:
A.
Prepare the spreadsheets from the templates with
the necessary figures.
B.
Sales for June were 90% of
budgeted. Prepare a flexible budget and
a performance report for the month of June.
C.
Sales for each month are listed
below

November

1,798,500.00

July

3,270,000.00

December

1,853,000.00

August

3,270,000.00

January

1,962,000.00

September

3,488,000.00

February

2,180,000.00

October

3,488,000.00

March

1,962,000.00

November

3,270,000.00

April

2,398,000.00

December

3,706,000.00

May

2,725,000.00

January

3,597,000.00

June

3,052,000.00

You are the Assistant Controller for the
RJC Corporation and have been given the responsibility for formulating the
budget for the upcoming year. The RJC
Corporation is experiencing a period of rapid expansion, so production
planning, inventory levels and cash flow will be exceedingly important.The following information will be used to
prepare the budget:1.
RJC Corporation has experienced an excellent
record in accounts receivable collection and expects this trend to
continue. Sixty percent of billings are
collected in the month after the sale and 40% in the second month after the
sale. Uncollectible accounts are minimal
and can be ignored in your analysis.2.
The purchase of parts is RJC
Corporations largest expenditure: The
cost of these items is equal to 50% of sales.
Sixty percent of these parts are received one month prior to sale and
40% are received during the month of sale.3.
Eighty percent of accounts
payable have been paid one month after receipt of purchases and the remaining
20% have been paid two months after receipt.4.
Wages, including fringe
benefits, are a function of sales volume and are equal to 20% of the current
months sales. These wages are paid in
the month incurred.5.
General and administrative
expenses include:A.
$480,000 in salariesB.
Product promotions, 3% of SalesC.
$240,000 in property taxesD.
$360,000 for insuranceE.
$300,000 in utilitiesF.
$600,000 in depreciationG.
Workers Compensation Insurance,
1.5% of Direct Labor All expenses except property taxes, Product
Promotions and Workers Compensation Insurance are incurred uniformly throughout
the year. Property taxes are paid in
four equal installments in the last month of each calendar quarter.6.
The company makes income tax
payments in the first month of each quarter based on the income for the prior
quarter. The company is subject to an
effective income tax rate of 40%. The
pretax income for the last quarter of this year is projected to be $612,000.7.
Factory overhead is a function
of the cost of Direct Labor, and is predetermined at 85%,Required:A.
Prepare the spreadsheets from the templates with
the necessary figures. B.
Sales for June were 90% of
budgeted. Prepare a flexible budget and
a performance report for the month of June.C.
Sales for each month are listed
belowNovember 1,798,500.00 July 3,270,000.00 December 1,853,000.00 August 3,270,000.00 January 1,962,000.00 September 3,488,000.00 February 2,180,000.00 October 3,488,000.00 March 1,962,000.00 November 3,270,000.00 April 2,398,000.00 December 3,706,000.00 May 2,725,000.00 January 3,597,000.00 June 3,052,000.00 “