Iguana, Inc., manufactures bamboo picture frames that sell for $25
each. Each frame requires 4 linear feet of bamboo, which costs
$2.50 per foot. Each frame takes approximately 30 minutes to build,
and the labor rate averages $14 per hour. Iguana has the following
inventory policies:
Ending finished goods inventory should be 40 percent of next month’s sales.
Ending raw materials inventory should be 30 percent of next month’s production.
Expected unit sales (frames) for the upcoming months
follow:
| March | 370 |
| April | 440 |
| May | 490 |
| June | 590 |
| July | 565 |
| August | 615 |
Variable manufacturing overhead is incurred at a rate of $0.40 per
unit produced. Annual fixed manufacturing overhead is estimated to
be $7,200 ($600 per month) for expected production of 4,500 units
for the year. Selling and administrative expenses are estimated at
$650 per month plus $0.50 per unit sold.
Iguana, Inc., had $11,200 cash on
hand on April 1. Of its sales, 80 percent is in cash. Of the credit
sales, 50 percent is collected during the month of the sale, and 50
percent is collected during the month following the sale.
Of raw materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Raw materials purchases for March 1 totaled $4,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $340 in depreciation. During April, Iguana plans to pay $3,500 for a piece of equipment.
1.
value:
33.33 points
Required information
Required:
Compute the following for Iguana, Inc., for the second quarter
(April, May, and June).
|
In: Accounting
Problem 8-29 Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10]
The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:
| Current assets as of March 31: | ||
| Cash | $ |
7,400 |
| Accounts receivable | $ |
19,600 |
| Inventory | $ |
39,000 |
| Building and equipment, net | $ |
126,000 |
| Accounts payable | $ |
23,175 |
| Common stock | $ |
150,000 |
| Retained earnings | $ |
18,825 |
The gross margin is 25% of sales.
Actual and budgeted sales data:
| March (actual) | $ | 49,000 |
| April | $ | 65,000 |
| May | $ | 70,000 |
| June | $ | 95,000 |
| July | $ | 46,000 |
Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.
Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.
One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.
Monthly expenses are as follows: commissions, 12% of sales; rent, $2,200 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $945 per month (includes depreciation on new assets).
Equipment costing $1,400 will be purchased for cash in April.
Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required:
Using the preceding data:
1. Complete the following schedule (Expected Cash Collection):
2. Complete the following (Merchandise Purchase Budget and Schedule of Expected cash disbursments - Merchandise Purchase Budget) :
3. Complete the following cash budget:
4. Prepare an absorption costing income statement for the quarter ended June 30.
In: Accounting
SECTION A.
