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.

I keep getting my answers wrong... Please explain and bold all answers. Thanks

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. (Round "Unit cost of raw materials" answers to 2 decimal places.)

Answer is complete but not entirely correct.

Woodplex Ltd is a medium-size company that specializes in making a hand-made furniture cover. The company has been relatively successful over the years due to its good quality product and the good relations it has with its suppliers of materials and staff on the production line. Woodplex Ltd’s management, however, anticipates the market becoming more competitive in the near future, not least due to the weak UK economy and forecasts of slow growth. They are now seeking a way to lower the price of their product. A cheaper substitute material has been identified for the furniture cover but securing this material would involve signing a long-term contract with a new supplier. Woodplex Ltd’s management believe that it would be prudent to delay signing a long-term contract until an analysis can be made of how switching to a new material (and supplier) would affect the production process and operating profit. As a result of the above concern, the prospective supplier was therefore asked to supply Woodplex Ltd the materials they needed for production during the most recent quarter.

The managing director of Woodplex Ltd has now asked for your help on this matter. You have been provided with the following standard cost data (i.e., based on the old supplier) and budgets.

[CONTINUED]

Additional information:

• Actual direct material usage totalled 57,200 metres. All materials used during the quarter were sourced from the prospective supplier.
• A total of 132,000 direct labour hours were worked during the quarter.
• During the quarter, a promotional price for the furniture cover was introduced following the recommendation of Woodplex Ltd’s marketing director. The marketing director argued that this would not only boost sales but also provide an opportunity to evaluate how customers would respond to their product when the substitute material is used.
• Woodplex Ltd uses a standard variable costing system for internal reporting purposes.

Required:

1. Prepare a flexed budget that takes into account the change in output and sales during the quarter, based on the material from the new supplier.

2. Calculate for the quarter:
   1. Sales margin price and volume variances
   2. Direct material quantity and price variances
   3. Direct labour efficiency and rate variances
   4. Variable overhead efficiency and spending variances
   5. Fixed overheads spending variance

3. Drawing on your answers in (a) and (b) and any other financial or non-financial consideration you think would be relevant in this case, advise Woodplex Ltd whether or not it should sign a long-term contract with the new supplier.

Elena runs the 100m dash in 10.4s. If she does this by spending the first 3s of the race accelerating and then maintaining her top speed (constant velocity) for the rest of the race: What acceleration did she experience? What was her top speed?

ACCOUNTING: PREPARE THE BUDGET PROCESS USING EXCEL

a) Prepare a sales budget in units and dollars by quarter and for the year.

b) Prepare a production budget in units by quarter and for the year.

c) Prepare a materials purchases budget in feet and dollars by quarter and for the year.

d) Prepare a direct labor budget in hours and dollars by quarter and for the year.

e) Prepare an overhead budget by quarter and for the year. Show depreciation separately from other fixed overhead.

f) Prepare a selling and administrative expense budget by quarter and for the year. Show depreciation separately from other fixed selling and administrative costs.

EXCEL- must be done in Excel and should exhibit appropriate use of the software.   All of the required budgets should appear on a single spreadsheet labeled “Operating Budgets.” All parts other than per unit amounts should be in whole numbers--ie. no ".00"   Either do not use "$" or use them sparingly and only where appropriate.

DATA:

BUDGET PROJECT DATA

Crossley is the manufacturing subsidiary of a company that is a distributor of high end office furniture. Crossley was formed two years ago when the company decided to begin making some of the furniture it sells. Crossley currently makes a line of desks that has been quite successful since its introduction, and there are plans to introduce new products as the company grows. Crossley uses variable standard costing for budgeting and performance reporting. Standard cost per desk is as follows:

                                                                                                         Cost/Unit

                        Direct materials          10 ft.   @ $5.00/ft.            $ 50.00

                        Direct labor                   6 hrs. @ $9.00/hr. 54.00

                        Variable overhead        6 hrs. @ $6.00/hr. 36.00

                                    Total budgeted cost/unit $140.00

Annual fixed overhead totals $2,521,000, which includes $425,000 of depreciation budgeted at $90,000 per quarter for the first two quarters and $122,500 per quarter for the last two quarters to reflect depreciation on new production equipment that will be acquired at the start of the third quarter. The remainder of the fixed overhead is incurred uniformly throughout the year.

