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Maga Company, which has only one product, has provided the following data concerning its most recent month of operations: |
| Selling price | $ | 193 |
| Units in beginning inventory | 0 | |
| Units produced | 3,090 | |
| Units sold | 2,910 | |
| Units in ending inventory | 180 | |
| Variable cost per unit: | ||
| Direct materials | $ | 53 |
| Direct labor | $ | 59 |
| Variable manufacturing overhead | $ | 15 |
| Variable selling and administrative | $ | 13 |
| Fixed costs: | ||
| Fixed manufacturing overhead | $ | 89,610 |
| Fixed selling and administrative | $ | 8,730 |
| Required: |
| a. |
What is the unit product cost for the month under variable costing? (Do not round intermediate calculations. Omit the "$" sign in your response.) |
| Cost per unit | |
| Variable costing | $ |
| b. |
What is the unit product cost for the month under absorption costing? (Omit the "$" sign in your response.) |
| Cost per unit | |
| Absorption costing | $ |
| c. |
Prepare a contribution format income statement for the month using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) |
| Variable Costing Income Statement | ||
| (Click to select) Variable selling and administrative expenses Selling and administrative expenses Manufacturing overhead Variable cost of goods sold Contribution margin Net operating income (loss) Sales | $ | |
| Variable expenses: | ||
| (Click to select) Variable selling and administrative expenses Net operating income Variable cost of goods sold Contribution margin Direct labor Sales Direct materials | $ | |
| (Click to select) Direct materials Contribution margin Variable cost of goods sold Sales Direct labor Net operating income Variable selling and administrative expenses | ||
| (Click to select) Selling and administrative expenses Net operating income (loss) Variable selling and administrative expenses Variable cost of goods sold Sales Manufacturing overhead Contribution margin | ||
| Fixed expenses: | ||
| (Click to select) Contribution margin Fixed selling and administrative expenses Fixed manufacturing overhead Variable selling and administrative expenses Net operating income Sales Variable cost of goods sold | ||
| (Click to select) Variable cost of goods sold Variable selling and administrative expenses Fixed selling and administrative expenses Contribution margin Net operating income Fixed manufacturing overhead Sales | ||
| (Click to select) Selling and administrative expenses Variable selling and administrative expenses Sales Variable cost of goods sold Manufacturing overhead Contribution margin Net operating income (loss) | $ | |
| d. |
Prepare an income statement for the month using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) |
| Absorption Costing Income Statement | |||
| (Click to select) Cost of goods sold Variable selling and administrative expenses Gross margin Fixed selling and administrative expenses Net operating income (loss) Sales | $ | ||
| (Click to select) Sales Net operating income (loss) Gross margin Variable selling and administrative expenses Fixed selling and administrative expenses Cost of goods sold | |||
| (Click to select) Net operating income (loss) Variable selling and administrative expenses Sales Fixed selling and administrative expenses Gross margin Cost of goods sold | |||
| Operating expenses: | |||
| (Click to select) Net operating income (loss) Cost of goods sold Gross margin Sales Variable selling and administrative expenses Fixed selling and administrative expenses | $ | ||
| (Click to select) Variable selling and administrative expenses Sales Net operating income (loss) Gross margin Cost of goods sold Fixed selling and administrative expenses | |||
| (Click to select) Net operating income (loss) Cost of goods sold Fixed selling and administrative expenses Gross margin Sales Variable selling and administrative expenses | $ | ||
| e. |
Reconcile the variable costing and absorption costing net operating incomes for the month. (Omit the "$" sign in your response.) |
| Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes | |
| Variable costing net operating income | $ |
| (Click to select) Add Deduct : (Click to select) Fixed manufacturing overhead costs released from inventory under absorption costing Fixed manufacturing overhead costs deferred in inventory under absorption costing | |
| Absorption costing net operating income | $ |
In: Finance
Managerical Accounting Chapter 8 problem 30C cash budget, how was the merchandise purchases calculated in step 2 of the problem? The orignial question states "A cash budget. Show the budget by month and in total. determine any borrowing that would be needed to maintain the minimum cash balance of $50,000. The answers given was 258,000 318,000, 244,000 and 820,000. I am asking how were figures calculated? This is my first time posting a question please advise what is incomplete about my question and how to remedy it so that I can have a better understanding of how the figures were calculated. Thank you.
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same price—$10 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):
| January (actual) | 20,000 | June (budget) | 50,000 |
| February (actual) | 26,000 | July (budget) | 30,000 |
| March (actual) | 40,000 | August (budget) | 28,000 |
| April (budget) | 65,000 | September (budget) | 25,000 |
| May (budget) | 100,000 |
The concentration of sales before and during May is due to Mother’s Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.
Suppliers are paid $4 for a pair of earrings. One-half of a month’s purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month’s sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.
Monthly operating expenses for the company are given below:
|
Variable: |
|
|
Sales commissions |
4% of sales |
|
Fixed: |
|
|
Advertising |
$200,000 |
|
Rent |
$18,000 |
|
Salaries |
$106,000 |
|
Utilities |
$7,000 |
|
Insurance |
$3,000 |
|
Depreciation |
$14,000 |
Insurance is paid on an annual basis, in November of each year.
The company plans to purchase $16,000 in new equipment during May and $40,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $15,000 each quarter, payable in the first month of the following quarter.
