Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following information. 1. Klandon’s sales manager reported that the company sold 12,000 bags of rocks in March. He has developed the following sales forecast. The expected sales price is $10 per bag. April ......... .20,000 bags May ......... 50,000 bags June......... 30,000 bags July ......... 25,000 bags August ......... 15,000 bags 2. Sales personnel receive a 5 percent commission on every bag of rocks sold. The following monthly fixed selling and administrative expenses are planned for the quarter. However, these amounts do not include the depreciation increase resulting from the budgeted equipment purchase in June. Monthly Fixed Selling and Administrative Costs $10,000 25,000 1,000 10,000 Variable Cost/Unit Depreciation Salaries of sales personnel Advertising Management salaries Miscellaneous Bad debts $.50 500 .50 $1.00 Total costs $46,500 3. After experiencing difficulty in supplying customers in a timely fashion due to inventory shortages, the company established a policy requiring the ending Finished Goods Inventory to equal 20 percent of the following month's budgeted sales, in units. On March 31, 4,000 bags were on hand. 4. Five pounds of raw materials are required to fi ll each bag of finished rocks. The company wants to have raw materials on hand at the end of each month equal to 10 percent of the following month's production needs. On March 31, 13,000 pounds of materials were on hand. 5. The raw materials used in production cost $0.40 per pound. Half of the month's purchases is paid for in the month of purchase; the other half, in the following month. No discount is available. 6. The standard labor allowed for one bag of rocks is 15 minutes. The current direct labor rate is $10 per hour. 7. On June 1, the company plans to spend $48,000 to upgrade its office equipment that is fully depreciated. The new equipment is expected to have a five-year life, with no residual value. 8. The budgeted monthly variable and fixed overhead amounts are as follows. Variable overhead is based on the number of units produced. The fixed overhead budget is based on an annual production of 400,000 bags. 281-B-M-A-B-P-C%20(1282)-2.png 9. All sales are made on account. Historically, the company has collected 70 percent of its sales in the month of sale and 25 percent in the month following the sale. The remaining 5 percent of sales is uncollectible. 10. Klandon must maintain a minimum cash balance of $30,000. An open line of credit at a local bank allows the company to borrow up to $175,000 per quarter in $1,000 increments. 11. All borrowing is done at the beginning of the month, and all repayments are made at the end of a month in $1,000 increments. Accrued interest is paid only when principal is repaid. The interest rate is 12 percent per year. 12. A quarterly dividend of $49,000 will be declared and paid in April. 13. Income taxes payable for the first quarter will be paid on April 15. Klandon’s tax rate is 30 percent. 14. The March 31 balance sheet is as follows: March 31 Cash ................. $ 40,000 Accounts receivable.......... 30,000 Finished goods inventory ........ 26,000 Raw materials inventory ........ 5,200 Plant & equipment .......... 200,000 Accumulated depreciation ....... (50,000) Total assets ............. $ 251,200 Accounts payable........... $ 12,000 Income taxes payable ......... 50,000 Common stock............ 52,000 Retained earnings ........... 137,200 Total liabilities and equities ....... $ 251,200 Required a. Prepare all components of Klandon’s master budget for the second quarter. b. Prepare a pro-forma income statement for the second quarter. c. Prepare a pro-forma balance sheet as of June30

Comprehensive master budget in a manufacturing setting

(LO 3, 4, 5) Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following information.1.Klandon's sales manager reported that the company sold 12,000 bags of rocks in March. He has developed the following sales forecast. The expected sales price is $10 per bag.

2.Sales personnel receive a 5% commission on every bag of rocks sold. The following monthly fixed selling and administrative expenses are planned for the quarter. However, these amounts do not include the depreciation increase resulting from the budgeted equipment purchase in June (see part 7).

3.After experiencing difficulty in supplying customers in a timely fashion due to inventory shortages, the company established a policy requiring the ending Finished Goods Inventory to equal 20% of the following month's budgeted sales, in units. On March 31, 4,000 bags were on hand.

4.Five pounds of raw materials are required to fill each bag of finished rocks. The company wants to have raw materials on hand at the end of each month equal to 10% of the following month's production needs. On March 31, 13,000 pounds of materials were on hand.

5.The raw materials used in production cost $0.40 per pound. Half of the month's purchases is paid for in the month of purchase; the other half, in the following month. No discount is available.

6.The standard labor allowed for one bag of rocks is 15 minutes. The current direct labor rate is $10 per hour.

7.On June 1, the company plans to spend $48,000 to upgrade its office equipment that is fully depreciated. The new equipment is expected to have a five-year life, with no residual value.

8.The budgeted monthly variable and fixed overhead amounts are as follows. Variable overhead is based on the number of units produced. The fixed overhead budget is based on an annual production of 400,000 bags.

9.All sales are made on account. Historically, the company has collected 70% of its sales in the month of sale and 25% in the month following the sale. The remaining 5% of sales is uncollectible.

10.Klandon must maintain a minimum cash balance of $30,000. An open line of credit at a local bank allows the company to borrow up to $175,000 per quarter in $1,000 increments.

