1. Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets

   The budget director of Royal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for February is summarized as follows:

   a. Estimated sales of King and Prince chairs for February by sales territory:

   Northern Domestic:
   King	610 units at $780 per unit
   Prince	750 units at $550 per unit
   Southern Domestic:
   King	340 units at $780 per unit
   Prince	440 units at $550 per unit
   International:
   King	360 units at $850 per unit
   Prince	290 units at $600 per unit

   b. Estimated inventories at February 1:

   Direct materials:
   Fabric	420 sq. yds.
   Wood	580 linear ft.
   Filler	250 cu. ft.
   Springs	660 units
   Finished products:
   King	90 units
   Prince	25 units

   c. Desired inventories at February 28:

   Direct materials:
   Fabric	390 sq. yds.
   Wood	650 linear ft.
   Filler	300 cu. ft.
   Springs	540 units
   Finished products:
   King	80 units
   Prince	35 units

   d. Direct materials used in production:

   In manufacture of King:
   Fabric	6.0 sq. yds. per unit of product
   Wood	38 linear ft. per unit of product
   Filler	4.2 cu. ft. per unit of product
   Springs	16 units per unit of product
   In manufacture of Prince:
   Fabric	4.0 sq. yds. per unit of product
   Wood	26 linear ft. per unit of product
   Filler	3.4 cu. ft. per unit of product
   Springs	12 units per unit of product

   e. Anticipated purchase price for direct materials:

   Fabric	$12.00	per sq. yd.
   Wood	7.00	per linear ft.
   Filler	$3.00	per cu. ft.
   Springs	4.50	per unit

   f. Direct labor requirements:

   King:
   Framing Department	1.2 hrs. at $12 per hr.
   Cutting Department	0.5 hr. at $14 per hr.
   Upholstery Department	0.8 hr. at $15 per hr.
   Prince:
   Framing Department	1.0 hr. at $12 per hr.
   Cutting Department	0.4 hr. at $14 per hr.
   Upholstery Department	0.6 hr. at $15 per hr.

   Required:

   1. Prepare a sales budget for February.

   Royal Furniture Company Sales Budget For the Month Ending February 28
   Product and Area		Unit Sales Volume	Unit Selling Price	Total Sales
   King:
   	Northern Domestic
   	Southern Domestic
   	International
   	Total
   Prince:
   	Northern Domestic
   	Southern Domestic
   	International
   	Total
   Total revenue from sales

   2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Royal Furniture Company Production Budget For the Month Ending February 28
   	Units
   	King	Prince

   3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28
   	Direct Materials
   		Fabric (sq. yds.)		Wood (linear ft.)		Filler (cu. ft.)		Springs (units)	Total
   Required units for production:
   King
   Prince
   Desired inventory, February 28
   Total
   Estimated inventory, February 1
   Total units to be purchased
   Unit price
   Total direct materials to be purchased

   4. Prepare a direct labor cost budget for February.

   Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28
   			Framing Department		Cutting Department		Upholstery Department	Total
   Hours required for production:
   	King
   	Prince
   	Total
   Hourly rate
   Total direct labor cost

Check My Work

Shelly's Boutiques and Crafts had revenue of $5,700,000 this year on sales of 575,000 units. Variable costs were 35% and fixed costs totaled $3,150,000. Although the first five years were relatively profitable, increases in competition have led to a negative trend in profitability that has led them to the point where they have to make some changes to stay afloat. The company is evaluating two options to stay afloat.

Option 1:Purchase machinery to automate their operations. This machinery costs $625,000, but will decrease variable costs by 9%.

Option 2:Outsource the production of one of their main components that requires a substantial amount of machinery and skilled labor. This will reduce fixed costs by $425,000, but increases variable costs from their current 35% of sales to 40% of sales.

c.) Calculate the operating leverage before applying any of the options: What is the contribution margin in Total? What is the operating income in total? What is the operating leverage factor?

Patrick Ntini holds 500 shares in Aloes Processing Co. The firm has 50 000 shares outstanding and R100 000 earnings available to common shareholders. Shares are currently selling at R25 per share. The firm decides to retain earnings and rather issue a 10% share dividend.

Based on the above, answer the following questions:

1.1 Determine the current EPS value. (3)

1.2 What proportion of the firm does Patrick currently hold? (3)

1.3 What proportion of the firm will Patrick hold after the share dividend? (4)

1.4 At what market price should the stock sell after the share dividend? (5) 1.5 Discuss how Patrick is affected by the share dividend (5)

Present below are a few of the best methods in designing and managing budgets for healthcare organizations.

* Using comparative benchmarks

* Setting accurate, high-performance department budgets

* Establishing a culture of accountability

* Managing expenses

* Monitoring variances and requiring corrective action plans

* Employing a balanced scorecard

(Assignment) Please choose five from the list above and discuss how these methods can improve the overall budgeting objectives and accomplish strategic financial goals.

