TBA, Inc., manufactures and sells concrete block for residential and commercial building. TBA expects to sell the following in 20x1:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Units 2,000,0000 6,000,000 6,000,000 2,000,000
Unit Selling Price $0.70 $0.70 $0.80 $0.80
Quarter Units Sales Ending Inventory
1 2,000,000 500,000
2 6,000,000 500,000
3 6,000,000 100,000
4 2,000,000 100,000
Inventory on both January 1, 20x1, and January 1, 20x2, is expected to be 100,000 blocks.
Each block requires 26 pounds of raw materials (a mixture of cement, sand, gravel, shale, pumice, and water). TBA's raw materials inventory policy is to have 5 million pounds in ending inventory for the third and fourth quarters and 8 million pounds in ending inventory for the first and second quarters. Thus, desired direct materials inventory on both January 1, 20x1, and January 1, 20x2, is 5,000,000 pounds of materials. Each pound of raw materials costs $0.01.
Each block requires 0.015 direct labor hour; direct labor is paid $14 per direct labor hour.
Variable overhead is $8 per direct labor hour. Fixed overhead is budgeted at $320,000 per quarter ($100,000 for supervision, $200,000 for depreciation, and $20,000 for rent).
TBA also provided the information that beginning finished goods inventory is $55,000; and the ending finished goods inventory budget for ABT for the year $67,000.
TBA's only variable marketing expense is a $0.05 commission per unit (block) sold. Fixed marketing expenses for each quarter include the following:
Salaries: $20,000
Depreciation: 5,000
Travel: 3,000
Advertising expense is $10,000 in Quarters 1, 3, and 4. However, at the beginning of the summer building season, TBA increases advertising; in Quarter 2, advertising expense is $15,000.
TBA has no variable administrative expenses. Fixed administrative expenses for each quarter include the following:
Salaries $35,000
Insurance 4,000
Depreciation 12,000
Travel 2,000
Income taxes are paid at the rate of 30 percent of operating income.
Of the sales on account, 70 percent are collected in the quarter of sale; the remaining 30 percent are collected in the quarter following the sale. Total sales for the fourth quarter of 20x0 totaled $2,000,000.
All materials are purchased on account; 80 percent of purchases are paid for in the quarter of purchase. The remaining 20 percent are paid in the following quarter. The purchases for the fourth quarter of 20x0 were $500,000.
TBA requires a $100,000 minimum cash balance for the end of each quarter. On December 31, 20x0, the cash balance was $120,000.
Money can be borrowed and repaid in multiples of $100,000. Interest is 12 percent per year. Interest payments are made only for the amount of the principal being repaid. All borrowing takes place at the beginning of a quarter, and all repayment takes place at the end of a quarter.
Budgeted depreciation is $200,000 per quarter for overhead, $5,000 for marketing expense, and $12,000 for administrative expense. (Remember that depreciation is not a cash expense and must be deleted from total expenses before the cash budget is prepared.)
The capital budget for 20x1 revealed plans to purchase additional equipment for $600,000 in the first quarter. The acquisition will be financed with operating cash, supplementing it with short-term loans as necessary.
Corporate income taxes of $20,700 will be paid at the end of the fourth quarter.
The balance sheet for the beginning of the year is given:
Balance Sheet
December 31, 20x0
Assets
Current assets:
Cash..................................................................... $ 120,000
Account receivable............................................... 300,000
Material inventory................................................. 50,000
Finished goods inventory..................................... 55,000
Total goods inventory....................................................................... $525,000
Property, plant, and equipment (PP&E):
Land..................................................................... $ 2,500,000
Buildings and equipment...................................... 9,000,000
Accumulated depreciation.................................... (4,500,000)
Total PP&E:.................................................................................... 7,000,000
Total Assets.............................................................................................. $ 7,525,000
Liabilities and Stockholders' Equity
Current Liabilities:
Account payable........................................................................................ $ 100,000
Stockholders' equity:
Common Stock, no par....................................... $ 600,000
Retained earnings.............................................. 6,825,000
Total stockholders' equity.............................................................. 7,425,000
Total liabilities and stockholders' equity ................................................... $ 7,525,000
REQUIREMENTS (to be completed using Excel)
Total assets
1. Construct a sales budget for the coming year. Show total sales by quarter and in total for the year
2. Construct a production budget for the coming year. Show total units produced by quarter and in total for the year.
3. Construct a direct materials purchases budget for the raw materials for the coming year. Show total amounts by quarter and in total for the year.
