Alpha Company has provided projected information as follows: Net sales $10,000 Fixed manufacturing costs $1,000 Additionally, Alpha has experienced variable manufacturing costs of 45% of net sales and sees no changes during the budget period. Alpha expects that there will be no changes to any inventory values. Use this information to determine Alpha's: 1. Budgeted Cost of Goods Sold. 2. Budgeted Gross Profit.

Alpha Company has provided projected information as follows: Net sales $10,000 Fixed manufacturing costs $1,000 Additionally, Alpha has experienced variable manufacturing costs of 45% of net sales and sees no changes during the budget period. Alpha expects that there will be no changes to any inventory values. Use this information to determine Alpha's: 1. Budgeted Cost of Goods Sold. 2. Budgeted Gross Profit.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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Subject:- General Account
Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It began negotiating for a one-month bank loan of $500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month and require the company to repay interest and principal on May 31. In considering the loan, the bank requested a projected income statement and cash budget for May. The following information is available: The company budgeted sales at 600,000 units per month in April, June, and July and at 500,000 units in May. The selling price is $4 per unit. The inventory of finished goods on April 1 was 120,000 units. The finished goods inventory at the end of each month equals 20 percent of sales anticipated for the following month. There is no work in process. The inventory of raw materials on April 1 was 58,000 pounds. At the end of each month, the raw materials inventory equals no less than 40…
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