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows:

Required:

Answer each question independently based on the original data:

1. What is the product's CM ratio?

2. Use the CM ratio to determine the break-even point in dollar sales.

3. If this year's sales increase by $42,000 and fixed expenses do not change, how much will net operating income increase?

4-a. What is the degree of operating leverage based on last year's sales?

4-b. Assume the president expects this year's sales to increase by 14%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?

5. The sales manager is convinced that a 14% reduction in the selling price, combined with a $63,000 increase in advertising, would increase this year's unit sales by 25%.

a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?

b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year?

6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.40 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the president increase this year's advertising expense and still earn the same $880,000 net operating income as last year?

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

1. The gross margin is 25% of sales.

2. Actual and budgeted sales data:

3. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.

4. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.

5. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.

6. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,800 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $819 per month (includes depreciation on new assets).

7. Equipment costing $3,000 will be purchased for cash in April.

8. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the preceding data:

1. Complete the schedule of expected cash collections.

2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.

3. Complete the cash budget.

4. Prepare an absorption costing income statement for the quarter ended June 30.

5. Prepare a balance sheet as of June 30.

Describe the differences between job order costing, process costing, and Activity Based Costing (ABC). What are the advantages and disadvantages of each system? Imagine a company that you might be a manager for. Describe that company and what their major product or service would be. Then, tell which cost system would be best suited to that firm and why.

Write a short essay about state and local taxes. Your answer should include the different types of state and local taxes, their definitions and their classification into either activity based tax or transaction based tax. Please state your answer in a good form which will includes introduction, structure and conclusion. 5 paragraphs
1 page

1. Deferred income tax liabilities are amounts owed to the government True or False

2. Deferred taxes appear on a company's balance sheet as a result of inter-period tax True or False

3. "Taxable amounts" include revenues and gains that are included in the tax return BEFORE they are recognized for accounting purposes. True or False

4. Existing sufficient taxable temporary differences, which will result in taxable income, is one piece of evidence to support a more likely than not criteria. True or False

5. Two taxable permanent differences are Political contribution and 2) Golf club dues True or False

References

eBook & Resources

Most people lease for three years. When you purchase a car, you normally finance it with 60 month (5 year) loan. Compare two lease cycles to one purchase for the same car. Assume the second three-year lease costs are the same as the first lease. The car list cost is $27,450. The drive off fees associated with the lease are $1,250. Monthly lease payments are calculated on the three-year depreciation at 4.5% interest. Three-year depreciation is $12,692. The person buying the car is able to negotiate a $3,300 reduction in price and they put $2,400 down payment. The interest rate is 3.75%. The monthly payments are calculated on the net cost of the car. (Net cost = list cost-price reduction-down payment.) The sale value of the car at the end of six years is $9,787. What are the out of pocket costs for the lease compared to purchase? Both the lease and purchase must pay for routine maintenance and can be excluded from the analysis. The purchaser will have to spend $1,000 for a set of tires during the six years. The leaser does not have to pay for tires. At the end of a lease the leaser does not own a car, and must lease another car or purchase a car. Remember that the drive off fees are applicable to each lease. Compare the total out of pocket costs. Be sure to include the value of the 6-year-old car.

Please show show formulas in excel.

You are in charge of the department that receives the product in to the building and stows it to the bin where it is accessible by the department. you have two options on how to receive and stow the product. In the first option, you receive the product at 250 units per labor hour and stow it at 100 units per labor hour. You must receive it and stow it for the unit to count for production. This process results in 1% of the units stowed being incorrect. You can find and fix these errors at a rate of 20 units for labor hour with what you believe is almost 100% accuracy. In the second option, you receive and stow the product in one step vs. two. The rate for this process is 80 units per labor hours for receive and stow. This process results in 1.5% of the units being stowed being incorrect. You can find and fix these errors at a rate of 20 units per hour with what you believe is almost 100% accuracy. 1. Which option would you select to process today's units and why? 2. Does your answer change if you are told you must fully process 100,000 units today? If yes, why? 3. Does your answer change if you are told that you have 15 associates today and you must fully produce the maximum amount of units possible? If yes, why?

On December 31, 2017, Berclair Inc. had 400 million shares of common stock and 14 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 6% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $700 million. Also outstanding at December 31 were 63 million incentive stock options granted to key executives on September 13, 2013. The options were exercisable as of September 13, 2017, for 63 million common shares at an exercise price of $60 per share. During 2018, the market price of the common shares averaged $70 per share. The options were exercised on September 1, 2018. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Briefly explain the reasons why the unit price of an unlisted managed fund is likely to change on a regular basis. In addressing this question reference should be made to the various asset classes, their returns over time, how their returns impact unit price of the fund and also how cash distributions from the fund affect value and unit price of the fund.