The U.S. Department of Commerce publishes data on industrial machinery and equipment. Shown here are the shipments (in $ billions) of industrial machinery and equipment from the first quarter of year 1 through the fourth quarter of year 6. Use these data and the seasonal indexes below to deseasonalize the data.

Give the answer for quarter 1 year 5. (Rounded to three decimal places.)

1st Quarter (year 5)=

Monitoring of Receivables

The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows:

Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 10% paid in the month of sale, 50% paid in the first month following the sale, and 40% paid in the second month following the sale.

1. What was Fogler’s receivables balance at the end of March and at the end of June? Do not round intermediate calculations. Round your answers to the nearest dollar.

   March receivables: $  

   June receivables: $  

2. Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? Do not round intermediate calculations. Round ADS answers to the nearest dollar and DSO answers to one decimal place.

   1st Quarter ADS: $  

   1st Quarter DSO:       days

   2nd Quarter ADS: $  

   2nd Quarter DSO:      days

   What were the cumulative ADS and DSO for the first half-year? Do not round intermediate calculations. Round ADS answer to the nearest dollar and DSO answer to one decimal place.

   Cumulative Quarter ADS: $  

   Cumulative Quarter DSO:      days

3. Construct an aging schedule as of June 30. Use account ages of 0–30, 31–60, and 61–90 days. Do not round intermediate calculations. Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If no entry is required, enter "0".

   Age of Accounts (days)		Dollar Value	Percent of Total
   0 - 30		$		%
   31 - 60
   61 - 90
   		$		%

4. Construct the uncollected balances schedule for the second quarter as of June 30. Do not round intermediate calculations. Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If no entry is required, enter "0".

   Quarter 2		Sales		Receivables	Receivables/Sales
   April		$		$		%
   May
   June
   				$		%

Elf Company manufactures miniature picnic tables to be sold to elementary schools and children daycares. The controller of Elf Company is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the sales manager for the first half of 2020:

January                                                            8,500 tables

February                                                          9,000 tables

March                                                              9,500 tables

April                                                                10,000 tables

May                                                                 12,000 tables

June                                                                 15,000 tables

Each table sells for $50 and all sales are on account. Past history has shown that 30% of credit sales are collected in the month that the sale occurred, 40% of the sales are collected the month following the month of sale, 25% of credit sales are collected two months following the month of sale and the remaining 5% is collected in the third month following the sale. The estimated sales for July and August are 16,000 and 16,500 tables respectively. Elf Company had 2,000 tables in finished goods inventory at the end of March. The department ends each month with enough finished-goods inventory to cover 20 percent of the next month’s sales.

Each picnic table requires 10 board metres of spruce blanks to manufacture. Spruce planks cost $0.50 per board metre, and the production department ends each month with enough wood to cover 10 percent of the next month’s production requirements. The company had 10,400 board metres of spruce wood in its ending raw material inventory at the end of March. The purchase of wood is all on account and the company pays 60% of its purchases in the month of purchase and the remaining 40% in the month following the purchase. Purchases of wood in March totalled $48,400.

Each table requires 1.5 hours of direct labour to manufacture. The production department incurs a cost of $20 per hour for direct-labour wages and fringe benefits.

Required:

1. Prepare the Sales Budget for the quarter ended June 30, 2020.
2. Prepare the Production Budget for the quarter ended June 30, 2020.
3. Prepare the Raw Material Purchase Budget for the quarter ended June 30, 2020.
4. Prepare the Direct Labour Budget for the quarter ended June 30, 2020.
5. Prepare a schedule showing the cash collections from sales for the quarter ended June 30, 2020.
6. Prepare a schedule showing the cash disbursements for the purchase of raw materials for the quarter ended June 30,2020.

We need all the budgets and schedules above, you must show a column for April, May and June as well as a column for the total of Quarter 2 of the year. Excel answer only.

Order the following goods from most elastic demand to most inelastic demand, with the good that has the most elastic demand on top and the good that has the most inelastic demand on the bottom.

