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“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00074. Assume that the cost of goods sold for Kaufmann Company for January was $130,000. What would be the cost of goods manufactured for the month? a. $125,000 b. $135,000 c. $130,000 d. $129,000”,”2Cost of Goods Manufactured for the month: Cost of Good Sold = Beg. Inventory Finished Goods 20,000+ Cost of Goods Manufactured ????? – Ending Inventory Finished Goods 25,000Costs of Goods Sold $130,00020,000 + ????? – 25,000 = 130,000-5,000 + ????? = 130,000????? = 135,000Cost of Goods Manufactured = 135
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Read more“Young Enterprises has budgeted sales in units for the next five months as follows: June 4,600 units July 7,200 units August 5,400 units September 6,800 units October 3,800 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month’s sales in units. The inventory on May 31 contained 400 units. The company needs to prepare a Production Budget for the second quarter of the year. 90. The total number of units to be produced in July is: a. 7,740 units. b. 7,200 units. c. 7,020 units. d. 7,280 units.”,”3Total units to be produced in July: July Sales 7,200 + Desired ending inventory (5,400 x 10%) 540 7,740- Beginning inventory = Desired ending inventory for June (7200 x 10%) 720 Units to be graded in July 7
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Read more“Carlson Manufacturing has some equipment that needs to be rebuilt or replaced. The following information has been gathered relative to this decision: Present Equipment New Equipment Purchase cost new $50,000 $48,000 Remaining book value $30,000 – Cost to rebuild now $25,000 – Major maintenance at the end of 3 years $ 8,000 $ 5,000 Annual cash operating costs $10,000 $ 8,000 Salvage value at the end of 5 years $ 3,000 $ 7,000 Salvage value now $ 9,000 – Carlson uses the total-cost approach and a discount rate of 12% in making capital budgeting decisions. Regardless of which option is chosen, rebuild or replace, at the end of five years Carlson Manufacturing plans to close its domestic manufacturing operations and to move these operations to foreign countries.106. If the new equipment is purchased, the present value of all cash flows that occur now is: a. $(48,000). b. $(39,000). c. $(41,000). d. $(37,000).”,”2If the new machine is purchased the present value of all the cash flows that occur now will equal the price of the new machine minus the selling price of the old machine.$48,000 – $9,000 = $ 39
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Read more“Nelson Company’s activity for the first six months of 19×4 is as follows: Machine Electrical Month Hours Cost January 4,000 $3,120 February 6,000 $4,460 March 4,800 $3,500 April 3,800 $3,040 May 3,600 $2,900 June 4,200 $3,200 75. Using the high-low method, the fixed portion of the electrical cost each month would be a. $1,520 b. $440 c. $260 d. $560”,”4. The fixed portion of the electrical cost each month: Cost at the high activity level – Cost at the low activity level = Variable Cost High activity level – Low activity level4,460 – 2,900 = .65/hr6,000 – 3,600Elect. Cost = FC + .65Q4,460 = FC + .65 x 6,000FC = 4,460 – 3
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Read more“The Yost Company makes and sells a single product, Product A. Each unit of Product A requires 1.2 hours of labor at a labor rate of 8.40 per hour. Yost Company needs to prepare a Direct Labor Budget for the second quarter of 19×6. 91. The budgeted direct labor cost per unit of Product A would be: a. $8.40. b. $7.00. c. $10.08 d. $9.60”
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Read more“This Year Last Year Units Sold 250,000 200,000 Sales Revenue $1,250,000 $1,000,000 Less: Cost of Goods Sold 875,000 700,000 Gross Margin $375,000 $300,000 Less: Operating Expenses 222,000 210,000 Net Income $153,000 $ 90,000 76. What are the company’s total fixed operating expenses per year? a. $60,000. b. $174,000. c. $150,000. d. $162,000.”,”4The company’s total fixe operating expense per year: Cost at the high activity level – Cost at the low activity level = Variable Cost High activity level – Low activity level1,472,000 – 1,210,000 = 5.24 / unit 250,000 – 200,000 Variable Costs x Units = Variable cost element5.24 x 200,000 = 1,048,000Fixed cost element = Total cost – Variable cost element = 1,210,000 – 1,048,000= $162
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Read more“The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $24 dollars and has a unit variable cost of $18. The company has budgeted the following data for November: I. Sales of $1,152,000, all in cash. II. A cash balance on November 1 of $48,000. III. Cash disbursements (other than interest) during November of $1,160,000. IV. A minimum cash balance on November 30 of $60,000. If necessary, the company will borrow cash from a bank. The borrowing will be in multiples of $1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of the month. The November interest will be paid in cash during November.92. The number of units of Product A budgeted to be sold during November is: a. 48,000 units b. 38,000 units c. 64,000 units. d. 48,500 units.”,”1Number of units budgeted to be sold in November: = Sales / Unit sales price= 1,152,000 / 24 = 48
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Read more“An income statement for Sam’s Bookstore for the first quarter of 19×2 is presented below: Sam’s Bookstore Income Statement For Quarter Ended March 31, 1992 Sales $900,000 Cost of Goods Sold 630,000 Gross Margin 270,000 Less Operating Expenses Selling $102,000 Administration 102,000 204,000 Net Income $ 66,000 ÍÍÍÍÍÍÍÍ On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. 77. The contribution margin for Sam’s Bookstore for the first quarter of 19×2 is: a. $180,000. b. $774,000. c. $144,000. d. $756,000.”,”377. The contribution margin for Sam’s bookstore for the first quarter of 19×2: Sales 900,000- Total VC: Cost of GS 630,000Selling 90,000 (90,000/50) = 18,000, 18,000 x 5Admin. 36,000Total Variable Costs 756,000 CM 144
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Read more“The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $24 dollars and has a unit variable cost of $18. The company has budgeted the following data for November: I. Sales of $1,152,000, all in cash. II. A cash balance on November 1 of $48,000. III. Cash disbursements (other than interest) during November of $1,160,000. IV. A minimum cash balance on November 30 of $60,000. If necessary, the company will borrow cash from a bank. The borrowing will be in multiples of $1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of the month. The November interest will be paid in cash during November.93. The amount of cash needed to be borrowed on November 1 to cover all cash disbursements and to obtain the desired November 30 cash balance is: a. $20,000. b. $21,000. c. $37,000. d. $38,000.”,”2. The amount of cash needed to be borrowed on November 1, :Cash balance 11/1 $48,000+ Sales 1,152,000Total 1,200,000- Cash disbursements 1,16,000Available cash at end of month $40,000Because the minimum balance required is $60000, Calquist Company needs to borrow $21
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