Question

17. Kelley Business Machines provided the following manufacturing costs for the month of March.

Direct labor cost	$140,000
Direct materials cost	85,000
Equipment depreciation (straight-line)	25,000
Factory insurance	20,000
Factory manager's salary	13,300
Janitor's salary	5,500
Packaging costs	18,800
Property taxes	16,100

From the above information, calculate Kelley's total variable costs. Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.

a	$225,000
b	$323,700
c	$230,500
d	$243,800

22.

The relevant range of Zhang Company is between 110,000 units and 190,000 units per month. If the company produces beyond 190,000 units per month ________.

a	the fixed costs may change, but the variable cost per unit will remain the same
b	both the fixed costs and the variable cost per unit may change
c	the fixed costs and the variable cost per unit will not change
d	the fixed costs will remain the same, but the variable cost per unit may change

24. Hoppy Cat Toy Company has estimated the following amounts for its next fiscal year:

Total fixed expenses	$833,500
Sale price per unit	40
Variable expenses per unit	25

If the company spends an additional $34,000 on advertising, sales volume would increase by 2,900 units. What effect will this decision have on the operating income?

a	Operating income will increase by $116,000.
b	Operating income will decrease by $72,500.
c	Operating income will increase by $9,500.
d	Operating income will increase by $43,500.

25.

Uniq Works purchased raw materials amounting to $122,000 on account and $20,000 for cash. The materials will be used to manufacture upholstery for furniture manufacturers on a contract basis. Which of the following journal entries correctly records this transaction?

a	Finished Goods Inventory 142,000 Accounts Payable 142,000
b	Accounts Payable 122,000 Cash 20,000 Raw Materials Inventory 142,000
c	Work-in-Process Inventory 142,000 Accounts Payable 142,000
d	Raw Materials Inventory 142,000 Cash 20,000 Accounts Payable 122,000

Lindsey Chocolate, Inc. has prepared its third quarter budget and provided the following data:

	Jul	Aug	Sep
Cash collections	$51,000	$39,600	$46,900
Cash payments:
Purchases of direct materials	31,000	21,100	17,800
Operating expenses	12,000	8,500	11,500
Capital expenditures	13,400	24,500	0

29. The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. Calculate the ending projected cash balance before financing for August.

a	$(5,933)
b	$48,200
c	$5,000
d	$9,067

Answer 1