4. Construct a direct labor budget for the coming year. Show total amounts by quarter and in total for the year.
In: Accounting
TBA, Inc., manufactures and sells concrete block for residential and commercial building. TBA expects to sell the following in 20x1:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Units 2,000,0000 6,000,000 6,000,000 2,000,000
Unit Selling Price $0.70 $0.70 $0.80 $0.80
Quarter Units Sales Ending Inventory
1 2,000,000 500,000
2 6,000,000 500,000
3 6,000,000 100,000
4 2,000,000 100,000
Inventory on both January 1, 20x1, and January 1, 20x2, is expected to be 100,000 blocks.
Each block requires 26 pounds of raw materials (a mixture of cement, sand, gravel, shale, pumice, and water). TBA's raw materials inventory policy is to have 5 million pounds in ending inventory for the third and fourth quarters and 8 million pounds in ending inventory for the first and second quarters. Thus, desired direct materials inventory on both January 1, 20x1, and January 1, 20x2, is 5,000,000 pounds of materials. Each pound of raw materials costs $0.01.
Each block requires 0.015 direct labor hour; direct labor is paid $14 per direct labor hour.
Variable overhead is $8 per direct labor hour. Fixed overhead is budgeted at $320,000 per quarter ($100,000 for supervision, $200,000 for depreciation, and $20,000 for rent).
TBA also provided the information that beginning finished goods inventory is $55,000; and the ending finished goods inventory budget for ABT for the year $67,000.
TBA's only variable marketing expense is a $0.05 commission per unit (block) sold. Fixed marketing expenses for each quarter include the following:
Salaries: $20,000
Depreciation: 5,000
Travel: 3,000
Advertising expense is $10,000 in Quarters 1, 3, and 4. However, at the beginning of the summer building season, TBA increases advertising; in Quarter 2, advertising expense is $15,000.
TBA has no variable administrative expenses. Fixed administrative expenses for each quarter include the following:
Salaries $35,000
Insurance 4,000
Depreciation 12,000
Travel 2,000
Income taxes are paid at the rate of 30 percent of operating income.
Of the sales on account, 70 percent are collected in the quarter of sale; the remaining 30 percent are collected in the quarter following the sale. Total sales for the fourth quarter of 20x0 totaled $2,000,000.
All materials are purchased on account; 80 percent of purchases are paid for in the quarter of purchase. The remaining 20 percent are paid in the following quarter. The purchases for the fourth quarter of 20x0 were $500,000.
TBA requires a $100,000 minimum cash balance for the end of each quarter. On December 31, 20x0, the cash balance was $120,000.
Money can be borrowed and repaid in multiples of $100,000. Interest is 12 percent per year. Interest payments are made only for the amount of the principal being repaid. All borrowing takes place at the beginning of a quarter, and all repayment takes place at the end of a quarter.
Budgeted depreciation is $200,000 per quarter for overhead, $5,000 for marketing expense, and $12,000 for administrative expense. (Remember that depreciation is not a cash expense and must be deleted from total expenses before the cash budget is prepared.)
The capital budget for 20x1 revealed plans to purchase additional equipment for $600,000 in the first quarter. The acquisition will be financed with operating cash, supplementing it with short-term loans as necessary.
Corporate income taxes of $20,700 will be paid at the end of the fourth quarter.
The balance sheet for the beginning of the year is given:
Balance Sheet
December 31, 20x0
Assets
Current assets:
Cash..................................................................... $ 120,000
Account receivable............................................... 300,000
Material inventory................................................. 50,000
Finished goods inventory..................................... 55,000
Total goods inventory....................................................................... $525,000
Property, plant, and equipment (PP&E):
Land..................................................................... $ 2,500,000
Buildings and equipment...................................... 9,000,000
Accumulated depreciation.................................... (4,500,000)
Total PP&E:.................................................................................... 7,000,000
Total Assets.............................................................................................. $ 7,525,000
Liabilities and Stockholders' Equity
Current Liabilities:
Account payable........................................................................................ $ 100,000
Stockholders' equity:
Common Stock, no par....................................... $ 600,000
Retained earnings.............................................. 6,825,000
Total stockholders' equity.............................................................. 7,425,000
Total liabilities and stockholders' equity ................................................... $ 7,525,000
REQUIREMENTS (to be completed using Excel)
Total assets
1. Construct a sales budget for the coming year. Show total sales by quarter and in total for the year
2. Construct a production budget for the coming year. Show total units produced by quarter and in total for the year.
3. Construct a direct materials purchases budget for the raw materials for the coming year. Show total amounts by quarter and in total for the year.
