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ACC202 UNIT 2- Copper Manufacturing has prepared the following monthly flexible




Question;(1);Copper;Manufacturing has prepared the following monthly flexible manufacturing;overhead budget for its Mixing Department;COPPER MANUFACTURING;Monthly Flexible Manufacturing Overhead Budget;Mixing Department;Activity level;Direct;labor hours 3,000 4,000;Variable costs;Indirect;materials $ 3,000 $ 4,000;Indirect;labor 15,000 20,000;Factory;supplies 4,500 6,000;Total;variable 22,500 30,000;Fixed costs;Depreciation 20,000 20,000;Supervision 12,000 12,000;Property;taxes 15,000 15,000;Total;fixed 47,000 47,000;Total costs $69,500 $77,000;Instructions;Prepare a;flexible budget at the 5,000 direct labor hours of activity.;(2) Minor Landscaping Company is preparing;its budget for the first quarter of 2013. The next step in the budgeting;process is to prepare a cash receipts schedule and a cash payments schedule. To;that end the following information has been collected.;Clients usually pay 60% of their fee in the month;that service is provided, 30% the month after, and 10% the second month after;receiving service.;Actual service revenue for 2012 and expected;service revenues for 2013 are: November 2012, $120,000, December 2012;$110,000, January 2013, $140,000, February 2013, $160,000, March 2013;$170,000.;Purchases on landscaping supplies (direct;materials) are paid 40% in the month of purchase and 60% the following month.;Actual purchases for 2012 and expected purchases for 2013 are: December 2012;$21,000, January 2013, $20,000, February 2013, $22,000, March 2013, $27,000.;Instructions;(a) Prepare the following schedules for each month;in the first quarter of 2013 and for the quarter in total;(1) Expected;collections from clients.;(2) Expected;payments for landscaping supplies.;(b) Determine the following balances at March 31;2013;(1) Accounts;receivable.;(2) Accounts;payable.;(3);Roland;Company operates a small factory in which it manufactures two products: A and;B. Production and sales result for last year were as follow;A;B;Units;sold 8,000 16,000;Selling;price per unit 65 52;Variable;costs per unit 35 30;Fixed;costs per unit 15 15;For purposes of simplicity, the firm;allocates total fixed costs over the total number of units of A and B produced;and sold.;The research department has developed;a new product (C) as a replacement for product B. Market studies show that;Roland Company could sell 11,000 units of C next year at a price of $80, the;variable costs per unit of C are $39. The introduction of product C will lead;to a 10% increase in demand for product A and discontinuation of product B. If;the company does not introduce the new product, it expects next year's result;to be the same as last year's.;Instructions;Should Roland Company introduce;product C next year? Explain why or why not. Show calculations to support your;decision.;(4);Cutting;Edge Corp. produces sporting equipment. In 2012, the first year of operations;Cutting Edge produced 25,000 units and sold 20,000 units. In 2013, the;production and sales results were exactly reversed. In each year, selling price;was $100, variable manufacturing costs were $40 per unit, variable selling;expenses were $8 per unit, fixed manufacturing costs were $540,000, and fixed;administrative expenses were $200,000.;Instructions;(a) Compute the net income under variable costing;for each year.;(b) Compute the net income under absorption;costing for each year.;(c) Reconcile the differences each year in income;from operations under the two costing approaches.;Werth & Garza;Manufacturing's sales slumped badly in 2013 due to so many people purchasing;gifts online. The company's income statement showed the following results from;selling 500,000 units of product: net sales $2,125,000, total costs and;expenses $2,500,000, and net loss $375,000. Costs and expenses consisted of the;following;Total Variable Fixed;Cost of;goods sold $2,000,000 $1,300,000 $700,000;Selling;expenses 200,000 50,000 150,000;Administrative;expenses 300,000 150,000 150,000;$2,500,000 $1,500,000 $1,000,000;Management is considering the following alternative;for 2013;Purchase;new automated equipment that will change the proportion between variable and;fixed expenses sold to 45% variable and 55% fixed.;Instructions;(a) Compute the break-even point in dollars for;2013.;(b) Compute the break-even point in dollars under;the alternative course of action.


Paper#39452 | Written in 18-Jul-2015

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