Determine the accumulated value of quarterly deposits which grow by $18 each quarter for 12 years, with a first payment of $310 one quarter from now, if the deposits earn 1.3%/year compounded quarterly.

RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five months of the upcoming year are as follows:

January 3500

February 3,800

March 3,300

April 4800

May 5,000

Beginning finished goods inventory consisted of 750 units. The desired inventory of units at the end of each month in the upcoming year should equal 25% of the following month’s budgeted unit sales.

Each unit requires 4 yards of fabric. The company wants to have 20% of the fabric required for the next month’s expected production on hand at the end of each month. This inventory requirement was met at the end of the previous year. The fabric costs $0.20 per yard.

What is the expected dollar amount of raw material purchases for the first quarter of the upcoming year?

1. LIFO Perpetual Inventory

   The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows:

   Date		Transaction	Number of Units		Per Unit		Total
   Apr. 3		Inventory	25		$1,200		$30,000
   8		Purchase	75		1,240		93,000
   11		Sale	40		2,000		80,000
   30		Sale	30		2,000		60,000
   May 8		Purchase	60		1,260		75,600
   10		Sale	50		2,000		100,000
   19		Sale	20		2,000		40,000
   28		Purchase	80		1,260		100,800
   June 5		Sale	40		2,250		90,000
   16		Sale	25		2,250		56,250
   21		Purchase	35		1,264		44,240
   28		Sale	44		2,250		99,000

   Required:

   1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

   Dunne Co. Schedule of Cost of Goods Sold LIFO Method For the Three Months Ended June 30
   	Purchases			Cost of Goods Sold			Inventory
   Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
   Apr. 3								$	$
   Apr. 8		$	$
   Apr. 11					$	$
   Apr. 30
   May 8
   May 10
   May 19
   May 28
   June 5
   June 16
   June 21
   June 28
   June 30	Balances					$			$

   2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.

   Total sales	$
   Total cost of goods sold	$
   Gross profit	$

   3. Determine the ending inventory cost on June 30.
   $

   Feedback

   1. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the goods sold. LIFO means the last units purchased are assumed to be the first to be sold. Therefore after each sale, the remaining or ending inventory is made up of the first or earliest purchases. Think of your inventory in terms of "layers." The first sale comes from the most recent purchase layer. When deciding which layer to use for costing of each sale ask yourself: "Is there enough inventory left in the most recent purchase to cover the sale?" If not, the other units sold should be taken from the second most recent purchase layer, which then contains the most recent costs. Continue this process for each transaction. If you have done this problem correctly, the remaining units making up ending inventory will be costed at the April 3 beginning inventory and the May 28 unit purchase price.

   2. Total sales are obtained by taking the number of units sold times their sale prices for all sales and adding these amounts together. The total cost of goods sold can be obtained by adding the LIFO costs in the perpetual inventory record. Sales minus cost of goods sold equals gross profit.

   3. The ending inventory is what is left after subtracting the cost of goods sold from the goods available for sale. Multiply the units remaining after the last sale by their corresponding earliest layer cost to determine the LIFO cost of the ending inventory.

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Working with Numbers and Graphs Q9

Use the following table to answer the questions that follow.

Complete the following table by calculating GDP, NDP, national income, personal income, disposable income, and net exports.

If purchases of new capital goods are $90 billion, then purchases of new residential housing are equal to $_______ billion.

Exercise 8-6 Selling and Administrative Expense Budget [LO8-7]

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:

The company’s variable selling and administrative expense per unit is $2.00. Fixed selling and administrative expenses include advertising expenses of $14,000 per quarter, executive salaries of $41,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,400 will be paid in the second quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)

French Bread Chocolates developed the following quarterly sales forecasting model:

Sales = 8.50 + 0.150 TIME - 2.70 Q1 + 1.20 Q2 + 3.5 Q3

where TIME is time period. (time is zero in the fourth quarter of 2009, time is 1 in the first quarter of 2010 and 2 in the second quarter of 2010 etc.) and Q1, Q2, and Q3 are quarterly dummy variables.

Forecast French Broad Chocolate's sales for each quarter of 2022.

CONT 4125                                                                  BUDGET PROBLEM

Comp. Paradice manufactures a special calculator used in a science laboratory of an recognized university. Expected pattern of sales for the next year is presented as a follows:

Each calculator sells for $25. All sales are on account and Comp. Paradise’s experience with cash collections is that 60 percent of each quarter’s sales are collected during the same quarter as the sale, except during the last quarter. Due to the Christmas activities arrival, collections down to 45% during the last quarter of each year. The remaining percent of sales is collected in the quarter after the sale, except 2% will be transferred to bad debts. Comp. Sales in the fourth quarter of previous year are expected to be $100,000 (4,000 units).

Comp.   Paradise desires to have 10 percent of the following quarter’s sales needs in finished goods inventory at the end of each quarter. On December prior year, Comp. Paradise expects to have 200 units in inventory. The expected sales volume for the first quarter next year will be 7,300 units.

Each calculator requires two type of raw material. Comp. Paradise desires to have 10 percent of the next quarter’s raw material required at the end of each quarter. On December prior year, the company expects to have 480 types of ending raw material inventory.

The raw material price is $4.75 per type. The company buys its raw material on account and pays 70 percent of the resulting accounts payable during the quarter of the purchase. The remaining 30 percent is paid during the following quarter. The company needs trained employees in order to get a practical capacity. Each employee is capable to process 500 units on each quarter with a direct labor rate of $7.5 per hour. Total monthly hours required is 160 per employee. Standard manufacturing overhead rate was assigned based on 82% of total direct labor cost.

Required: Prepare the following budget schedules for the current year. Include a column for each quarter and for the year.

1.       Sales budget in units and dollars.

2.       Production budget

3.       Direct material budget

4.       Direct labor budget

5.       Manufacturing Overhead budget

6.       Cash receipt budget

7.       Cash disbursements budget for raw material purchases.

a) In 2008, inflation was unusually high (meaning prices increased more than usual), GDP growth fell, and unemployment increased. Use the aggregate supply and demand model to suggest what might have happened at the beginning of the great recession.

b) In 2009, the US experienced deflation (meaning prices were falling), and GDP actually decreased. Unemployment increased to 10%. Use the aggregate supply and demand model to suggest what might have happened during the second half of the great recession.

c)Assume the economy is in equilibrium. Explain exactly, i.e., one step at a time, why the price level and real GDP will change if the price of oil (a major input in many businesses) increases. Describe the process from the beginning to where the economy reaches a new equilibrium.

d)An economy is currently producing at an equilibrium level of real GDP of $14 trillion. What will happen if government spending (alone, with no other changes) decreases by $100 billion? Will real GDP increase or decrease? Explain why it will change by $100 billion, by less, or by more.

e)Explain why rising prices reduce the spending multiplier effect of an increase in aggregate demand.

1.Lynn and Jeremy go on a camping trip every year to celebrate their anniversary. Their purchases this year include 2 steaks at $8 per steak, 1 roll of tissue paper at $1.25 per roll, a pack of vegetables at $2 per pack, and 5 gallons of gas at $3.15 per gallon. What is the cost of Lynn and Jeremy's basket of camping goods?

2.Productivity growth is also closely linked to ____________________.

Select all that apply:

• trade balance

• GDP per capita

• the average level of wages

• the current minimum wage

3.Which of the following best describes the peak of a business cycle?

Select the correct answer below:

the point where real GDP stops falling and begins rising

the calculation of exports minus imports

the lowest point of a recession, before a recovery begins

the highest point in an economy that comes just before real GDP begins falling and recession begins