Diary product

Yogurt

Danone yogurt

Danone stawberry yogurt

Question 2: As you have learned consumer expectations are a major driver of the short run path of the economy. Consumer spending account for about 70% of GDP and consumer confidence is a major factor in shifting Aggregate Demand. Describe how your expectations about the economy have changed as a result of COVID-19. How are you changing your spending patterns during this pandemic? How will you and your family spend any additional direct payments from the federal government if/when new legislation is passed? Do you expect consumer confidence and business expectations to improve in the months ahead? Which way will the AD curve shift during the fourth quarter (October through December)? Explain your reasoning.

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.

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:

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 31,800 units but sold 34,800 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.

Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.)

What is the company’s absorption costing net operating income (loss) for the quarter? (Round your intermediate calculations to 2 decimal places.)

Reconcile the variable and absorption costing net operating income (loss) figures.  (Losses and deductions should be entered as a negative.)

During the second quarter of operations, the company again produced 31,800 units but sold 34,800 units. 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 31,800 units but sold 34,800 units. What is the company’s absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places.)

During the second quarter of operations, the company again produced 31,800 units but sold 34,800 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.)

Question

Simple Life Food Ltd is a manufacturer of ‘ready to eat meal’ and sells to various food outlets for credit and cash basis. The management wants to prepare a master budget for the first ten months of the year ending 31 October 2019, and has compiled the following data:

1. The firm sells a single type of set menu at a price of $24 per set. The sales forecast (in sets) prepared by the marketing department for the ten months 30 October 2019 is as follows:

Number of set meals

January 12 000

February 12 000

March 12 500

April 13 000

May 14 000

June 14 000

July 15 500

August 16 000

September 18 000

October 24 000

2. 40% of the sales are collected in the month of sale, 40% are collected in the following month, and 20% are collected in the second month following the sale.

3. The beginning inventories on 1 April 2019 will be 4200 units of finished goods and no raw materials. The ending finished goods inventory should equal 20% of the sales requirements for the next 3 months, and the raw materials ending inventory should equal 40% of the next month’s production.

4. 80% of the food ingredients purchases (materials) are paid in the quarter of purchase and 20% are paid in the following quarter. The amount owing for purchases at 1 April 2019 is $82 000.

5. Variable selling expenses are 5% of sales. Administrative expenses are $52 500 per quarter, of which $8200 represents depreciation expense and $40000 is wages. Fixed selling expenses are $15 200 each quarter. All selling and administrative expenses are paid in the quarter in which they are incurred.

6. The production requirements are:   

Per unit Direct materials / 1 kg

Direct labour / 0.4 hour   

The direct materials are purchased for $4 a kilogram. The direct labour wage rate is $16 an hour. The factory overhead cost is $64 000 per month, and is paid in the month incurred (except for depreciation of $12 000).

7. The 1 April 2019 cash balance is expected to be $16 800.

Required:
A. Prepare a sales budget by month for the period February to June 2019.

B. Determine estimated cash collections from receivables for the second quarter of the financial year commencing 1 April 2019.

C. Calculate the number of units to be produced in the second quarter of the financial year commencing 1 April 2019.

D. Prepare a direct materials budget for the second quarter of the financial year commencing 1 April 2019.

E. Prepare a cash budget for the second quarter of the financial year commencing 1 April 2019including any necessary schedules.

F. Prepare a budgeted income statement for the second quarter of the financial year commencing 1 April 2019.

G. Briefly discuss (any 5) advantages and (any 3) disadvantages of preparing budgets forhospitality industry business.

H. Proper referencing

It is important to know the difference between shifts in the AD curve (right or left) and movements along this curve. Which of the following will move one down the AD curve (that is, moving down vertically)? There might be more than one.

1.interest rates fall and firms increase investment
2.firms produce more due to a higher price for produced goods

3.firms produce less due to a higher prices for produced goods

4.firms cut production due to a higher price of oil (which is turned into gasoline for cars, kerosene for airplanes, and diesel for trucks)

5.firms increase production due to a lower price of oil (which is turned into gasoline for cars, kerosene for airplanes, and diesel for trucks)

6.prices fall and total spending rises

7.prices rise and total spending falls

8. For the same P, there is more total spending. Thus, the AD curve shifts right.