4. Construct a direct labor budget for the coming year. Show total amounts by quarter and in total for the year.
5. Construct an overhead budget for the coming year. Show total amounts by quarter and in total for the year.
6. Prepare a cost of goods sold budget for the coming year.
7. Construct a marketing expense budget for the coming year. Show total amounts by quarter and in total for the year
8. Construct an administrative expense budget for the coming year. Show total amounts by quarter and in total for the year.
9. Construct a budgeted income statement for the coming year.
10. Construct a cash receipts budget for each quarter of the coming year.
11. Construct a cash payments budget each quarter of the coming year.
12. Prepare a cash budget for each quarter of the coming year.
13. Prepare the Budgeted Balance Sheet for the coming year
In: Accounting
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.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,300 units) | $ | 1,132,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 466,950 | ||||
| Variable selling and administrative | 196,685 | 663,635 | ||||
| Contribution margin | 468,365 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 319,680 | |||||
| Fixed selling and administrative | 172,685 | 492,365 | ||||
| Net operating loss | $ | ( 24,000) | ||||
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:
| Units produced | 33,300 | |||
| Units sold | 28,300 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.50 | ||
| Direct labor | $ | 7.20 | ||
| Variable manufacturing overhead | $ | 1.80 | ||
| Variable selling and administrative | $ | 6.95 | ||
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 33,300 units but sold 38,300 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.
During the second quarter of operations, the company again produced 33,300 units but sold 38,300 units. (Assume no change in total fixed costs.) What is the company’s variable costing net operating income (loss) for the second quarter?
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During the second quarter of operations, the company again produced 33,300 units but sold 38,300 units. (Assume no change in total fixed costs.) What is the company’s absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places.)
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During the second quarter of operations, the company again produced 33,300 units but sold 38,300 units. (Assume no change in total fixed costs.) Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter. (Losses and deductions should be entered as a negative.)
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In: Accounting
In a closed economy with no foreign trade, spending on consumer goods (C) is related to national income (Y) according to the table below : -
|
National Income (Y) (£ billion) |
120 |
160 |
200 |
240 |
280 |
|
Consumption (C) (£ billion) |
80 |
110 |
140 |
170 |
200 |
|
Injections (J) (£ billion) |
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|
Aggregate Demand (AD) (£ billion) |
Assuming that the government is spending £30 billion per year on the infrastructure and firms are investing £30 billion
(a) What is the equilibrium level of national income (Y)?
(b) Calculate the marginal propensity to consume domestic goods and services.
(c) Calculate the value of the multiplier in this case.
(d) Using a diagram to help your answer, explain what would happen if government spending rose by £20 billion.
In: Economics
Understanding Relationships, Master Budget, Comprehensive Review
Optima Company is a high-technology organization that produces a mass-storage system. The design of Optima's system is unique and represents a breakthrough in the industry. The units Optima produces combine positive features of both compact and hard disks. The company is completing its fifth year of operations and is preparing to build its master budget for the coming year (20X1). The budget will detail each quarter's activity and the activity for the year in total. The master budget will be based on the following information:
Fourth-quarter sales for 20X0 are 55,000 units.
Unit sales by quarter (for 20X1) are projected as follows:
| First quarter | 65,000 | ||
| Second quarter | 70,000 | ||
| Third quarter | 75,000 | ||
| Fourth quarter | 90,000 |
The selling price is $400 per unit. All sales are credit sales. Optima collects 85% of all sales within the quarter in which they are realized; the other 15% is collected in the following quarter. There are no bad debts.There is no beginning inventory of finished goods. Optima is planning the following ending finished goods inventories for each quarter:
| First quarter | 13,000 units | ||
| Second quarter | 15,000 units | ||
| Third quarter | 20,000 units | ||
| Fourth quarter | 10,000 units |
Each mass-storage unit uses 5 hours of direct labor and three units of direct materials. Laborers are paid $10 per hour, and one unit of direct materials costs $80.
