Suppose in one economy, if people have no disposable income, they still spend 5 million dollars. For every dollar they earn, these people save 0.2 dollars and spend 0.8 dollars. The investment level is 2 million dollars, and government spending is 1 million dollars. The government takes 1 million dollar tax. There is no import or export. What is the output in the goods market equilibrium for this economy? Show your computation

Campbell, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and July.

Campbell had a beginning inventory balance of $4,400 on April 1 and a beginning balance in accounts payable of $14,900. The company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. Campbell makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase.  

Required

A. Prepare an inventory purchases budget for April, May, and June.

B. Determine the amount of ending inventory Campbell will report on the end-of-quarter pro forma balance sheet.

C. Prepare a schedule of cash payments for inventory for April, May, and June.

D. Determine the balance in accounts payable Campbell will report on the end-of-quarter pro forma balance sheet.

A. Prepare an inventory purchases budget for April, May, and June.

B. Ending Inventory:

C. Prepare a schedule of cash payments for inventory for April, May, and June. (Round your final answers to the nearest whole dollar.)

D. Accounts Payable

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow:

If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows:

Sales for the second quarter of 2017 are $32,000, cost of goods sold under the FIFO method is $10,200, and operating expenses are $4,600. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding.

Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2017. (Round "Earnings per share" answers to 2 decimal places.)

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow:

If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows:

Sales for the second quarter of 2017 are $34,000, cost of goods sold under the FIFO method is $10,400, and operating expenses are $4,800. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding.

Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2017. (Round "Earnings per share" answers to 2 decimal places.)

Happy Place Inc. is a company that manufactures and sells outdoor benches. For planning and control purposes they utilize a quarterly master budget, which is usually developed at least six months in advance of the budget year. Their fiscal year end is December 31.

During the spring of 2019, Linda Dempster, the Happy Place controller, spent some time putting together a sales forecast for the next budget year (January to December, 2020). In June, Linda’s numbers really came in as she won the jackpot in the lottery. Shortly thereafter, the President of Happy Place received Linda’s letter of resignation, which she sent from Bermuda.   

The President, desperately needing the budget completed, has approached you, a management accounting student, for help in preparing the budget for the coming fiscal year. Your conversations with the president and your investigations of the company’s records have revealed the following information:

1. Linda’s sales forecast consisted of these few lines:

         For the year ended December 31, 2019: 26,000 units at $310.00 each*

   For the year ended December 31, 2020: 30,000 units at $310.00 each

   For the year ended December 31, 2021: 32,000 units at $310.00 each

*Expected sales for the year ended December 31, 2019 are based on actual sales to date and budgeted sales for the duration of the year.

2. History has shown that sales are seasonal, with 58% of sales occurring in the second quarter, 32% in the third quarter, 4% in the first quarter, and the remaining 6% in the last quarter.

3. Because sales are seasonal, Happy Place must rent an additional storage facility from March to June to house the additional finished benches on hand. The only related cost is a flat $2,200 per month, payable at the beginning of the month.

4. Sales are on a cash and credit basis, with 88% collected during the quarter of the sale, and 12% the following quarter.

5. Happy Place has negotiated a line of credit with the bank such that they can borrow up to $675,000, in increments of $5,000, at an interest rate of 4%. Assume all borrowing takes place at the beginning of the quarter (interest is paid for the full quarter when borrowing takes place) and repayment takes place at the end of the quarter (interest is paid for the full quarter that repayment is made.)

6. From previous experience, management has determined that an ending finished goods inventory equal to 10% of the next quarter’s sales is required to meet customer demand. Opening finished goods inventory consists of 120 benches.

7. The primary raw material used is 4x6 cedar boards. Each bench averages 60

linear feet of wood (including a wastage allowance), which the company purchases for $1.50 per linear foot. Happy Place finds it necessary to maintain an inventory balance equal to 12% of the following quarter’s production needs of cedar as a precaution against stock-outs. Opening raw materials inventory consists of 20,304 linear feet of cedar. Happy Place pays for 85% of a quarter’s purchases in the quarter of purchase and 15% in the following quarter.

