Make a merchandise purchases budget

Assignment Help Managerial Accounting

Reference no: EM132778634

Question 1 - On March 31, Streuling Enterprises, a merchandising firm, had an inventory of 38,000 units, and it had accounts receivable totaling $85,000. Sales, in units, have been budgeted as follows for the next four months:

April 60,000

May 75,000

June 90,000

July 81,000

Streuling's board of directors has established a policy to commence in April that the inventory at the end of each month should contain 40% of the units required for the following month's budgeted sales.

The selling price is $2 per unit. One-third of sales are paid for by customers in the month of the sale; the balance is collected in the following month.

MUST SHOW ALL CALCULATIONS

a) Make a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.

Question 2 - Monson Company is considering three investment opportunities with cash flows as described below: (Ignore income taxes in this problem.)

Project A: Cash investment now $15,000

Cash inflow at the end of 5 years $21,000

Cash inflow at the end of 8 years $21,000

Project B: Cash investment now $11,000

Cash outflow for 5 years $3,000

Addition cash inflow at the end of 5 years $21,000

MUST SHOW ALL CALCULATIONS

a. Calculate the net present value for project A. Monson Company uses a 12% discount rate.

b. Calculate the net present value for project B. Monson Company uses a 12% discount rate.

c. Which project should the company accept and why?

Question 3 - The EG Company produces and sells one product: a microwave oven. The following data refer to the year just completed:

Beginning inventory $0

Units produced 25,000

Units sold 20,000

Sales price per unit $400

Selling and administrative expenses:

Variable per unit $15

Fixed (total) $275,000

Manufacturing costs:

Direct materials cost per unit $200

Direct labour cost per unit $50

Variable overhead cost per unit $30

Fixed overhead (total) $300,000

Assume that direct labour is a variable cost.

SHOW ALL CALCULATIONS

a) What is the unit product cost for the month under absorption costing?

b. What is the unit product cost for the month under variable costing?

c. Explain the difference between variable and absorption costing.

c) Make an income statement for the month using the absorption costing method.

QUESTION 4 - Part A - The following materials standards have been established for a particular product:

Standard quantity per unit of output 9.4 kilograms

Standard price $16.90 per kilograms

The following data pertain to operations concerning the product for the last month:

Actual materials purchased 7,300 kilograms

Actual cost of materials purchased $116,435

Actual materials used in production 7,100 kilograms

Actual output 740 units

MUST SHOW ALL CALCULATIONS

a) What is the materials price variance for the month?

b) What is the materials quantity variance for the month?

Part B - The following labour standards have been established for a particular product:

Standard labour hours per unit of output 2.8 hours

Standard labour rate $11.50 per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked 6,900 hours

Actual total labour cost $80,385

Actual output 2,300 units

Required: MUST SHOW ALL CALCULATIONS

a) What was the labour rate variance for the month?

b) What was the labour efficiency variance for the month?

Reference no: EM132778634

Questions Cloud

Original intent of fourth amendment : Do you believe that the original intent of the Fourth Amendment was to encompass searches of students in public schools?

How should Jay plc account for this transaction : How should Jay plc account for this transaction? Provide the rationale for your answer and specify the nature of risks that Jay retains or transfers to Kima

What is the regular selling price : Canadian Tire paid $143 for a humidifier. Expenses are 16% of cost and the profit is 25% of cost. What is the regular selling price

Difference in ancient and modern conceptions of liberty : According to Benjamin Constant, there is a striking difference between ancient and modern conceptions of liberty.

Make a merchandise purchases budget : Make a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June

BPCC Police Community : Discuss how technology has become an indispensable tool for law enforcement - especially in the terms of problem-oriented policing approaches.

Herzberg motivation-hygiene theory : As a police chief using Herzberg's Motivation-Hygiene Theory, what types of motivators would you use to improve officer's productivity?

Criminal justice and evidence-based policing : As it pertains to criminal justice, evidence-based policing and its reliance on scientific research is relevant to all aspects of the system.

Recreation should be right or privilege : Within constitutional considerations, an important issue to resolve for sport and recreation concerns whether participation is a right or a privilege.

User Account

All Pages