Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 70,400 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 78,400 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 72,000 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 72,000 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

managerial accounting

Lark corporation’s managerial accountants and the budget committee is meeting in November to prepare the 2019 budget. Your task, as a member of the budget committee, is to prepare the 2019 budget given the following data: Sales: The company expects to sell 15% more units in 2019 than in each quarter of 2018. During 2018, sales were Q1: 40,000; Q2: 32,000; Q3: 60,000 and Q4: 44,000 units. The selling price per unit is expected to be $50 in the first three quarters, but only $40 per unit in Q4 because the substantial competition is expected to begin in Q4 of 2019. Sales are expected to 40,000 units in Q1 of 2020. Production: The company wants to maintain the ending finished goods inventory at 30% of the next quarter’s expected unit sales. Assume that this will hold to start Q1 of 2019 so that beginning finished goods inventory is (.30) (40,000) (1.15) = (.3) (46,000) = 13,800 units. Direct Material: Direct raw material requirements are 5 kilograms per unit of output produced and the cost is $1.5 per kilogram of materials. Management desires to maintain raw materials inventories at 5% of the next quarter’s production requirements. Assume the production requirements for the first quarter of 2020 are 315,000 kilograms. Each unit of final goods produced requires 1.5 hours of direct labor time at $12 per hour. Variable overhead costs are calculated per unit of direct labor hours as follows: indirect labor $0.2, indirect materials $0.1, maintenance $0.5. ANNUAL fixed overhead costs are: supervisory salaries $200,000, maintenance $60,000, depreciation $80,000. They are allocated equally across quarters. Instructions: Prepare the following budgets by quarter for the year 2019 (also show the cumulative or annual totals): [Use the format shown in the textbook to prepare each quarter’s budget. Your work and calculations MUST be done using a Microsoft Excel spreadsheet including formulas] (a) Sales budget (b) Productionbudget (c) Direct materials budget (d) Directlaborbudget (e) Manufacturing overhead budget

4.2 Question 4.2.1 to 4.2.3 is based on the excerpt below:

SA Household Finances are in Dire Straits The South African Reserve Bank (Sarb) yesterday painted a bleak picture of household finances, saying household expenditure had tanked for the first time in three years. In its quarterly bulletin for June, published yesterday, the central bank said consumption expenditure by households had fallen by 0.8% in the first quarter of 2019 following a 3.2% increase in the fourth quarter of 2018 as the economy wanes. The economy is on a downward spiral with gross domestic product contracting by 3.2% in the first quarter of 2019 – the largest contraction since the first quarter of 2009 when it contracted by 6.1%, at the height of the global financial crisis. The Sarb said the deterioration in the household consumption was in line with the decline in consumer confidence in the first quarter of 2019, as measured by the First National Bank/Bureau for Economic Research Consumer Confidence Index.The Sarb said consumers’ finances had been under pressure due to the prolonged period of weak economic activity, rising unemployment, an increased tax burden and successive fuel price increases. Growth in the real disposable income of households was weighed down by lacklustre employment growth and slower wage growth.

4.2.1 The article states that “the economy is on a downward spiral……first quarter of 2019.” Explain which phase of the business cycle this represents. (5)

4.2.2 The article further states that “growth in the real disposable income……and slower wage growth.” In terms of this statement, discuss the type of fiscal policy that government can implement to remedy this situation, paying specific attention in your answer to the tool that needs to be targeted. (5)

4.2.3 Discuss a demand side policy that can be implemented by government to reduce unemployment mentioned in the article.

On January 1, 2015, the Mayfield Corporation issued $500 million of zero-coupon debentures, due December 31, 2025. The proceeds of the bond sale totaled approximately $192.772 million. Assuming semi-annual compounding, estimate the effective interest rate on the zero-coupon debentures. Calculate the interest expense incurred by the Mayfield Corporation during the first year that the debt was outstanding.

Calculate the interest expense incurred by the Mayfield Corporation during the first year that the debt was outstanding.
State your answer in $ millions and round your answers to one decimal place.

Para Corp is preparing its Master Budget for 20XX. To complete this problem you need to prepare a selection of Para’s individual budgets. Specifically, the Production Budget, the Direct Materials Budget and Schedule of Cash Payments, the Direct Labor Budget and the Ending Finished Goods Budget.

