activiry 4/23/2028, ANSWER THE FOLLOWING CASES. ‘ALL PAPERS SHOULD BE SUBMITTED AT EXACTLY 9:10AM AT THE CASHIER's OPFICE. LATE SUBMISSIONS WILL SHEET. Reps Corporation, a manufacturer of vases to hold flowers, decided in Octaber Year 1 that needed cash to continue aporstions. It began negotiating for a one-month bank loan af $100,000 starting November 1 ‘Year 1. The hank would charge interest at the rate of | percent per month and require the company to ‘Dhenay interest and principal on November 30 Year 1,tn considering the loan the bank requested a projected income statement and cash budget for November. ‘The following information is avatable 1a The company budgeted sales at 100,000 unlts per month in October Year 1, December Year 4, and January Year 2, and at 90,000 unit in November Year 1, The sling price ts $2 per unt 1. Theinvencory af finshed goods on October 1 125 24,000 untt,The number afunts of aished goods inventory a the end af each month equals 20 percent of unit sales anticipated forte following, ‘month, There is no work in process. © Theinventory of raw materials on October 1 was 22,800 pounds, Atthe end of each month, the raw materials inventory equals no less than 40 percent of production requirements forthe following ‘month, The company purchases materials ae needed in minimum quantiles of 25,000 pounds per shipment. 44. Selling expenses are 10 percent of gross sales, Administrative expenses, which include depreciation of ‘$500 per month on office furniture and fitures, total $43,000 per month The manufacturing budget for vases, based on normal production of 100,000 unis per month follows: Metts 12 pound pr vane, 50009 pounds, $200 96 poutine 850.000 bor ‘.c00 Yana vere 20,000 ‘esd Overhad (elas depreciston of 00 10,000 To 33000 Requirements: 2 Prepare schedules computing inventory budgets by months for (1) Production ip unts for October, November, and December. (2) Raw matertal purchases in pounds fr October and November: b,Propare a projected income statement for November,2, Boards, Inc, a manufacturer of snow boards, decided in October Year 1 that it needed cash to continue ‘operations, It began negotiating for a one-month bank loan of $100,000 starting November 1 Year 1, The ‘bank would charge Interestat the rate of 1 percent per month and require the company to repay interest {and principal on November 30 Year 1,In considering the loan, the bank requested a projected income. statement and cash budget for November. ‘The folowing information Is available: 12 The company budgeted sales at 2,000 units per month in October Year 1, December Year 1,and January Year 2, and at 3,000 units in November Year 1. The selling price to distributors is $100 per b. The inventory of finished goods on October 1 was 24,000 units, The number of unts of finished goods inventory at the end of each month equals 20 percent of unit sales anticipated for the following month. There Iso work in process €. Thecompany purchases materials, ithas no raw materials Inventary 4. Selling expenses are 10 percent of gross sales, Administrative expenses, which include depreciation of '$500 per month on office furniture and fistures, total $33,000 per month, ©. The manufacturing budget for snow boards, based on normal production of 2,000 units per month, follows: atrial $80,000 tor 000, ‘Variable verbend 10000 Fixed Overhead lads depreciation of 3.00 7 60000 Tot $170.000 Requirement 2 How much s the expected production in units for October, November, and December? ’, Prepare a projected income statement for November, 3, Kj Company manufactures furniture and eatriages for infants, The accounting staffs currently preparing next year's budget, Kyle Lansing is new to the firm and is interested in learning how this process occurs, He has lunch with the sales manager and the production manager to discuss further the planning process, Over the course of lunch, Kyle discovers thatthe sales manager lowers sales projections 5to 10 percent before submitting her figures, while the production manager increases cost estimates by 10 percent before submitting his figures, When Kyle asks about why this is done, the response is simply that everyone around here does it Requirements: ‘a, What do the sales and production managers hope to accomplish by their methods? ’ How might this backfire and work against them? ‘Are the actions of the sales and production managers unethical?