Problem 23-1A 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, 29,500 bags; quarter 2, 43,900 bags. Selling price is $63 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) 8,200 12,300 18,100 Gumm (pounds) 9,300 10,100 13,300 Tarr (pounds) 14,300 20,300 25,200 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $14 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 $300,000 in quarter 1 and $423,500 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 $ $ Link to Text Link to Text Question Attempts: Unlimited Save for later Submit Answer

1. As you read each situation, answer the following for each situation:

I. Is the problem Inflation, Unemployment (type), or no problem?

II. Should money be increased? Should money be decreased? Or should neither be done?

III. Government Action Which specific policy(ies) should be used to address the problem? job training programs job information increase discount rate decrease discount rate increase the reserve rate decrease the reserve rate sell govt. bonds buy govt. bonds no change in government policy.

a. Business executives, worried about national conditions, cut back on business investment. This resulted in layoffs in the capital goods industry, reducing consumer spending by the laid-off workers.

b. Computers are replacing workers in the auto industry. These unemployed workers are unable to find new jobs.

c. Inflation is returning. Recent gas prices increases are expected to be followed by food price increases.

d. Worried about talk of a coming recession, consumers decrease their spending. Workers are being laid off as production orders are cut.

e. High technology has moved into the toy industry. Many workers in toys manufacturing plants have been laid off due to their lack of technical skills.

f. Expecting an increase in prices, consumers increase spending. This causes an increase in prices for most goods.

g. The economy is at full employment, but has a high inflation rate. Which combination of government policies is most likely to reduce the inflation rate?

h. Teachers around the country have quit their jobs because of long hours and low pay. They are looking for work outside of education

Q4:As opposed to fiat money, commodity money

Q5:

When inflation falls unexpectedly in the short run real wages _____ and so firms will provide _____ jobs.

Q6:

Which of the following is the M3 measure of the stock of money?

You are the manager of the Mighty Fine mutual fund. The following table reflects the activity of the fund during the last quarter. The fund started the quarter on January 1 with a balance of $100 million.

a. Calculate the quarterly arithmetic average return on the fund. (Round your answer to 2 decimal places.)

Arithmetic average               %

b. Calculate the quarterly geometric (time-weighted) average return on the fund. (Round your answer to 2 decimal places.)

Geometric average               %

c. Calculate the quarterly dollar-weighted average return on the fund. (Round your answer to 2 decimal places.)

Dollar-weighted average return               %

Now, it is time for you to test your knowledge of key economic indicators and the effects of economic measurements have on an economy.

The purpose of this assignment is to investigate and to gauge your understanding of key economic indicators by filling out the figure one (1) below and to write up your findings and compare and contrast the United States to that of China.

Compare and Contrast the United States to that of China

Assignment should include the following:

Title page

Introductory paragraph

Completed table inserted into your Word document

Summary of the United States and China

Summary must be at least 250-words or more in length

Conclusion to summarize your findings, and

Reference page (Reference page must be at the end of your paper and on a separate page).

Variances, Entries, and Income Statement
A summary of Martindale Company’s manufacturing variance report for May 2019 follows:

Standard materials cost per unit of product is 0.5 pounds at $8.40 per pound, and standard direct labor cost is 1.5 hours at $14.00 per hour. The total actual materials cost represents 4,800 pounds purchased at $8.70 per pound. Total actual labor cost represents 14,100 hours at $13.60 per hour. According to standards, variable overhead rate is applied at $1.60 per direct labor hour (based on a normal capacity of 15,000 direct labor hours or 10,000 units of product). Assume that all fixed overhead is applied to work-in-progress inventory.

a. Determine the following variances:

Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.

b. Prepare general journal entries to record standard costs, actual costs, and related variances for material, labor, and overhead.

c. Prepare journal entries to record the transfer of all completed units to Finished Goods Inventory and the subsequent sale of 8,400 units on account at $54 each (assume no beginning finished goods inventory).

d. Prepare a partial income statement (through gross profit on sales) showing gross profit based on standard costs, the incorporation of variances, and gross profit based on actual costs.

Do not use negative signs with any of your answers below.

Ivanhoe Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,280 and costs $540 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Ivanhoe also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Ivanhoe also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of 2020 from operations other than the Super Soaker are as follows.

Ivanhoe has the following information related to two Super Soaker revenue arrangements during the first quarter of 2020.

Diversified Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,200 and costs $540 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Diversified also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Diversified also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of 2017 from operations other than the Super Soaker are as follows. Revenues $9,500,000 Expenses ?7,750,000 Diversified has the following information related to two Super Soaker revenue arrangements during the first quarter of 2017. 1.Diversified sells 30 Super Soakers to businesses in flood-prone areas for a total contract price of $54,600. In addition to the pumps, Diversified also provides installation (at a cost of $150 per pump). On a standalone basis, the fair value of this service is $200 per unit installed. The contract payment also includes a $10 per month service plan for the pumps for 3 years after installation (Diversified's cost to provide this service is $7 per month). The Super Soakers are delivered and installed on March 1, 2017, and full payment is made to Diversified. Any discount is applied to the pump/installation bundle. 2.Diversified ships 300 Super Soakers to Menards on consignment. By March 31, 2017, Menards has sold two-thirds of the consigned merchandise at the listed price of $1,200 per unit. Menards notifies Diversified of the sales, retains a 5% commission, and remits the cash due Diversified.

Accounting:Determine Diversified Industries' 2017 first-quarter net income. (Ignore taxes.)

Analysis: Determine free cash flow for Diversified Industries for the first quarter of 2017. In the first quarter, Diversified had depreciation expense of $175,000 and a net increase in working capital (change in accounts receivable and accounts payable) of $250,000. In the first quarter, capital expenditures were $500,000; Diversified paid dividends of $120,000.

Diane Buswell is preparing the 2019 budget for one of Current Designs' kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2019.

Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2020 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2018, will be 200 kayaks.

Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2018, is 19,400 pounds. The finishing kits can be assembled as they are needed. As a result, Current Designs does not maintain a significant inventory of the finishing kits.

The polyethylene powder used in these kayaks costs $1.50 per pound, and the finishing kits cost $170 each. Production of a single kayak requires 2 hours of time by more experienced, type I employees and 3 hours of finishing time by type II employees. The type I employees are paid $15 per hour, and the type II employees are paid $12 per hour.

Selling and administrative expenses for this line are expected to be $45 per unit sold plus $7,500 per quarter. Manufacturing overhead is assigned at 150% of labor costs.

Instructions:

Determine a sales price for your kayaks that you feel is reasonable and a short explanation on this decision, then using the sales projections and other budgets, prepare the following:

a. Sales Budget

b. Budgeted Income Statement