Question;(1) Copper Manufacturing has prepared the following monthly flexible manufacturingoverhead budget for its Mixing Department:COPPER MANUFACTURINGMonthly Flexible Manufacturing Overhead BudgetMixing DepartmentActivity levelDirect labor hoursVariable costsIndirect materialsIndirect laborFactory suppliesTotal variableFixed costsDepreciationSupervisionProperty taxesTotal fixedTotal costs3,0004,000$ 3,00015,0004,50022,500$ 4,00020,0006,00030,00020,00012,00015,00047,000$69,50020,00012,00015,00047,000$77,000InstructionsPrepare 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. Thenext step in the budgeting process is to prepare a cash receipts schedule and a cashpayments 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 purchaseand 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 thequarter 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 andB. Production and sales result for last year were as follow:Units soldSelling price per unitVariable costs per unitFixed costs per unitA8,000653515B16,000523015For purposes of simplicity, the firm allocates total fixed costs over the total number of units of Aand 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 notintroduce the new product, it expects next year's result to be the same as last year's.InstructionsShould Roland Company introduce product C next year? Explain why or why not. Showcalculations 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 andsales results were exactly reversed. In each year, selling price was $100, variablemanufacturing costs were $40 per unit, variable selling expenses were $8 per unit, fixedmanufacturing 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 costingapproaches.Werth & Garza Manufacturing's sales slumped badly in 2013 due to so many people purchasinggifts online. The company's income statement showed the following results from selling 500,000units 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:Cost of goods soldSelling expensesAdministrative expensesTotal$2,000,000200,000300,000$2,500,000Variable$1,300,00050,000150,000$1,500,000Fixed$700,000150,000150,000$1,000,000Management is considering the following alternative for 2013:Purchase new automated equipment that will change the proportion between variable andfixed 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#40117 | Written in 18-Jul-2015Price : $27