Each bench also requires a cast iron frame, which the company purchases pre-made from Cheatle Forge. The frames are readily available at a cost of $100, are purchased as needed and paid for at the time of purchase.

8. Beginning accounts payable will consist of $22,673 arising from the estimated direct material purchases for Q4, 2019 of $151,157.

9. While much of the wood cutting process is automated, the assembly process is labour intensive. Employees are paid an average of $25 per hour, including the employer’s portion of employee benefits. All payroll costs are paid in the period in which they are incurred.

Each bench spends a total of 90 minutes in production.

10. Due to the company’s concentration on a single product, manufacturing overhead is allocated based on volume (i.e. the units produced). The variable overhead manufacturing rate is $12.00 per unit, consisting of: Utilities--$2.75; Indirect Materials--$5.25; Plant maintenance--$2.00; and Other--$2.00

11. The fixed manufacturing overhead costs for the entire year are as follows:

Training and development                 $     9,000

Property and business taxes                   36,000

Supervisor’s salary                                120,000

Depreciation on equipment                    117,000

Insurance                                                 60,000

Other                                                        34,200

                                                            $ 376,200

• The property and business taxes are paid on June 30 of each year.

• The annual insurance premium is paid at the beginning of October each year.

• All other “cash-related” fixed manufacturing overhead costs are incurred evenly over the year and paid as incurred.

• Happy Place uses the straight-line method of depreciation.

12. Selling and administrative expenses are $22 per unit sold and $18,000 per month. These costs are paid in the quarter in which they occur.

13. During the fiscal year ended December 31, 2020, Happy Place will be required to make quarterly income tax installment payments of $35,000. Outstanding income taxes from the year ended December 31, 2019 must be paid in April 2020. Income tax expense is estimated to be 20% of net income. Income taxes for the year ended December 31, 2020, in excess of installment payments, will be paid in April, 2021.

14. Happy Place is planning to acquire additional manufacturing equipment for $152,000 cash. 40% of this amount is to be paid in January 2020, the rest, in February 2020. The manufacturing overhead costs in 11. already include the extra depreciation.

15. Happy Place Inc. has a policy of paying dividends at the end of each quarter. The president tells you that the board of directors is planning on continuing their policy of declaring dividends of $25,000 per quarter.

16. A listing of the estimated balances in the company’s ledger accounts as of December 31, 2019 is given below:

REQUIRED:

1. Prepare a Quarterly Manufacturing Overhead Budget for Happy Place for the year ended December 31, 2020

Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:

1. Budgeted monthly absorption costing income statements for April–July are:

*Includes $31,000 of depreciation each month.

2. Sales are 20% for cash and 80% on account.

3. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $275,000, and March’s sales totaled $290,000.

4. Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $130,900.

5. Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $99,400.

6. Dividends of $38,000 will be declared and paid in April.

7. Land costing $46,000 will be purchased for cash in May.

8. The cash balance at March 31 is $60,000; the company must maintain a cash balance of at least $40,000 at the end of each month.

9. 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 $200,000. 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:

1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.

2. Prepare the following for merchandise inventory:

a. A merchandise purchases budget for April, May, and June.

b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.

3. Prepare a cash budget for April, May, and June as well as in total for

Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: Budgeted monthly absorption costing income statements for April–July are: April May June July Sales $ 670,000 $ 840,000 $ 550,000 $ 450,000 Cost of goods sold 469,000 588,000 385,000 315,000 Gross margin 201,000 252,000 165,000 135,000 Selling and administrative expenses: Selling expense 85,000 104,000 66,000 45,000 Administrative expense* 47,500 64,000 40,400 43,000 Total selling and administrative expenses 132,500 168,000 106,400 88,000 Net operating income $ 68,500 $ 84,000 $ 58,600 $ 47,000 *Includes $27,000 of depreciation each month. Sales are 20% for cash and 80% on account. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $255,000, and March’s sales totaled $270,000. Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $122,500. Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $93,800. Dividends of $34,000 will be declared and paid in April. Land costing $42,000 will be purchased for cash in May. The cash balance at March 31 is $56,000; the company must maintain a cash balance of at least $40,000 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 $200,000. 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: b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

10. The type of non-price rationing that most closely approaches the market outcome is:

A) favored customer rationing.

