Answered: ABC supplier incurred the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2 ABC supplier incurred the following actual costs during the year just ended: Direct material used $210,500 Direct labour 185 000 Manufacturing overhead 380,000. The inventory balances, on 1 January, were as follows: Raw material $47 000 Work in process $61 500 Finished goods $60 000. Each of these inventory balances was 10 percent higher at the end of the year. The cost of goods sold is: Select one: a. $765,250 b. $762,850 c. $760,000 d. None of the answers given 3 David Furniture Ltd incurred the following actual costs during the year just ended: Direct material used $200,020 Direct labour $190,000 Manufacturing overhead $278, 000. The inventory balances, on 1 January, were as follows: Raw material $47 000; Work in process $61 500 Finished goods $65 000. Each of these inventory balances was 10 percent lower at the end of the year. The cost of goods manufactured is: Select one: a. None of the answers given b. $674,000 c. $670,000 d. 650,000 4 ABC Ltd prepares annual budgets. The following beginning and ending inventory levels (in units) are planned for next year. 5 kilograms of direct material is required to produce each unit of the finished product. Direct material 1 January 260 000, 31 December 225 000; Work in process 1 January 45 000, 31 December 38 000; Finished goods 1 January 220 000, 31 December 225 000. If ABC plans to sell 820,000 units during the year, calculate the number of units the firm would have to manufacture Select one: a. 785 000 b. 820 000 c. 825 000 d. None of the answers given 5 ABC Ltd is a retailer of ladies’ fashion and has the following historical collection pattern for its credit sales: 65 percent collected in the month of sale15 percent collected in the first-month after-sale10 percent collected in the second-month after-sale5 percent collected in the third-month after-sale5 percent uncollectable. The credit sales have been budgeted for the last seven months of the year, as shown below: June $225,000 July 240,000 August 250,000 September 260, 000 October 280, 000 November 300, 000 December 225 000 Calculate the estimated total cash receipts during December from credit sales. Select one: a. $260,000 b. $244,000 c. $290,000 d. None of the answers given

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