Morrisey & Brown, Ltd., of Sydney, Australia, is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company’s income statements for the three most recent months follow:

(Note: Morrisey & Brown, Ltd.’s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.)

Required:

1. Identify each of the company’s expenses (including cost of goods sold) as being variable, fixed, or mixed.

2-a. Using the high-low method, separate each mixed expense into variable and fixed elements.

2-b. Using the high-low method, state the cost formula for each mixed expense.

3. Redo the company's income statement at the 5,720-unit level of activity using the contribution format.

4. Assume that the company’s sales are projected to be 4,800 units in the next quarter. Prepare a contribution margin income statement.

Gaby Manufacturing Company had the following account balances for the quarter ending September 30, unless otherwise noted:

Amortization of manufacturing equipment                   $88,000

Amortization of office equipment                                      41,200

Direct manufacturing labour                                             160,000

Direct materials used                                                           126,000

Finished goods inventory (July 1)                                    180,000

Finished goods inventory (September 30)                      170,000

General office expenses                                                       101,800

Indirect manufacturing labour                                            62,000

Indirect materials used                                                         28,000

Marketing distribution costs                                                10,000

Miscellaneous plant overhead                                             45,000

Plant utilities                                                                           30,800

Property taxes on plant building                                          9,600

Property taxes on salespersons' company vehicles           4,000

Work-in-process inventory (July 1)                                    46,800

Work-in-process inventory (September 30)                     57,000

Required:

a.    Prepare a cost of goods manufactured schedule for the quarter.

b.    Prepare a cost of goods sold schedule for the quarter.

Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted: Work-in-process inventory (January 1) $ 140,400 Work-in-process inventory (March 31) 171,000 Finished goods inventory (January 1) 540,000 Finished goods inventory (March 31) 510,000 Direct materials used 378,000 Indirect materials used 84,000 Direct manufacturing labor 480,000 Indirect manufacturing labor 186,000 Property taxes on manufacturing plant building 28,800 Salespersons' company vehicle costs 12,000 Depreciation of manufacturing equipment 264,000 Depreciation of office equipment 123,600 Miscellaneous plant overhead 135,000 Plant utilities 92,400 General office expenses 305,400 Marketing distribution costs 30,000 Required: a. Prepare a cost of goods manufactured schedule for the quarter. b. Prepare a cost of goods sold schedule for the quarter.

Lopez Manufacturing Company had the following account balances for the quarter ending June 30, unless otherwise noted:

      Work-in-process inventory (April 1)                $ 149,300

      Work-in-process inventory (March 31)               181,700

      Finished goods inventory (January 1)                 550,000

      Finished goods inventory (March 31)                 513,000

      Direct materials used                                           391,000

      Indirect materials used                                          96,000

      Direct manufacturing labor                                 494,000

      Indirect manufacturing labor                               212,000

      Property taxes on manufacturing plant building   35,700

      Salespersons' company car costs                           19,000

      Depreciation of manufacturing equipment          287,200

      Depreciation of office equipment                        137,400

      Miscellaneous plant overhead                             133,100

      Plant utilities                                                        129,000

      General office expenses                                       301,000

      Marketing distribution costs                                  51,800

Required:

a.   Prepare a cost of goods manufactured schedule for the quarter.

b.   Prepare a cost of goods sold schedule for the quarter.

Suppose the economy is experiencing a recessionary gap of $0.5 trillion. The marginal propensity to consumer is MPC = 0.2. To mitigate or close the gap, the fiscal government need to choose between two options: increase government spending G or decrease taxes. Fill in the gaps with numerical answers unless otherwise instructed. Round your answers to one decimal place (for example, 1.25 ~ 1.3).

1. The value of the spending multiplier is at most equal to .
2. The value of the tax multiplier is at most equal to .
3. Suppose the government chooses to not change the taxes. Then, it should increase spending by at least $ trillion in order to close the gap.
4. Suppose the government chooses to not change government spending. Then, it should decrease taxes by at least $ trillion in order to close the gap.