MULTIPLE CHOICE QUESTION : ANSWER ALL QUESTIONS
1. The opportunity cost of holding money _________
A. is zero because money is not an economic resource.
B. varies inversely with the interest rate.
C. varies directly with the interest rate.
D. varies inversely with the level of economic activity.
2. The consumer price index is used to ___________
A. monitor changes in the level of wholesale prices in the economy.
B. monitor changes in the cost of living over time.
C. monitor changes in the level of real GDP over time.
D. monitor changes in the stock market.
3. Gross domestic product measures __________
A. income and expenditures
B. income but not expenditures.
C. expenditures but not income.
D. neither income nor expenditures.
4. According to the circular-flow diagram GDP ______________
A. can be computed as the total income paid by firms or as expenditures on final goods and services.
B. can be computed as the total income paid by firms, but not as expenditures on final goods and services.
C. can be computed as expenditures on final goods and services, but not as the total income paid by firms.
D. cannot be computed as either total income paid by firms or expenditures on final goods and services.
5. Which of the following is not a question that macroeconomists address?
A. Why is average income high in some countries while it is low in others?
B. Why does the price of oil rise when war erupts in the Middle East?
C. Why do production and employment expand in some years and contract in others?
D. Why do prices rise rapidly in some periods of time while they are more stable in other periods?
6. The term “recession” describes a situation where _____________
A. inflation rates exceed normal levels.
B. output and living standards decline.
C. an economy’s ability to produce is destroyed.
D. government takes a less active role in economic matters.
7. Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered as _________
A. cyclically unemployed.
B. frictionally unemployed.
C. structurally unemployed.
D. employed
8. Inflation means that ____________
A. all prices are rising, but at different rates.
B. all prices are rising and at the same rate.
C. prices on average are rising, although some particular prices may be falling.
D. real incomes are rising.
9. Macroeconomics is mostly focused on _____________
A. the individual markets within an economy.
B. only the largest industries in the economy.
C. the economy as a whole.
D. why specific businesses fail.
10. The phase of the business cycle in which real GDP declines is called _____
A. the peak.
B. an expansion.
C. a recession.
D. the trough.
11. Inflation affects ______
A. both the level and the distribution of income.
B. neither the level nor the distribution of income.
C. the distribution, but not the level, of income.
D. the level, but not the distribution, of income.
12. The curve that shows the quantity of goods and services that firms produce and sell _________.
A. as it relates to the quantity of goods and services that buyers want to buy is called the aggregate-demand curve
B. as it relates to the quantity of goods and services that buyers want to buy is called the aggregate-supply curve
C. as it relates to the overall price level is called the aggregate-demand curve
D. as it relates to the overall price level is called the aggregate-supply curve
13. The unemployment rate measures, at a point in time, the ________.
A. percentage of workers who do not have a job
B. percentage of workers who do not have a job but are looking for work
C. percentage of workers who stop working
D. percentage of workers who are looking for work
14. When households have very low savings ________.
A. investment decreases
B. they are less able to cope with severe economic downturns
C. bankruptcies increase
D. all of the above
15. Which of the following would an economist consider to be investment?
A. Boeing building a new factory
B. Oprah buying a $10 million home from a fellow celebrity
C. A stockbroker buying 10,000 shares of Starbucks stock
D. Tony Fernandes sold Air Asia to the Malaysian government
16. Other things the same, as the price level decreases it induces greater spending on ____.
A. both net exports and investment
B. net exports but not investment
C. investment but not net exports
D. neither net exports nor investment
17. Productivity is defined as the quantity of ___________________________.
A. labor required to produce a nation’s GDP
B. labor required to produce one unit of goods and services
C. goods and services produced from each unit of labor input
D. goods and services produced per unit of time
18. A recession is always associated with __________
A. the end of a war.
B. slowly growing real GDP.
C. rising inflation.
D. declining real GDP.
19. GDP is defined as the ___________________
A. value of all goods and services produced within a country in a given period of time.
B. value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
C. value of all final goods and services produced within a country in a given period of time.
D. value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
20. In a simple circular-flow diagram, total income and total expenditure are _________
A. never equal because total income always exceeds total expenditure.
B. seldom equal because of the ongoing changes in an economy’s unemployment rate.
C. equal only when the government purchases no goods or services.
D. always equal because every transaction has a buyer and a seller.
21. In a simple circular-flow diagram, firms use the money they get from a sale to _____
A. pay wages to workers.
B. pay rent to landlords.
C. pay profit to the firms owners.
D. All of the above are correct.
22. The labor force includes ____________
A. employed workers and persons who are officially unemployed.
B. employed workers, but excludes persons who are officially unemployed.
C. full-time workers, but excludes part-time workers.
D. permanent employees, but excludes temporary employees.
23. A certificate of indebtedness that specifies the obligations of the borrower to the holder is called a ________.
A. bond
B. stock
C. mutual fund
D. All above are correct
24. Which of the following is not included in GDP?
A. carrots grown in your garden and eaten by your family
B. carrots purchased at a farmer’s market and eaten by your family
C. carrots purchased at a grocery store and eaten by your family
D. None of the above are included in GDP.
25. Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist?
A. Why do prices in general rise by more in some countries than in others?
B. Why do wages differ across industries?
C. Why do national production and income increase in some periods and not in
others?
D. How rapidly is GDP currently increasing?
In: Economics
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:
| Fixed Cost per Month |
Cost per Car Washed |
||||
| Cleaning supplies | $ | 0.70 | |||
| Electricity | $ | 1,200 | $ | 0.09 | |
| Maintenance | $ | 0.25 | |||
| Wages and salaries | $ | 4,800 | $ | 0.20 | |
| Depreciation | $ | 8,000 | |||
| Rent | $ | 2,100 | |||
| Administrative expenses | $ | 1,600 | $ | 0.03 | |
For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.20 per car washed.