There are 65,700 units of direct materials in beginning inventory as of January 1, 20X1. At the end of each quarter, Optima plans to have 30% of the direct materials needed for next quarter's unit sales. Optima will end the year with the same amount of direct materials found in this year's beginning inventory.
Optima buys direct materials on account. Half of the purchases are paid for in the quarter of acquisition, and the remaining half are paid for in the following quarter. Wages and salaries are paid on the 15th and 30th of each month.
Fixed overhead totals $1 million each quarter. Of this total, $350,000 represents depreciation. All other fixed expenses are paid for in cash in the quarter incurred. The fixed overhead rate is computed by dividing the year's total fixed overhead by the year's budgeted production in units.
Variable overhead is budgeted at $6 per direct labor hour. All variable overhead expenses are paid for in the quarter incurred.
Fixed selling and administrative expenses total $250,000 per quarter, including $50,000 depreciation.
Variable selling and administrative expenses are budgeted at $10 per unit sold. All selling and administrative expenses are paid for in the quarter incurred.
The balance sheet as of December 31, 20X0, is as follows:
| Assets | ||||
| Cash | $ 250,000 | |||
| Direct materials inventory | 5,256,000 | |||
| Accounts receivable | 3,300,000 | |||
| Plant and equipment, net | 33,500,000 | |||
| Total assets | $42,306,000 | |||
| Liabilities and Stockholders’ Equity | ||||
| Accounts payable | $ 7,248,000* | |||
| Capital stock | 27,000,000 | |||
| Retained earnings | 8,058,000 | |||
| Total liabilities and stockholders’ equity | $42,306,000 | |||
| * For purchase of direct materials only. | ||||
Optima will pay quarterly dividends of $300,000. At the end of the fourth quarter, $2 million of equipment will be purchased.
Required:
Prepare a master budget for Optima Company for each quarter of 20X1 and for the year in total. The following component budgets must be included:
1. Sales Budget (units and budgeted sales in thousands)
| Optima Company | |||||
| Sales Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Units | |||||
| Unit price | $ | $ | $ | $ | $ |
| Total sales | $ | $ | $ | $ | $ |
Feedback
Correct
2. Production budget (amounts in full, not in thousands) If an amount is zero, enter "0".
| Optima Company | |||||
| Production Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Sales | |||||
| Desired ending inventory | |||||
| Total needs | |||||
| Less: Beginning inventory | |||||
| Production | |||||
Feedback
Correct
3. Direct Materials Purchases Budget (in thousands, except for per unit/hour data) If required, round answers to one decimal place.
| Optima Company | |||||
| Direct Materials Purchases Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Production | |||||
| Materials/unit | |||||
| Production needs | |||||
| Desired ending inventory | |||||
| Total needs | |||||
| Less: Beginning inventory | |||||
| Purchases | |||||
| Cost per unit | $ | $ | $ | $ | $ |
| Purchase cost | $ | $ | $ | $ | $ |
Feedback
Partially correct
4. Direct Labor Budget (in thousands, except per unit/hour data)
| Optima Company | |||||
| Direct Labor Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Production | |||||
| Hours per unit | |||||
| Hours needed | |||||
| Cost per hour | $ | $ | $ | $ | $ |
| Total cost | $ | $ | $ | $ | $ |
Feedback
Correct
5. Overhead Budget (in thousands, except per unit/hour data)
| Optima Company | |||||
| Overhead Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Budgeted hours | |||||
| Variable rate | $ | $ | $ | $ | $ |
| Budgeted VOH | $ | $ | $ | $ | $ |
| Budgeted FOH | |||||
| Total OH | $ | $ | $ | $ | $ |
Feedback
Correct
6. Selling and Administrative Expenses Budget (in thousands, except per unit/hour data)
| Optima Company | |||||
| Selling and Administrative Expenses Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Planned sales | |||||
| Variable rate | $ | $ | $ | $ | $ |
| Variable expenses | $ | $ | $ | $ | $ |
| Fixed expenses | |||||
| Total expenses | $ | $ | $ | $ | $ |
Feedback
Correct
7. Ending finished goods inventory budget. Enter amounts in full, not in thousands. Round to the nearest cent.
| Optima Company | |
| Ending Finished Goods Inventory Budget | |
| For the Year Ending December 31, 20X1 | |
| Unit cost computation: | |
| Direct materials | $ |
| Direct labor | |
| Overhead: | |
| Variable | |
| Fixed | |
| Total unit cost | $ |
| Finished goods | $ |
Feedback
Correct
8. Cost of goods sold budget (Note: Assume that there is no change in work-in-process inventories.) Enter amounts in full, not in thousands. If an amount is zero, enter "0".
