Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $50. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.

Suppose each handisaw takes approximately 0.35 hours to manufacture, and Wesley pays an average labor wage of $14.50 per hour.

Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $3.50 per handisaw.

Manufacturing overhead for this product includes $69,000 annual fixed overhead (based on production of 24,000 units) and $0.80 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $15,000 per month.

Required:
1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the budgeted income statement for the handisaw product for the first quarter.

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $60. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 35 percent of the next month’s sales.

Suppose each handisaw takes approximately 0.35 hours to manufacture, and Wesley pays an average labor wage of $15.50 per hour.

Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $3.50 per handisaw.

Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 27,000 units) and $1.00 per unit variable manufacturing overhead. Wesley’s selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $16,000 per month.

1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the budgeted income statement for the handisaw product for the first quarter

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $40. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.

Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour.

Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $3.50 per handisaw.

Manufacturing overhead for this product includes $63,000 annual fixed overhead (based on production of 24,000 units) and $0.80 per unit variable manufacturing overhead. Wesley’s selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $16,000 per month.

Required:
1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the budgeted income statement for the handisaw product for the first quarter.

Southwestern Fashions, Inc. which uses a job-order costing system, had two jobs in process at the start of the year: job no. 101 ($84,100) and job no. 102 ($53,300). The following information is available: a. The company applies manufacturing overhead on the basis of machine hours (based on practical capacity). Budgeted overhead and machine activity for the year were anticipated to be $824,000, and 16,000 hours, respectively. b. The company worked on four jobs during the first quarter. Direct materials used, direct labor incurred, and machine hours consumed were as follows: Job No. Direct Material Direct Labor Machine Hours 101 $21,000 $35,000 1,200 102 — 22,000 700 103 44,000 65,000 2,000 104 15,000 8,800 500 c. Manufacturing overhead during the first quarter included charges for depreciation ($32,800), indirect labor ($60,000), indirect materials used ($5,100), and other factory costs ($139,500). d. Southwestern Fashions completed job no. 101 and job no. 102. Job no. 102 was sold on account, producing a profit of $34,700 for the firm. 1. Prepare journal entries for the first quarter to record the following. (Note: Use summary entries where appropriate by combining individual job data.) (Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. The issuance of direct material to production and the direct labor incurred. b. The manufacturing overhead incurred during the quarter. c. The application of manufacturing overhead to production. d. The completion of jobs no. 101 and no. 102. e. The sale of job no. 102. 2. Determine the cost of the jobs still in production as of March 31. 3. Did the finished-goods inventory increase or decrease during the first quarter? By how much? 4. Was manufacturing overhead under- or overapplied for the first quarter of the year? By how much?

A loan is being repaid by the amortization method with an installment at the end of each 80 quarters at 6% annual effective interest, the first payment one quarter after the loan is made. In which payment are the principal and the interest most nearly equal to each other?

ANS: 33 Please show the steps.

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:

a) is producing at a point where output is less than potential GDP.

B) is producing at its potential GDP.

C) is producing at a point where output is more than potential GDP.

D) is producing at its equilibrium point.

Question 21 pts

A fiscal policy that increases government spending or cuts taxes is most appropriate when the economy is in:

a recessionary gap.

an inflationary gap.

a short-run equilibrium.

a long-run equilibrium.

Question 31 pts

Keynes argued that:

both the short run and the long run are equally important.

the distinction between the short run and the long run is irrelevant.

the short run is a more important policy concern than the long run.

the long run is a more important policy concern than the short run.

Question 41 pts

Which of the following is an example of an expansionary fiscal policy?

A decrease in government spending

An increase in the money supply

An increase in taxes

An increase in government spending

Question 51 pts

Which of the following would shift the aggregate demand curve to the left?