Simmons Brick Company had gross sales of $42,000 in November, $56,000 in December, $28,000 in January, $320,000 in February and $35,000 in March. The collections department estimates that 35 percent of the customers pay in the month of sale; 55 percent pay the next month; and the remaining 10 percent pay two months after purchase. Assume 90 days in the quarter.

. Calculate the days sales outstanding for the first quarter.

. Complete an aging schedule for the first quarter.

. Complete an uncollected balances (payments pattern) schedule for the first quarter.

Juicy Lemonade Company The Juicy Lemonade Company manufactures premium flavored organic lemonade. Management is ready to close the books for the end of the first quarter in 2019 and your supervisor has presented you with the following information. a. Total sales in gallons of flavored lemonade for January 2019 through March 2019 are as follows: January 14,000 February 15,000 March 17,000 Each gallon of lemonade is packaged in eight 16 ounce bottles and sold in a case that sells for $15.00 per case. The company produced 47,500 units during the first quarter of 2018. b. The company’s Variable Costs include the following Direct Materials of $1.50 per gallon Direct Labor of $____ per gallon (Each gallon of lemonade requires 15 minutes of direct labor time and the wage rate is $8.00 per hour) Variable MOH $_____per gallon (The variable overhead rate is $2.00 per machine hour and processing one gallon of lemonade takes 45 minutes of machine time) Variable Selling and Administrative costs of $1.50 per gallon c. The company’s Fixed Costs for the quarter include the following: Manufacturing Overhead $47,500 Selling and Administrative $28,900 The company’s fixed manufacturing overhead per gallon is $______. (The Fixed Manufacturing Overhead rate is based on Fixed Costs for the quarter and the units produced for the quarter.) d. The company’s manufacturing overhead is applied based on the number of gallons produced using the Variable Manufacturing Overhead Rate per gallon calculated in ‘b’ and the Fixed Manufacturing Overhead Rate per gallon calculated in ‘c’. e. Raw Materials Inventory consists entirely of direct materials and, at the beginning of the year, consists of 500 units of direct material at a cost of $1.50 per unit. The company purchased 48,000 units of direct material at a cost of $1.50 per unit. Each gallon of lemonade requires one unit of direct materials. f. Beginning Work in process inventory consists of 700 gallons of partially processed lemonade. All raw materials are added at the beginning of the production process and these partially completed units are 60% complete with respect to conversion costs. Ending work in process consists of 800 gallons of partially processed lemonade that are 50% complete with respect to conversion costs. The company completed and transferred out 47,500 units this quarter. The beginning work in process and current period costs are as follows Beginning WIP Direct Materials $1,225 Conversion Costs $1,995 Current period Costs Direct Materials $71,250 Conversion Costs $213,750 g. There are 300 gallons of lemonade in Finished Goods Inventory at the beginning of the year carried at a cost of $6.00. There are 1,800 gallons in ending Finished Goods Inventory carried at a cost of $6.00 per unit. You are required to prepare all of the following: 1. A Production Cost Report using both the weighted average and FIFO methods of assigning costs to goods transferred out and ending inventory. (50 points) 2. Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold using both methods of assigning costs to goods transferred out and ending inventory. (50 points) 3. Gross Margin and Contribution Margin Income Statements (HINT: For the Gross Margin Income Statement, Total Cost of Goods Sold should be equal to the Cost of Goods Sold calculated based on the FIFO method of assigning costs to goods transferred out and ending inventory). (50 points) 4. A Break-Even Analysis that includes all of the following components (HINT: Use the information from parts a, b, and c above for your calculations) (50 points) 4a. Break-Even in gallons and dollars 4b. Target Profit in gallons and dollars if the company wants a net operating income of $250,000 after taxes. The tax rate is 20%. 4c. Margin of Safety expressed in dollars, units, and as a percentage of sales.