Sales of this product have been increasing at an average rate of 20% per year; 2017 sales totaled 170,000 units, with 20% of sales occurring in the first quarter, 30% in the second quarter, 35% in the third quarter and 15% in the fourth quarter. Strauss expects that division sales will continue to increase at the same rate over the next 3 years and will follow the same quarterly pattern. Crossley prices this product at 50% over variable product cost.

The manufacturing division tries to maintain an inventory of finished goods equal to 10% of the next quarter’s sales, and an inventory of materials equal to 15% of the next quarter’s production requirements. The company expects to have 3,440 desks and 55,000 feet of materials in inventory at 1/1/18.

The company budgets quarterly selling expenses at $925,000 plus a 3.5% commission on sales, and administrative expenses at $1,100,000 per quarter. Quarterly fixed selling expense includes $75,000 of depreciation, and quarterly administrative expenses include $120,000 of depreciation.

Esperado Furnishings are retailers who purchase and sell household furnishings, including table
lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any
shortage or excess inventory. The business began the last quarter of 2018 with merchandise
inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.
The following transactions, relating to the “Italia” brand were completed during the quarter:
October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.
October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair
October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity
discount.
November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings
which yielded total sales revenue of $589,750.
November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased
on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in
cash on each pair of lamps to have the inventory shipped from the vendor’s
warehouse to Esperado’s showroom.
November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair.
November 30 An actual count of inventory was carried out which revealed that there were 15
pairs of the “Italia” brand in the warehouse.
December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a
total cost of $474,500.
December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as
they were not of the brand ordered.
December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton
Furnishings) at a selling price of $26,550 per pair.
All purchases were on account and received on the dates stated.
Required:
i) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first
out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the
total amount to be assigned to cost of goods sold for the period.
ii) Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250
and$75,435 respectively, prepare an income statement for Esperado Furnishings for the
period, to determine the net profit for the quarter, assuming the perpetual inventory
system.
iii) You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the
journal entries necessary to record the transactions on November 12 and November 27,
assuming the business uses a: - Perpetual inventory system
- Periodic inventory system
iv) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine
the value of ending inventory and cost of goods sold assuming the business used the periodic
system and the LIFO method?

Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter:

All purchases were on account and received on the dates stated. Required:

1. Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.

2. Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.

3. You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a:

- Perpetual inventory system

- Periodic inventory system

4. Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter:

October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.

October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair

October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount.

November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750.

November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom.

November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair.

November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse.

December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500.

December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered.

December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. All purchases were on account and received on the dates stated. Required:

A) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.

B) Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.

c) You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a: - Perpetual inventory system - Periodic inventory system

D) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

​

a. Complete Part 2 of Form 940 based on the following information:

Total payroll for the year                                                   $913,590

Payroll to employees in excess of $7,000                         $421,930

Employer contributions into employees' 401(k) plans        $23,710

​

Source: Internal Revenue Service

​

b. If the employer is located in California, which has a credit reduction of 1.5%,

     what would be the amount of the credit reduction?

​

c. Complete Part 5 of Form 940 for the California employer given the breakdown of FUTA taxable

    wages for the year to be:

​

First quarter      $237,000

Second quarter                  $168,000

Third quarter   $54,000

Fourth quarter                   $8,950

   Yearly total      $467,950

Assume that in the first quarter of 2020, real GDP and potential GDP were both $20 trillion and the unemployment rate was 3.5%. Assume that potential GDP is still $20 trillion in the second of 2020 but that actual real GDP is $19 trillion.

a. What is the annualized growth rate of real GDP between the first and second quarters?

b. What is the output gap in the second quarter of 2020?

c.   According to Okun’s law, what will be the unemployment rate in the second quarter of 2020?

d. Assume that in the second quarter consumption is equal $13 trillion, net exports are equal to -$0.5 trillion, and government purchases and planned investment are both equal to $3 trillion. What is the amount of inventory investment?