| Optima Company | |
| Cost of Goods Sold Budget | |
| For the Year Ending December 31, 20X1 | |
| Direct materials used | $ |
| Direct labor used | |
| Overhead | |
| Budgeted manufacturing costs | $ |
| Add: Beginning finished goods inventory | |
| Cost of goods available for sale | $ |
| Less: Ending finished goods inventory | |
| Budgeted cost of goods sold | $ |
Feedback
Partially correct
9. Cash Budget (in thousands)
| Optima Company | |||||
| Cash Budget | |||||
| For the Year Ending December 31, 20X1 | |||||
| Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | Total | |
| Beginning cash bal. | $ | $ | $ | $ | $ |
| Collections: | |||||
| Credit sales: | |||||
| Current quarter | |||||
| Prior quarter | |||||
| Cash available | $ | $ | $ | $ | |
| Less disbursements: | |||||
| Direct materials: | |||||
| Current quarter | $ | $ | $ | $ | $ |
| Prior quarter | |||||
| Direct labor | |||||
| Overhead | |||||
| Selling and admin. | |||||
| Dividends | |||||
| Equipment | |||||
| Total cash needs | $ | $ | $ | $ | $ |
| Ending cash | $ | $ | $ | $ | $ |
Feedback
Partially correct
10. Pro forma income statement (using absorption costing). Enter amounts in full, not in thousands.(Note: Ignore income taxes.)
| Optima Company | |
| Pro Forma Income Statement | |
| For the Year Ending December 31, 20X1 | |
| Sales | $ |
| Less: Cost of goods sold | |
| Gross margin | $ |
| Less: Selling and administrative expenses | |
| Income before taxes | $ |
Feedback
Partially correct
11. Pro forma balance sheet. Enter amounts in full, not in thousands. List all assets and liabilities in order of liquidity. (Note: Ignore income taxes.)
| Optima Company | |
| Pro Forma Balance Sheet | |
| December 31, 20X1 | |
| Assets | |
| Cash | $ |
| Accounts receivable | |
| Direct materials inventory | |
| Finished goods inventory | |
| Plant and equipment | |
| Total assets | $ |
| Liabilities and stockholders' equity | |
| Accounts payable | $ |
| Capital stock | |
| Retained earnings | |
| Total liabilities and stockholders' equity | $ |
In: Accounting
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.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (24,000 units) | $ | 871,200 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 288,000 | ||||
| Variable selling and administrative | 186,000 | 474,000 | ||||
| Contribution margin | 397,200 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 224,100 | |||||
| Fixed selling and administrative | 218,000 | 442,100 | ||||
| Net operating loss | $ | ( 44,900) | ||||
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:
| Units produced | 27,000 | |||
| Units sold | 24,000 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.40 | ||
| Direct labor | $ | 2.70 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 7.75 | ||
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 27,000 units but sold 30,000 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 EXPLAIN AND BOLD ALL ANSWERS THANK YOU
1A. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.)
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1B...What is the company’s absorption costing net operating income (loss) for the quarter?
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Advertising Beginning merchandise inventory Commissions Cost of goods sold Depreciation Direct labor Direct materials Ending merchandise inventory Fixed manufacturing overhead Indirect labor Indirect materials Purchases Sales Selling and administrative expenses Variable manufacturing overhead |
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1C... Reconcile the variable and absorption costing net operating income (loss) figures. (Losses and deductions should be entered as a negative.)
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3A. During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. What is the company’s variable costing net operating income (loss) for the second quarter?
|
Administrative expenses Advertising Beginning merchandise inventory Commissions Depreciation Ending merchandise inventory Fixed manufacturing overhead Fixed selling and administrative Indirect labor Indirect materials Purchases Sales Variable cost of goods sold Variable selling and administrative |
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3B... During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. What is the company’s absorption costing net operating income (loss) for the second quarter?