The company’s balance sheet as of March 31 is given below:
| Assets | |
| Cash | $ 74,000 |
|
Accounts receivable
($26,000 February sales; |
346,000 |
| Inventory | 104,000 |
| Prepaid insurance | 21,000 |
| Property and equipment (net) | 950,000 |
| Total assets | $1,495,000 |
| Liabilities and Stockholders’ Equity | |
| Accounts payable | $ 100,000 |
| Dividends payable | 15,000 |
| Common stock | 800,000 |
| Retained earnings | 580,000 |
| Total liabilities and stockholders’ equity | $1,495,000 |
The company maintains a minimum cash balance of $50,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.
The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $50,000 in cash.
Required:
Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:
A sales budget, by month and in total.
A schedule of expected cash collections, by month and in total.
A merchandise purchases budget in units and in dollars. Show the budget by month and in total.
A schedule of expected cash disbursements for merchandise purchases, by month and in total.
A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000.
A budgeted income statement for the three-month period ending June 30. Use the contribution approach.
A budgeted balance sheet as of June 30.
In: Accounting
A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and layoff costs will be
In: Other
You buy 100 shares of Apple common stock at a price of $55.75. One quarter later, you collect a dividend of $1.51 per share and sell your stock for $66.38 per share. What is the rate of return on your investment? (You may ignore commissions and taxes.) Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol. If the return is negative, then include a minus sign.
In: Finance
Company X's current return on equity (ROE) is 17.06%. It pays out one-quarter of earnings as cash dividends, i.e. its payout ratio is 29.1%. Current book value per share is $38.71. The company has 5.68 million shares outstanding. Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces the ROE to 11.02% and the company changes the payout ratio to 71.52%. The company does not plan to issue or retire shares. The cost of capital is 10.77%.
(a) What is the price of stock X?
(b) How much of stock X's value is attributable to growth opportunities (PVGO)? Note that here we cannot use P=(EPS/r)+PVGO because ROE changes over time. PVGO is defined by the difference between the price of stock and the value of share if there is no growth for every period.
In: Finance
|
August |
September |
October |
|
|
Cash Sales |
$40,000 |
$60,000 |
$100,000 |
|
Credit Sales |
300,000 |
340,000 |
440,000 |
|
Total |
$340,000 |
$400,000 |
$540,000 |
Experience reveals that 6% of credit sales will be uncollectible. Of the sales that are collectable 50% are collected in the month of the sale; 35% are collected in the month following the sale, and the remainder are collected in the next following month. (Credit sales were $200,000 in July).
Inventory purchases each month are 100% of the cost of the following month’s projected sales. Occipital’s gross profit rate is 50%, that is a 100% markup on cost. All merchandise purchases are made on credit and paid for in the month following the purchase. Administrative costs are expected to be $150,000 per month.
The cash balance on September 1 is expected to be $20m,000. The minimum cash balance is $10,000.
Required:
-Prepare the cash budget for September and October.
-Why are budgets important for business organizations?
In: Accounting
Volkswagen saw a 95% drop in its fourth quarter profits in 2004 after an unexpected surge in the value of the Euro left the company with losses of $1.5 billion.
1. What is hedging? Explain how Volkswagen's failure to fully protect itself against foreign exchange fluctuations had a negative effect on the company? What can Volkswagen and other companies learn from this experience?
2. Why was Volkswagen so vulnerable to the change in the value of the Euro against the US Dollar relative to the US Dollar?
3. In 2015 and 2016 strong dollar affected several US companies. Please see the one of the examples in the following links (2015 and 2016) where the strong dollar hurt the company. What can this company do to protect itself from exchange rate fluctuations? Since the beginning of 2017, the dollar has been weakening. What does that mean for US companies? How will the weaker dollar affect US businesses?
only need to anwser to question 3
In: Economics
According to the Normal model N(0.056,0.031) describing mutual fund returns in the 1st quarter of 2013, determine what percentage of this group of funds you would expect to have the following returns. Complete parts(a) through(d) below. a) Over 6.8% b) Between 0% and 7.6% c) More than 1% d) Less than 0% Need to find the expected percentage of returns for each of the above.
In: Statistics and Probability
According to the Normal model N(0.059 ,0.028 ) describing mutual fund returns in the 1st quarter of 2013, determine what percentage of this group of funds you would expect to have the following returns. Complete parts (a) through (d) below. a) Over 6.8%? b) Between 0% and 7.6%? c) More than 1%? d) Less than 0%?
In: Statistics and Probability
MC0102: A student has a nickel, dime, quarter, and half-dollar (yes - let's just pretend) in her pocket. If she pulls 3 coins out of her pocket without replacement, what is the sample space of simple events? Assume that the order that she pulls out the coins does not matter (so pulling N, D, Q is the same as pulling Q, D, N, etc.). N=Nickel, D=Dime, Q=Quarter, and H=Half-dollar.
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a. |
12 outcomes {N, D, Q, H, N, D, Q, H, N, D, Q, H} |
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b. |
4 outcomes: {N, D, Q, H} |
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c. |
3 outcomes: {Coin1, Coin2, Coin3} |
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d. |
4 outcomes: {NDQ, NDH, NQH, DQH} |
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e. |
None of these MC0302: Which of the following are true about independent events A and B? I: Events A and B cannot both occur. II: Whether event A occurs has no impact on the probability of event B, and vice versa. III: P(A and B) = P(A) * P(B)
MC0402: Suppose there are two events, A and B. The probability of event A is P(A) = 0.3. The probability of event B is P(B) = 0.4. The probability of event A and B (both occurring) is P(A and B) = 0. Events A and B are:
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In: Statistics and Probability