B) first-come, first-served basis or queuing.

C) coupon rationing with coupons that can be resold.

D) coupon rationing with coupons that cannot be resold.

Consider the market for generic soda, a product that only has “soda” on its label. We know that demand for generic soda falls when income increases, demand rises when the price of other soda increases, and that demand rises when the price of potato chips falls.

11. Refer to Scenario 1. Graph “soda” and explain the effect on equilibrium price and quantity on an increase in income. What type of good is “soda”?

12. Refer to Scenario 1. Graph “soda” and explain the effect on equilibrium price and quantity of an increase in the price of premium soda (ex: Pepsi). How are the goods related?

13. Refer to Scenario 1. Graph and explain the effect on equilibrium price and quantity of “soda” due to an increase in the price of potato chips. How are the goods related?

The MendezCompany has prepared a sales budget of 42,000 finished units for a? 3-month period. The company has an inventory of 14,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 18,000 units at the end of the succeeding quarter. It takes 4 gallons of direct materials to make one unit of finished product. The company has an inventory of 60,000 gallons of direct materials at December 31 and has a target ending inventory of 51,000 gallons at the end of the succeeding quarter.

a. How many gallons of direct materials should Mendez Company purchase during the 3 months ending March? 31? Show your calculations for each section.

B) What questions might the CEO ask of the operating manager when reviewing the? budget? ?(Select three that? apply.)

A.Is the increased finished goods ending inventory because of anticipated production or quality? problems?

B. Can the target finished goods ending inventory be reduced so as to reduce? inventory-related costs?

C.Has the target finished goods ending inventory taken into account the level of employees required to produce the inventory needed to still be of good quality.

D.Is the sales budget for finished units for the? 3-month period an amount that can be increased through increased? production?

E. Can fewer than 44 gallons of direct materials be used to produce each unit of finished product by reducing waste and improving quality and? efficiency?

F. Can target ending direct materials inventory be increased to allow for a larger supply in the following? year?

1-D Kinematics

Experiment 1: Free Fall

In this experiment you will drop the hex nut from different heights. You will explore how height from which the hex nut is dropped affects its falling time and its final velocity.

Procedure

1. a) Write down a hypothesis how height will affect the falling time of an object. (Note: use form: if…… then……)

2. b) Write down a hypothesis how height will affect final velocity of the falling object. (Note: use form: if…… then……)

3. Drop the hex nut from different heights. For each drop, measure the distance from the ground and the time the hex nut is falling down. For each height do at least three measurements of falling time and then calculate the average time.  

Include your measurements in Table 1.

4. Calculate final velocity of falling hex nut using equation:

v = v₀ + at   

Since the initial velocity (the one you start with) in this experiment is always equal to 0 m/s, then the equation you use for calculation is simply:

v = at

Example:

If average t = 2.5 seconds then,

    v = a (2.5 s)   

Since an object is in free fall, acceleration a is equal to gravitational acceleration g = 9.8 m/s².

Therefore,

v = (9.8 m/s²)(2.5 s) = 24.5 m/s

5. Include your calculated values of the final velocity in Table 1.

Data:

Table 1

6. Plot time versus height graph using your data from Table 1 (Note: independent variable is on the x axis and depended variable is on y axis)

Independent Variable: _____________

Dependent Variable: ________________

[include your graph here]

7. Plot final velocity versus height graph using your data from Table 1.

Independent Variable: _____________

Dependent Variable: ________________

[include your graph here]