Hurtt's Java Seeds is an independent roaster of specialty coffee beans

Subject:AccountingPrice: Bought3

Share With

Hurtt's Java Seeds is an independent roaster of specialty coffee beans. During March, the company plans to sell 11,000 pounds of beans at $13 per pound. Internet sales account for 55 percent of total sales and are paid for by customers when they place their orders. Of the remaining 45 percent, three-fifths are paid for in the month of sale and two-fifths in the month following the sale. In February, roasted coffee bean sales are expected to total $99,800. The company budgets 7 months ahead, so that in early January, it is time to plan for March. During March, the company plans to sell 11,000 pounds of beans. At the end of February, the company expects to have 3,000 pounds of raw green coffee beans (costing $4,900) and 850 pounds of roasted beans (costing $4,500) in inventory. Hurtt's would like to have 1,400 pounds of green coffee beans and 530 pounds of roasted beans in inventory at the end of March. Hurtt's purchases green coffee beans from the grower at $2 per pound and sells the roasted beans for $13 per pound. Hurtt's roasters hold 25 pounds of green coffee beans. It takes 17 minutes to roast the beans to perfection. Because the roaster must be monitored by an employee at all times, each batch requires 0.28 direct labor hours. During the roasting process, the green beans lose 20% of their weight, so that 1.25 pounds of green (raw) beans must be used to produce 1 pound of roasted beans. The standard direct labor rate is $13 per direct labor hour. Variable overhead is applied at the rate of $83 per direct labor hour, and fixed overhead is budgeted at $13,200 per month, including $1,600 in equipment depreciation. Hurtt's pays for 47 percent of its green coffee beans in the month of purchase and the remaining 53 percent in the month following the purchase. February's purchases of green coffee beans are expected to total $25,700. Variable selling and administrative expenses are 25 percent of sales, and fixed administrative expenses are $37,000 per month. Both are paid in the month incurred, as are direct labor costs and manufacturing overhead. In March, Hurtt's must make a $33,000 payment on its long-term loan, of which $5,600 is interest. At the end of February, Hurtt's cash balance is expected to be $14,600. The company must maintain a minimum cash balance of $12,000 as a condition of a long-term loan. Any cash required to maintain the minimum balance can be borrowed in $1,000 increments at a 18 percent annual interest rate. Interest is paid only when principal is repaid. However, it is accrued at the end of every month. Prepare Hurtt's cash receipts budget for March. (Round answers to 0 decimal places, e.g. 1250.) Cash sales-March $ Credit sales collections-March Credit sales collections-February Total cash collections $ e Textbook and Media List of Accounts Prepare Hurtt's cash payments for purchases budget for March.(Round answers to 0 decimal places, e.g. 125.) Payment on March purchases $ Payment on February purchases Total cash payments for purchases $ e Textbook and Media List of Accounts Prepare Hurtt's cash budget for March. (Round answer to 0 decimal places, e.g. 125 and enter amounts with negative sign.