REQUIRED

1. PREPARE A PRODUCTION BUDGET (2 POINTS)

Prepare the Production Budget for the first three months of Para’s fiscal year (January, February, and March), along with the totals for the quarter using the format shown in the text book.

Relevant Information for preparing the Production Budget includes:

• Sales projections for the 3 months:
  • January – 75,000 units
  • February - 100,000 units
  • March – 90,000 units
  • April – last 5 digits of your student ID number
• Finished goods inventory on January 1, 20XX = 7,500 units
• Desired ending inventory for each month = 25% of the next month’s budgeted unit sales. 2. PREPARE A DIRECT MATERIALS BUDGET (3 POINTS)

(TO INSURE CONSISTENCY IN GRADING – USE THE REQUIRED PRODUCTION GIVEN HERE, NOT THE AMOUNTS YOU COMPUTED FOR QUESTION 1.)

Prepare the Direct Materials Budget for the first three months of Para’s fiscal year (January, February, and March), along with the totals for the quarter, using the format shown in the text book. Relevant Information for preparing the Direct Materials Budget includes:

Required Production for the 3 months:

• January – 95,000 units
• February - 120,000 units
• March – 110,000 units
• April – last 5 digits of your student ID number

Number of gallons needed per unit = 3

Raw materials inventory on January 1, 20XX = 30,000 gallons

Desired ending inventory for each month = 10% of the next month’s budgeted production

Raw materials cost per gallon = $2.00

3. PREPARE A SCHEDULE OF CASH PAYMENTS FOR RAW MATERIALS (3 POINTS)

(TO INSURE CONSISTENCY IN GRADING – USE THE COST OF GALLON PURCHASED GIVEN HERE, NOT THE AMOUNTS YOU COMPUTED IN PART 2.)

Prepare the Schedule of Cash Payments for the first three months of Para’s fiscal year (January, February, and March), along with the totals for the quarter, using the format shown in the textbook. Relevant information for the Schedule of Cash Payments includes:

• January cost of gallons purchased - $350,000

• February cost of gallons purchased - $400,000 units
• March cost of gallons purchased – $450,000
• Para pays for 40% of its purchases in the month of purchase, 50% in the month after purchase and 10% in the second month after purchase.
• Beginning Accounts Payable = $40,000

4. PREPARE A DIRECT LABOR BUDGET (2 POINTS)

Prepare the Direct Labor Budget for the first three months of Para’s fiscal year (January, February, and March), along with the totals for the quarter, using the format shown in the text book. Relevant information for the Direct Labor Budget includes:

• Use the required production amounts given for the Direct Materials Budget in Question #2.
• Each unit requires .5 hours of direct labor at a rate of $20 per hour.

5. PREPARE AN ENDING FINISHED GOODS BUDGET (2 POINTS)

Prepare the Ending Finished Goods Budget using the format shown in the text book. Be sure to compute an amount for ending finished goods inventory.

• Use the per unit amounts and costs given for Question 2 (Direct Materials Budget) and Question 4 (Direct Labor Budget)
• Assume Manufacturing Overhead is based on direct labor hours at a cost of $10 per hour.
• Assume ending finished goods inventory = 50,000 units.

April-last 5 digits of Student ID number is 53383

Part A

Epic Foods produces specialty soup sold in mason jars. The projected sales in dollars and jars for each quarter of the upcoming year are as follows:

Epic anticipates selling 223,000 jars with total sales revenue of $265,000 in the first quarter of the year (2022) following the year given in the table above. Epic has a policy that the ending inventory of jars must be 30% of the following quarter’s sales. Prepare a production budget for the year that shows the number of jars to be produced each quarter and the year in total.

PART B

Gable industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. Gable pays $3 for each computer chip. To help guard against stockouts of the computer chip Gable has a policy that states that the ending inventory of computer chips should be at least 20% of the following month’s production needs. The production schedule for the first four months of the year is as follows:

Required: Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget

The Ridgewood Antique Mall budgeted credit sales in the first quarter of 2018 to be as follows:

Credit sales in December 2017 are expected to be $194,000. The company expects to collect 95 percent of a month’s sales in the month of sale and 5 percent in the following month.

Estimate cash receipts for each month of the first quarter of 2018.