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Advertising Beginning merchandise inventory Commissions Cost of goods sold Depreciation Direct labor Direct materials Ending merchandise inventory Fixed manufacturing overhead Indirect labor Indirect materials Purchases Sales Selling and administrative expenses Variable manufacturing overhead |
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3C... During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter. (Losses and deductions should be entered as a negative.)
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In: Accounting
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.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,450 units) | $ | 1,138,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 432,440 | ||||
| Variable selling and administrative | 199,150 | 631,590 | ||||
| Contribution margin | 506,410 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 267,600 | |||||
| Fixed selling and administrative | 258,810 | 526,410 | ||||
| Net operating loss | $ | ( 20,000) | ||||
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:
| Units produced | 33,450 | |||
| Units sold | 28,450 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.20 | ||
| Direct labor | $ | 6.00 | ||
| Variable manufacturing overhead | $ | 2.00 | ||
| Variable selling and administrative | $ | 7.00 | ||
Required:
(I already correctly answered the other questions, and I just need help with part 3C)
1. Complete the following:
a. Compute the unit product cost under absorption costing.
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b. What is the company’s absorption costing net operating income (loss) for the quarter?
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c. Reconcile the variable and absorption costing net operating income (loss) figures.b. What is the company’s absorption costing net operating income (loss) for the quarter?
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3. During the second quarter of operations, the company again produced 33,450 units but sold 38,450 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
During the second quarter of operations, the company again produced 33,450 units but sold 38,450 units. (Assume no change in total fixed costs.) What is the company’s variable costing net operating income (loss) for the second quarter?
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b. What is the company’s absorption costing net operating income (loss) for the second quarter?
During the second quarter of operations, the company again produced 33,450 units but sold 38,450 units. (Assume no change in total fixed costs.) What is the company’s absorption costing net operating income (loss) for the second quarter?
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c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
During the second quarter of operations, the company again produced 33,450 units but sold 38,450 units. (Assume no change in total fixed costs.) Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter.
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In: Accounting
Suppose Congress decided to strip the Fed of its monetary policy independence and legislate interest rate changes.
How would you expect the policy choices to change? Which arrangement would most likely provide price stability?
The most likely result in the short run would be ______.
In the long run, the inflation rate would ______.
A.
an increase in money growth and falling interest rates;
rise and nominal interest rates would rise
B.
a decrease in money growth and rising interest rates;
fall and nominal interest rates would rise further
C.
an increase in money growth and falling interest rates;
fall and nominal interest rates would fall further
D.
a decrease in money growth and rising interest rates;
fall and nominal interest rates would fall
In: Economics
1.The basic economic decision rule is to undertake an action only when the marginal benefits of that action are greater than its marginal costs.
a.true b. false
2.Microeconomics is the study of individual choice, and how that choice is influenced by economic forces.
a.true b. false
3.An economic system does all of the following except:
a.provide a mechanism for determining how goods and services are distributed and to whom.
b.provide a mechanism that determines how goods and services are produced.
c.provide a mechanism that determines what is produced
d.satisfy all the wants and desires if every individual in the society.
4.If a student is observed dropping a course from her Fall Quarter schedule, an economist is most likely to conclude that:
a.the course was the last additional course for which the marginal benefit was positive.
b.the marginal benefit of dropping that course must be greater than the marginal cost.
c.the additional cost in tuition and study time must be less than the additional benefit of that particular course..
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d.the student has now maximized total benefits from her quarter's course load. Q.5.The opportunity cost of spending $200 Million on a bridge might include all of the following except: a.the health care benefits that could have been provided to poor individuals with the $200 Million. b.the other types of infrastructure that could have been built with the $200 Million. c.the salaries of the architects who designed the bridge d.
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In: Economics
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. Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,100 units) $ 1,124,000 Variable expenses: Variable cost of goods sold $ 438,360 Variable selling and administrative 191,080 629,440 Contribution margin 494,560 Fixed expenses: Fixed manufacturing overhead 279,900 Fixed selling and administrative 228,160 508,060 Net operating loss $ ( 13,500) 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: Units produced 31,100 Units sold 28,100 Variable costs per unit: Direct materials $ 7.50 Direct labor $ 6.50 Variable manufacturing overhead $ 1.60 Variable selling and administrative $ 6.80 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 31,100 units but sold 34,100 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.
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.
In: Accounting