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1)Longiotti Corporation produces and sells a single product. Data concerning that product appear ...
$ 15.00

1)Longiotti Corporation produces and sells a single product. Data concerning that product appear below.

Selling price per unit

$375.00

Variable expense per unit

$144.00

Fixed expense per month

$1,686,300



Required:

Determine the monthly breakeven in units or dollar sales

 

 

 

 

2) Loxham Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below.

Work in process, beginning:

 

 

 

 

 

  Units in beginning work in process inventory

400

  Materials costs

$6,900

  Conversion costs

$2,500

  Percent complete for materials

80%

  Percent complete for conversion

15%

  Units started into production during the month

6,000

  Units transferred to the next department during the month

5,400

  Materials costs added during the month

$112,500

  Conversion costs added during the month

$210,300

 

 

 

 

Ending work in process:

 

  Units in ending work-in-process inventory

1,000

  Percentage complete for materials

80%

  Percentage complete for conversion

30%


Required: Calculate the equivalent units for conversion for the month in the first processing department.

 

 

 

 

 

 

 

 

 

 

3)Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below.

Units in beginning inventory

0

Units produced

9,000

Units sold

7,000

Sales

$100,000


Less cost of goods sold:

Beginning inventory

0

Add cost of goods manufactured

54,000

Goods available for sale

54,000

Less ending inventory

12,000

Cost of goods sold

42,000

Gross margin

58,000

Less selling and admin. expenses

28,000

Net operating income

$30,000



Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead totals $18,000 for the year. The fixed manufacturing overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.

Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

 

 

 

 

 

 

 

 

4) Ignore income taxes in this problem.) Axillar Beauty Products Corporation is considering the production of a new conditioning shampoo that will require the purchase of new mixing machinery. The machinery will cost $375,000, is expected to have a useful life of 10 years, and is expected to have a salvage value of $50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul at the end of Year 6. A $40,000 increase in working capital will be needed for this investment project. The working capital will be released at the end of the 10 years. The new shampoo is expected to generate net cash inflows of $85,000 per year for each of the 10 years. Axillar's discount rate is 16%.

Required:
Part A: What is the net present value of this investment opportunity?
Part B: Based on your answer to (a) above, should Axillar go ahead with the new conditioning shampoo?

 

 

 

 

5)(TCO F) Matuseski Corporation is preparing its cash budget for October. The budgeted beginning cash balance is $54,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $99,000. The desired ending cash balance is $100,000. The company can borrow up to $150,000 at any time from a local bank, with interest not due until the following month.

Required: Prepare the company's cash budget for October in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6(TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just-completed year.

Sales

1,300

Raw materials inventory, beginning

25

Raw materials inventory, ending

30

Purchases of raw materials

250

Direct labor

350

Manufacturing overhead

500

Administrative expenses

300

Selling expenses

250

Work in process inventory, beginning

150

Work in process inventory, ending

100

Finished goods inventory, beginning

80

Finished goods inventory, ending

110



Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated?

 

 

 

 

7)Matuseski Corporation is preparing its cash budget for October. The budgeted beginning cash balance is $54,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $99,000. The desired ending cash balance is $100,000. The company can borrow up to $150,000 at any time from a local bank, with interest not due until the following month.

Required: Prepare the company's cash budget for October in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance. (Points : 25)

 

 

 

 

 

 

 

8. (TCO F) NicSaybin Enterprises' accounting department collects all pertinent monthly operating data. Correct Answer: Correct Answer: Selected data are presented below for the current month. From the data provided, please provide Saybin Enterprises' management with a flexible budget analysis to see how costs were controlled.

 

 

Actual Costs Incurred

Static Budget

Activity level (in units)

755,000

746,500

 

 

 

Variable costs:

 

 

     Indirect materials

$328,997

$325,640

     Utilities

$174,332

$171,890

Fixed costs: 

 

 

     General and administrative

$237,985

$244,908

     Rent

$135,500

$135,000

 

 

(TCO H) Hanson, Inc. makes 10,000 units per year of a part called a prositron for use in one of its products. Data concerning the unit production costs of the prositron follow.
Direct materials                         $250
Direct labor                              125
Variable manufacturing OH            50
Fixed manufacturing OH              150
Total                                          $575
 

An outside supplier has offered to sell Hanson, Inc. all of the prositrons it requires. If Hanson, Inc. decided to discontinue making the prositrons, 20% of the above fixed manufacturing overhead costs could be avoided.

Required: Assume Hanson, Inc. has no alternative use for the facilities presently devoted to production of the prositrons. If the outside supplier offers to sell the prositrons for $425 each, should Hanson, Inc. accept the offer? Fully support your answer with appropriate calculations

 

 

 

 

 

 

 

 

9(TCO B) Escatel Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. Data for the most recently completed year appear below.

Estimates made at the beginning of the year

 

   

Estimated labor hours

25,000

 

Estimated variable manufacturing overhead

$7.10

  per labor hour

Estimated total fixed manufacturing overhead

$625,000

   

Actual labor hours for the year

   28,000

   



Required:

Compute the company's predetermined overhead rate for the recently completed year.

 

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