In: Accounting
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Question 3
Big Three Company produces televisions. Budgeted sales for February are 1,090 units. Finished goods inventory on February 1 is budgeted to be 310 units, and Finished goods inventory on February 28 is budgeted to be 135 units.
What is the budgeted production for February?
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Question 4
Pope Company produces a model fan, which currently has a net loss. Below are its sales and costs
Sales revenue |
$135,130 |
|
Less: Variable costs |
41,851 |
|
Contribution margin |
$? |
|
Less: Direct fixed costs |
46,097 |
|
Segment margin |
$? |
|
Less: Common fixed costs |
57,441 |
|
Net operating income (loss) |
$? |
Eliminating the model fan product line would eliminate all of
direct fixed costs. All of the common fixed costs would be
redistributed to Pope’s remaining product lines.
By how much will Pope’s net operating income increase or decrease
if the fan is eliminated?
If net income decreases, indicate with a – .
Example, if net income decreases $1,000. Indicate –1,000.
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Question 5
It costs Mills, Inc. $11 per unit to manufacture 1,980 units per month of a product that it can sell for $37 each. Alternatively, Mills could process the units further into a more complex product, which would cost an additional $30 per unit. Mills could sell the more complex product for $58 each.
What is the incremental revenue if Mills decides to process further?
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Question 6
Garfield Corp. expects to sell 1,520 units of its pet beds in
March and 2,170 units in April. Each unit sells for $76. Garfield’s
ending inventory policy is 40 percent of the following month’s
sales. Garfield pays its supplier $27 per unit.
What is Garfield's budgeted purchases for March?
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Question 7
Preston, Inc., manufactures wooden shelving units for collecting
and sorting mail. The company expects to produce 420 units in July
and 640 units in August. Each unit requires 9 feet of wood at a
cost of $1.6 per foot. Preston wants to always have 10% of the next
month’s required feet of wood on hand in materials inventory.
What is Preston’s raw materials purchases budget for July?
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Question 8
Avery Company has compiled the following data for the upcoming
year:
Sales are expected to be 6,700 units at $32 each.
What is Avery's budgeted cost of goods sold?
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Question 9
Randall has received a special order for 2,370 units of its product at a special price of $20. The product normally sells for $27 and has the following manufacturing costs:
Per unit |
|||
Direct materials |
$ |
3 |
|
Direct labor |
5 |
||
Variable manufacturing overhead |
2 |
||
Fixed manufacturing overhead |
1 |
Assume that Randall has sufficient capacity to fill the order. If Randall accepts the order, what effect will the order have on the company’s short-term profit?
If a decrease, place a – sign before your answer.
For example, a decrease of $1,000 would be answered –1,000.
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Question 10
Quiet Corp. currently makes 2,500 subcomponents a year in one of its factories. The unit costs to produce are:
Description |
Per unit |
Direct materials |
$4 |
Direct labor |
5 |
Variable manufacturing overhead |
2 |
Fixed manufacturing overhead |
3 |
An outside supplier has offered to provide Quiet Corp. with the 2,500 subcomponents at a $19 per unit price. Fixed overhead is not avoidable.
If Quiet Corp. decides to buy from the outside supplier, the impact to net income will be?
If positive, enter the number, if negative, place a – sign before your number.
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