11.All borrowing is done at the beginning of the month, and all repayments are made at the end of a month in $1,000 increments. Accrued interest is paid any time a principal payment is made. The interest rate is 12% per year.

12.A quarterly dividend of $49,000 will be declared and paid in April.

13.Income taxes payable for the first quarter will be paid on April 15. Klandon's tax rate is 30%.

14.The March 31 balance sheet is as follows:

Required

a.

Prepare all components of Klandon's master budget for the second quarter.

b.

Prepare a pro-forma income statement for the second quarter.

c.

Prepare a pro-forma balance sheet as of June 30.

Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5]

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 15,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $6,200.

Each unit requires 5 grams of raw material that costs $1.80 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 5,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.40 direct labor-hours and direct laborers are paid $13.50 per hour.

Required:

1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole.

3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.

4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5]

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 50,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $8,800.

Each unit requires 8 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $11.50 per hour.

Required:

1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole.

3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.

4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5]

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 12,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $5,400.

Each unit requires 6 grams of raw material that costs $1.80 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 5,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.40 direct labor-hours and direct laborers are paid $14.50 per hour.

Required:

1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole.

3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.

4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5]

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 15,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $6,200.

Each unit requires 5 grams of raw material that costs $1.80 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 5,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.40 direct labor-hours and direct laborers are paid $13.50 per hour.

Required:

1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole.

3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.

4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

Mandalorian iron, also known by its Mando'a name of beskar, was an extremely durable iron ore whose only known source was the Outer Rim world of Mandalore and its moon, Concordia. There is a supernova explosion that happen around the Outer Rim world, so that it has a big negative shock on the production of Mandalorian iron. What will be happening with the market of Mandalorian iron as the result of the supernova explosion?

a. Equilibrium quantity decreases, equilibrium price increases

b. Equilibrium quantity decreases, equilibrium price decreases,

c. Equilibrium quantity increases, equilibrium price decreases

d. Equilibrium quantity decreases, but the effect on equilibrium quantity is uncertain.

"Durable press" cotton fabrics are treated to improve their recovery from wrinkles after washing. Unfortunately, the treatment also reduces the strength of the fabric. The breaking strength of untreated fabric is normally distributed with mean 51.1 pounds and standard deviation 2.7 pounds. The same type of fabric after treatment has normally distributed breaking strength with mean 24.4 pounds and standard deviation 1.7 pounds. A clothing manufacturer tests 4 specimens of each fabric. All 8 strength measurements are independent. (Round your answers to four decimal places.) (a) What is the probability that the mean breaking strength of the 4 untreated specimens exceeds 50 pounds? (b) What is the probability that the mean breaking strength of the 4 untreated specimens is at least 25 pounds greater than the mean strength of the 4 treated specimens?

"Durable press" cotton fabrics are treated to improve their recovery from wrinkles after washing. Unfortunately, the treatment also reduces the strength of the fabric. The breaking strength of untreated fabric is normally distributed with mean 52 pounds and standard deviation 2.6 pounds. The same type of fabric after treatment has normally distributed breaking strength with mean 28.4 pounds and standard deviation 2 pounds. A clothing manufacturer tests 3 specimens of each fabric. All 6 strength measurements are independent. (Round your answers to four decimal places.)

a) What is the probability that the mean breaking strength of the 5 untreated specimens exceeds 50 pounds?

b) What is the probability that the mean breaking strength of the 5 untreated specimens is at least 25 pounds greater than the mean strength of the 5 treated specimens?

Mandalorian iron, also known by its Mando'a name of beskar, was an extremely durable iron ore whose only known source was the Outer Rim world of Mandalore and its moon, Concordia.

The battle at The Sarlacc Pit in The Return of the Jedi offers us a rare opportunity to study the composition of the rare and coveted mandalorian armor worn by Boba Fett. In this battle Boba Fett fell into the gaping maw of The Sarlacc, where he would be slowly digested over the course a thousand years. If the molarity of the HCl in The Sarlacc stomach is 0.15M, upon which, over the course of a thousand years, four tons (4000 Liters) is produced, we can then titrate the stomach acid after a thousand years and treat the iron content of the mandalorian armor as an antacid tablet containing a diprotic base, since:

Fe + 2 HCl_(aq) -> Fe²⁺_(aq) + 2 Cl^-_(aq) + H_2(g)

If after 1000 years, it took 21.85 mL of 0.1337 M NaOH to neutralize a 25.00 mL sample of The Sarlacc’s stomach acid, what was the mass % of Iron in Boba Fett’s mandalorian armor.

The last known Imperial medical record reports Boba Fett’s mass as 78.12 kg. The last known sensor scan from Boba Fett’s ship, Slave I, reports 93.36 kg for Boba Fett with his armor on.

You may assume The Sarlaac eats only once a millenia since Jabba the Hutt’s death.

(Please assume that while Boba Fett escaped the Sarlacc Pit, his armor did not.)