The actual operating results for August appear below.
| Lavage Rapide Income Statement For the Month Ended August 31 |
||
| Actual cars washed | 8,500 | |
| Revenue | $ | 54,180 |
| Expenses: | ||
| Cleaning supplies | 6,380 | |
| Electricity | 1,926 | |
| Maintenance | 2,340 | |
| Wages and salaries | 6,840 | |
| Depreciation | 8,000 | |
| Rent | 2,300 | |
| Administrative expenses | 1,752 | |
| Total expense | 29,538 | |
| Net operating income | $ | 24,642 |
Required:
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
| Revenue | Revenue and spending variances | Revenue and Spending Variances | Activity Variances | Activity Variances |
| Expenses : | ||||
| Cleaning Supplies | No need to fill | No need to fill | No need to fill | No need to fill |
| Electricity | ||||
| Maintenance | ||||
| Wages and Salaries | ||||
| Depreciation | ||||
| Rent | ||||
| Administrative Expenses | ||||
| Total Expenses | ||||
| Net Operating Income | ||||
In: Accounting
[9] Using the Keynesian approach, if leakages from the spending stream are less than injections, the current level of output is: A) less than the equilibrium level of output, and will increase. B) less than the equilibrium level of output, and will decrease. C) greater than the equilibrium level of output, and will increase. D) greater than the equilibrium level of output, and will decrease.
[10] Using the Keynesian approach, if leakages from the spending stream are less than injections into the spending stream, total spending will be: A) less than total output, and total output will decrease. B) less than total output, and total spending will increase. C) greater than total output, and total output will increase. D) greater than total output, and total spending will decrease.
[11] A primary assumption of new classical economics is: A) wages and prices are not flexible. B) an upward sloping aggregate demand curve. C) over the long run the economy will operate at the natural rate of unemployment. D) all of these answers are correct.
[12] According to new classical economics, the wealth effect, the interest rate effect, and the foreign trade effect: A) keep the economy from operating at full employment. B) cause the aggregate supply curve to be upward sloping. C) cause the aggregate demand curve to be downward sloping. D) none of these answers are correct.
[13] In the new classical model, the aggregate supply curve is: A) upward sloping in both the short run and the long run. B) perfectly vertical at the natural rate of unemployment in both the short run and the long run. C) upward sloping in the short run and perfectly vertical at the natural rate of unemployment in the long run. D) perfectly vertical at the natural rate of unemployment in the short run and upward sloping in the long run.
[14] A primary conclusion of new classical economics is: A) wages and prices are inflexible downward. B) there is no short run tradeoff between unemployment and inflation. C) a free market economy can operate at less than full employment for long periods of time. D) government intervention in the economy will be rendered ineffective by the responses of businesses and households to these policies.
[15] According to the rational expectations approach, an announcement that interest rates may be raised to curb inflation would likely cause businesses and households to: A) put political pressure on officials to cancel the planned interest rate changes. B) go along with the policy knowing that it is in their best interest to curb inflation. C) immediately borrow and increase their spending to beat the rise in the interest rates. D) reduce borrowing and depend more on the expenditure of saved income and earnings.