A decrease in exports

A higher future expected price level

A depreciation in the value of the country's currency

An increase in foreign income

Question 61 pts

Suppose a Keynesian economist recommends a combination of tax increases and spending cuts. This recommendation is most likely an attempt to address high _____.

unemployment

inflation

interest rates

deficits

Question 71 pts

Which of the following would shift the aggregate demand curve to the right?

drop in business confidence

A lower expected rate of return

rise in future expected income.

an increase in taxes

Question 81 pts

The expenditure multiplier exists because _____.

spending by one consumer can become the disposable income of another consumer

sticky prices increase the spending power of wage increases by a disproportionate amount

the money supply increases when investment goes up even without an increase in spending

tax increases have a disproportionate effect on consumer spending

Question 91 pts

If the price of U.S.-produced goods becomes relatively less expensive compared to foreign-produced goods, ____________ increase(s).

imports

foreign investment

exports

government spending

Question 101 pts

When equilibrium GDP is less than full-employment GDP, a Keynesian solution would be ________, such as increased government spending or reduced taxes.

contractionary monetary policy

expansionary monetary policy

contractionary fiscal policy

expansionary fiscal policy

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.

Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.

At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:

Required:

1. Complete the following:

a. Compute the unit product cost under absorption costing.

b. What is the company’s absorption costing net operating income (loss) for the quarter?

c. Reconcile the variable and absorption costing net operating income (loss) figures.

3. During the second quarter of operations, the company again produced 31,400 units but sold 34,400 units. (Assume no change in total fixed costs.)

a. What is the company’s variable costing net operating income (loss) for the second quarter?

b. What is the company’s absorption costing net operating income (loss) for the second quarter?

c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.

Please answer the following questions below.

1. Who needs to be involved in preparing forecasts?
2. How has technology had an impact on forecasting?
3. Ben has heard from some of his customers that they will probably cut back on order sizes in the
next quarter. The company he works for has been reducing its sales force due to falling demand and
he worries that he could be next if his sales begin to fall off. Believing that he may be able to convince his customers not to cut back on orders, he turns in an optimistic forecast of his next quarter sales to his manager. What are the pros and cons of doing that?

Question 3

A- ABC company has two divisions--Women and Men. The divisions have the following revenues and expenses:

The management of ABC is considering the elimination of the Men Division. If the Men Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision.

Required:

Should the Company drop Men division? Explain. Support you answer with the necessary calculations.                                                                                                                  (7.5 marks)

B- XYZ Company manufactures and sell wooden product. It wants to prepare cash budget for the second quarter of the year. The company’s sales budget for the second quarter given below:

  - Credit sales are collected as follows:

25% in the same month of sale, 65% in the month following sale, and 10% in the second month following sale

- February sales totaled $400,000, and March sales totaled $430,000.

Required:

1. Prepare the cash collection schedule for the second quarter.

2. What is the accounts receivable balance on June 30th?                                               (7.5 marks)

C- ABC Corporation has estimated the following information for first quarter of 2020 for one of its products:

The ending inventory at December 2019 was 28,000 units.

Required:

Prepare the Production Budget and the Sales Budget for the first quarter of 2020, assuming selling price per unit is $20.                                                                                                                              

D- The following information has been take from a manufacturing company for the year 2019:

Sales revenues 36,000 – opening inventory of materials 10,000 – closing inventory of materials 8,000 – opening inventory of finished goods 6,000 – closing inventory of finished goods 4,000 – cost of goods produced 26,000

Required: Calculate cost of goods sold and gross profit for the year ended December 31, 2019.                               

Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2017. 1. Sales: quarter 1, 29,400 bags; quarter 2, 44,000 bags. Selling price is $61 per bag. 2. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.8 per pound and 6 pounds of Tarr at $1.75 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,500 12,300 18,500 Gumm (pounds) 9,400 10,200 13,100 Tarr (pounds) 14,400 20,500 25,500 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. 5. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes. Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $299,000 in quarter 1 and $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget Quarter Six Months 1 2 Expected unit sales Unit selling price $ $ $ Total sales $ $ $ Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget Quarter Six Months 1 2 : : LINK TO TEXT LINK TO TEXT Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget—Gumm Quarter Six Months 1 2 : : $ $ $ $ $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter Six Months 1 2 $ $ $ $ $ Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months 1 2 $ $ $ $ $ $ LINK TO TEXT LINK TO TEXT Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to 0 decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement $ $