QUESTION 1 New Norm Fashion produces washable face mask shield. The following budgeted/ actual information is provided regardingto the production of face mask: RM/unit Selling price 50.00 Direct materials 8.00 Direct labour 5.00 Variable production overheads 3.00 Details of its operations for the month of May and June 2021 are as follows: May June Production 500 380 Sales 300 500 Fixed production overheads are budgeted at RM4,000 per month and are absorbed on a unit basis. The normal level of production is budgeted at 400 units per month. Other costs: RM/month Fixed selling 4,000 Fixed administration 2,000 Variable sales commission 5% of sales revenue There was no opening inventory of face mask at the beginning of May. Required (a) Prepare income statement for the month of May and June using (i) variable costing (ii) absorption costing (b) Prepare a reconciliation of profit or loss figures based on your answers in a(i) and (c)Describe a situation where net profit under variable costing is higher than absorption costing

QUESTION 1 New Norm Fashion produces washable face mask shield. The following budgeted/ actual information is provided regardingto the production of face mask: RM/unit Selling price 50.00 Direct materials 8.00 Direct labour 5.00 Variable production overheads 3.00 Details of its operations for the month of May and June 2021 are as follows: May June Production 500 380 Sales 300 500 Fixed production overheads are budgeted at RM4,000 per month and are absorbed on a unit basis. The normal level of production is budgeted at 400 units per month. Other costs: RM/month Fixed selling 4,000 Fixed administration 2,000 Variable sales commission 5% of sales revenue There was no opening inventory of face mask at the beginning of May. Required (a) Prepare income statement for the month of May and June using (i) variable costing (ii) absorption costing (b) Prepare a reconciliation of profit or loss figures based on your answers in a(i) and (c)Describe a situation where net profit under variable costing is higher than absorption costing

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The production manager of Rordan Corporation prepared the following quarterly production forecast for next year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 11,200 8,500 8,600 10,900 Each unit requires 0.55 direct labor-hour, and direct laborers are paid $16.00 per hour. Required: 1. Prepare a direct labor budget for next year. Note: Round "Direct labor time per unit (hours)" answers to 2 decimal places.
GHI Company manufactures two products that sell to the same market. Its budget and operating results for 2021 are as follows: Budgeted Actual Unit sales Product A 30,000 35,000 Product B 60,000 65,000 Unit contribution margin Product A P 4.00 P 3.00 Product B PI0.00 P12.00 Unit selling price Product A PI0.00 P12.00 Product B P25.00 P24.00 Industry volume was estimated to be 1,500,000 units at the time the budget was prepared. Actual industry volume for the period was 2,000,000 units. The market size contribution margin variance is Select one: a. P240,000 U O b. P240,000 F c. P160,000 F d. PI60,000 U
A company offers three products, A,B,C The current budget for the upcoming accounting period is presented below, by product: A B C # of units 18 12 30 Selling price per unit ($) 75 50 60 Variable cost per unit ($) 25 20 15 Fixed costs (total $) 500 360 900 There is a different customer market for each of these products. Fixed costs reflect product-specific machinery. Required 1. Identify which of the two methods to compute the break-even point best suits this scenario. 2. Describe why the method you identified in (1) best suits this scenario. 3. Compute the break-even point in units using this method.
Echo Amplifiers prepared the following sales budget for the first quarter of 2018: Jan. Feb. Mar. Units 800 1,300 1,500 Sales price $100 $100 $100 Budgeted sales $80,000 $130,000 $150,000 It also has this additional information related to its expenses: Direct material per unit $1.50 Direct labor per unit 2 Variable manufacturing overhead per hour 0.50 Fixed manufacturing overhead per month 2,900 Sales commissions per unit 15 Sales salaries per month 5,100 Delivery expense per unit 0.40 Factory utilities per month 5,000 Administrative salaries per month 21,000 Marketing expenses per month 8,000 Insurance expense per month 11,000 Depreciation expense per month 10,000 Prepare a sales and administrative expense budget for each month in the quarter ending March 31, 2018. Enter all amounts as positive numbers. Echo AmplifiersSales and Administrative BudgetFor the Quarter Ending March 31, 2018 January February March Budgeted Sales in Units…
Question 1 TinyTom makes one product, which sells for $70 each, and prepares functional budgets on a monthly basis. For the first three months of 2021, the following figures are proposed: Sales January 10,000 units February 14,000 units March 12,000 units 10,000 April A closing stock of 10% of the next month's sales is required, the forecast sales for April is 10,000 units. The standard material cost of one unit of finished product is: Material X 4 units at $2 per unit Material Y 8 units at $3 per unit Material Z 2 unit at $5 per unit The standard direct labour cost of one unit of finished product is: 4 hours at $5 per hour Department A Department B Department C 4 hours at $5 per hour 2 hours at $4 per hour Material X Y Material Opening Stock Closing Stock 75,000 80,000 15,000 60,000 75,000 12,500 Required: 1) Calculate the standard prime cost of one unit of finished product. ii) Calculate the Sales Budget for each of months. iii) Calculate the Production Budget for each of months. iv)…
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 11, 200 2nd Quarter 8,500 3rd Quarter 8,600 4th Quarter 10,980 Units to be produced Each unit requires 0.55 direct labor-hours, and direct laborers are paid $16.00 per hour. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.) Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost Rordan Corporation Direct Labor Budget 2nd Quarter 1st Quarter 3rd Quarter 4th Quarter Year
Flexible Budget for Various Levels of Activity Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required:
Lane Products manufactures a popular kitchen utensil. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It opened negotiations with the local bank for a one-month loan of $44,000 starting March 1. The bank would charge interest at the rate of 0.5 percent per month and require the company to repay interest and principal on March 31. In considering the loan, the bank requested a projected income statement and cash budget for March. The following information is available: ● ● ● ● The company budgeted sales at 14,000 units per month in February, April, and May and at 11,000 units in March. The selling price is $62 per unit. The company offers a 2 percent discount for cash sales. The company's experience is that bad debts average 1 percent of credit sales. The inventory of finished goods on February 1 was 2,600 units. The desired finished goods inventory at the end of each month equals 25 percent of sales anticipated for the…
Static budget versus flexible budget The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: Hagerstown Company Machining Department Monthly Production Budget Wages Utilities Depreciation Total $1,090,000 49,000 82,000 $1,221,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced 100,000 91,000 82,000 May June July The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 1,221,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: $1,150,000 1,095,000 1,042,000…
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,400 6,500 7,200 8,100 Each unit requires 0.65 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year. Note: Round "Direct labor time per unit (hours)" answers to 2 decimal places.
Flexible Budget for Various Levels of Activity Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc. Overhead Budget For the Coming Year Variable costs: Rate per Hour Activity Level90,000 Hours Maintenance $fill in the blank 336531fff03bfc2_1 $fill in the blank 336531fff03bfc2_2 Power fill in the blank 336531fff03bfc2_3 fill in the blank 336531fff03bfc2_4 Indirect labor fill in the blank 336531fff03bfc2_5 fill in the…
Perez Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost $ 8.98 per unit $ 3.40 per unit Fixed manufacturing cost Fixed selling and administrative cost $ 2,000 total $ 600 total Perez planned to produce and sell 2,300 units. Actual production and sales amounted to 2,600 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the proforma Income statement in contribution format that would appear in a flexible budget. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the pro forma income statement in contribution format that would appear in a master budget. PEREZ MANUFACTURING COMPANY Pro Forma Income Statement Master Budget 2,300 Units

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