Please answer the question which number 5 to 8
| [The following information applies to the questions displayed below.] |
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Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its unit costs for each product at this level of activity are given below: |
| Alpha | Beta | |||||||
| Direct materials | $ | 40 | $ | 15 | ||||
| Direct labor | 34 | 28 | ||||||
| Variable manufacturing overhead | 22 | 20 | ||||||
| Traceable fixed manufacturing overhead | 30 | 33 | ||||||
| Variable selling expenses | 27 | 23 | ||||||
| Common fixed expenses | 30 | 25 | ||||||
| Total cost per unit | $ | 183 | $ | 144 | ||||
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The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. |
| 5. |
Assume that Cane expects to produce and sell 110,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 25,000 additional Alphas for a price of $140 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 12,000 units. |
| a. |
Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.) |
| b. | Based on your calculations above should the special order be accepted? | ||||
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Required information
| 6. |
Assume that Cane normally produces and sells 105,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease? |
Required information
| 8. |
Assume that Cane normally produces and sells 75,000 Betas and 95,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 15,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease? |
In: Accounting
Nutt’s Nut Company has 500 pounds of peanuts, 100 pounds of pecans, and 50 pounds of cashews on hand. they package three types of 5-pound cans of nuts: Can I contains 3 pounds of peanuts, 1 pound of pecans, and 1 pound of cashews; Can II contains 4 pounds of peanuts, 1/2 pound of pecans, and 1/2 pound of cashews; and Can III contains 5 pounds of peanuts. The selling price is $28 for Can I, $24 for Can II, and $21 for can III. How many cans of each kind should be made to maximize revenue? Set up an LP problem. Do not solve.
In: Math
Rubbermaid produces and sells plastic storage sheds. Its current sales are $500,000. The company's accountant provided the following cost information:
|
Manufacturing costs |
$ |
100,000 |
+ |
40 |
% |
of sales |
|
Selling costs |
$ |
30,000 |
+ |
10 |
% |
of sales |
|
Administrative costs |
$ |
45,000 |
+ |
10 |
% |
of sales |
Required:
1) Compute the product's contribution margin ratio.
2) Compute the company's current net income.
3) Compute the product's break-even point in dollars.
4) Compute the amount of revenue necessary to earn $60,000 in profit.
5) Compute the company's current margin of safety ratio.
6) Should the company accept a proposal that increases sales by 20% and total fixed costs by 25%?
In: Accounting
| PROBLEM 1: | |||||||
| Felix Company wants to forecast its cash budget for the next 3 months. | |||||||
| * Estimated sales revenues are: | |||||||
| Month | Revenue | ||||||
| January | $ 200,000 | ||||||
| February | $ 150,000 | ||||||
| March | $ 300,000 | ||||||
| April | $ 400,000 | ||||||
| All sales are on credit and are estimated to be paid as follows: | |||||||
| Month of Sale | 60% | ||||||
| Month after sale | 40% | ||||||
| 100% | |||||||
| * Cost of goods sold as a percentage of sales is | 75% | ||||||
| * Payments for merchandise sold are made in the month following the month sale. | |||||||
| * Operating expenses total $50,000 per month and are to be paid in the month they are incurred. | |||||||
| * The cash balance estimated on February 1 is $100,000. | |||||||
| QUESTION: Prepare monthly cash budgets for February, March and April in Excel. | |||||||
In: Accounting
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,072,000 $ 2,738,000 $ 2,849,000 Estimated costs to complete as of year-end 5,328,000 2,590,000 0 Billings during the year 2,160,000 2,650,000 5,190,000 Cash collections during the year 1,880,000 2,700,000 5,420,000 Westgate recognizes revenue over time according to percentage of completion. 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. (Do not round intermediate calculations.)
In: Accounting
In 2021, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2023. Information related to
the contract is as follows:
| 2021 | 2022 | 2023 | |||||||
| Cost incurred during the year | $ | 2,490,000 | $ | 3,984,000 | $ | 2,008,600 | |||
| Estimated costs to complete as of year-end | 5,810,000 | 1,826,000 | 0 | ||||||
| Billings during the year | 2,030,000 | 4,444,000 | 3,526,000 | ||||||
| Cash collections during the year | 1,815,000 | 3,900,000 | 4,285,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
3. Complete the information required below to
prepare a partial balance sheet for 2021 and 2022 showing any items
related to the contract. (Do not round intermediate
calculations.)
In: Accounting
In 2018, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2020. Information related to
the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,580,000 | $ | 4,042,000 | $ | 2,175,800 | |||
| Estimated costs to complete as of year-end | 6,020,000 | 1,978,000 | 0 | ||||||
| Billings during the year | 2,060,000 | 4,562,000 | 3,378,000 | ||||||
| Cash collections during the year | 1,830,000 | 4,200,000 | 3,970,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
rev: 09_15_2017_QC_CS-99734
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
In: Accounting
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,542,000 | $ | 3,772,000 | $ | 2,074,600 | |||
| Estimated costs to complete as of year-end | 5,658,000 | 1,886,000 | 0 | ||||||
| Billings during the year | 2,020,000 | 4,294,000 | 3,686,000 | ||||||
| Cash collections during the year | 1,810,000 | 3,800,000 | 4,390,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
rev: 09_15_2017_QC_CS-99734
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
In: Accounting
In: Accounting