In: Economics
Problem 1: Endowment losses. An American university endowment has experienced severe losses over the past year. The value of the university's endowment is $1B as of today (t=0). The interest rate (i.e. the expected annual investment return on the endowment) is r = 7%. (a) What amount can the university spend from the endowment at t=1 if it would like the amount spent to grow by g=4% per year from then on and has no other resources than the endowment? (b) The planned spending is, however, much larger. Back when things looked better, the university set up plans to spend $40M at t=1, with future spending growing by 4% per year. What is the PV of the planned spending? How large is the shortfall between the PV of the planned spending and the value of the endowment? (c) The university president approaches the university's business school for innovative ideas for how to cover the shortfall to avoid having to cut spending. The business school 1 suggests that the university sets up a campus in Abu Dhabi and negotiates the following deal: Abu Dhabi will pay the university $200M today (t=0) for the right to name the campus after the famed university for the next 12 years (i.e. up to t=12) and have classes taught by professors from the university. The new campus would be ready to open two years from now (t=2). At the end of each of the following 10 years (t=3, 4, 5, 6, ...,12) Abu Dhabi would pay the university $24M (Abu Dhabi would also cover the cost of hiring extra faculty and travel cost for US faculty to go teach on the new campus, so the $24M is the university's per year profit). The deal would end at t=12. What is the PV of the deal with Abu Dhabi? Is it sufficient to cover the shortfall? (d) The university president is impressed with the PV calculations but would also like to know exactly how the endowment will develop over the years, assuming the deal with Abu Dhabi is accepted. At t=0 after the initial payment from Abu Dhabi, the value of the endowment is $1.2B. What is the value of the endowment at t=1 (after interest is received and after paying for the university's t=1 spending)? What is the value of the endowment at t=12 (after interest is received, after the last payment from Abu Dhabi and after paying for the university's t=12 spending)? At what time will the endowment equal zero if the deal with Abu Dhabi is not accepted (please report the time at which the endowment rest goes negative)? Hint: Do not bother with Excel functions here, just calculate the value of the endowment in a spreadsheet year by year for the different cases.
In: Finance
another method of multiplexing involves the use of tri-state devices. First of all, how are multiplexers used and second, what are tri-state devices and why do we really care about tri-state device (yes we most emphatically DO CARE.. they are very important).
In: Electrical Engineering
Use well labeled diagrams to explain the following two phenomena: the first is that at sunset (or sunrise) the sun appears to be much redder than at mid-day, the second involves the pattern of polarization of the sky when the sun is about to set. Where is the sky most polarized? What orientation is this polarization and why?
In: Physics
21. Which of the following
is a direct cost of a specific department in a retail store?
A. company president’s
salary
B. rent on the
store
C. utilities for the
store
D. cost of the
department’s inventory
22. You have tickets to go to Mexico (Cancun specifically) over spring break. Just this week your best friend informs you that s/he is getting married over spring break and would like you to be in the wedding as an attendant. Which of the following is a sunk cost that should not be relevant to your decision as to whether be in the wedding or go on the trip to Mexico?
23. If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 360,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
a. 300,000 pounds
b. 480,000 pounds
c. 240,000 pounds
d. 420,000 pounds
24. In a production budget, total required production units are the budgeted sales units plus
a. beginning finished goods units.
b. desired ending finished goods units.
c. desired ending finished goods units plus beginning finished goods units.
d. desired ending finished goods units minus beginning finished goods units.
25. In most cases, prices are set by the
a. customers.
b. competitive market.
c. largest competitor.
d. selling company.
In: Accounting
transaction
From the January there should be loss 1445 euros.
Please note, that you can do your submission even if you don't get the correct profit/loss - this is learning by doing - so most important thing is that you have tried to do your best.
Here are the transactions of Prick Ltd from January. Do the entries and after that close all accounts either to Income Statement or to Balance Sheet
1.1. Owner has invested €6 300 as an initial capital, the money is deposited to the bank account.
14.1. We pay the credit from 9.1. by bank transfer.
3.1. We pay the rent from January €560 by bank transfer.
15.1. We buy goods to be sold forward against invoice €4 300.
5.1. We buy new computer to the office, the payment €630 is made by debit card.
16.1. We sell goods to our customers and receive €3 890 in cash.
7.1. We buy goods to be sold forward. The payment €3500 is made by debit card.
19.1. We pay salaries (net) €2 900 by bank transfer.
8.1. We sell goods to our customers and receive €4 800 in cash.
20.1. We buy goods to be sold forward, the payment €1 800 is made in cash.
9.1. We buy goods to be sold forward against invoice €3 250.
21.1. We sell goods to our customers and receive €5 340 in cash.
10.1. We buy office supplies, the payment €170 is made in cash
24.1. We transfer €6 900 from cash register to the bank account
12.1. We sell goods to our customers and receive €1 800 in cash.
28.1. We buy cleaning utensils, the payment €165 is made in cash.
13.1. We transfer €6100 from cash register to the bank account
29.1. We pay the credit from 14.1. by bank transfer.
In: Accounting