Required information Problem 13-58 & 13-59 (Algo) (LO 13-4, 5) [The following information applies to the questions displayed below.] The following information is available for Fairmount Industries from year 1 operations: Sales revenue (48,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 1,620,000 $ 243,000 548,000 330,000 163,000 174,000 44,000 165,000 16,500 $ 1,683,500 $ (63,500) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $25,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipmeht because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Brohl Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or administrative depreciation.
Required information Problem 13-58 & 13-59 (Algo) (LO 13-4, 5) [The following information applies to the questions displayed below.] The following information is available for Fairmount Industries from year 1 operations: Sales revenue (48,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 1,620,000 $ 243,000 548,000 330,000 163,000 174,000 44,000 165,000 16,500 $ 1,683,500 $ (63,500) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $25,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipmeht because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Brohl Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or administrative depreciation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Nn.60.
Subject :- Account
![Required information
Problem 13-58 & 13-59 (Algo) (LO 13-4, 5)
[The following information applies to the questions displayed below.]
The following information is available for Fairmount Industries from year 1 operations:
Sales revenue (48,000 units)
Manufacturing costs
Materials.
Variable cash costs
Fixed cash costs
Depreciation (fixed)
Marketing and administrative costs
Marketing (variable, cash)
Marketing depreciation
Administrative (fixed, cash)
Administrative depreciation
Total costs
Operating profits (losses)
All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $25,000 will be
fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to
specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a
per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will
increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent.
Show Transcribed Text
Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent.
Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or
administrative depreciation.
Problem 13-59 (Algo) Estimate Cash from Operations (LO 13-4)
Fairmount Industries
Cash Basis Budgeted Income Statement
For Year 2
Required:
Estimate the cash from operations expected in year 2.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.
Manufacturing costs:
$ 1,620,000
$ 243,000
548,000
330,000
163,000
Total manufacturing costs
Marketing and administrative costs:
174,000
44,000
165,000
16,500
$ 1,683,500
$ (63,500)
Total cash marketing and administrative costs
Total cash costs
$
$
$
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a79f5fd-2bdd-484b-9c0d-a83d48b55247%2Fc607dd87-b777-42bb-9d2d-edfa7866dc54%2Fsg00q2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 13-58 & 13-59 (Algo) (LO 13-4, 5)
[The following information applies to the questions displayed below.]
The following information is available for Fairmount Industries from year 1 operations:
Sales revenue (48,000 units)
Manufacturing costs
Materials.
Variable cash costs
Fixed cash costs
Depreciation (fixed)
Marketing and administrative costs
Marketing (variable, cash)
Marketing depreciation
Administrative (fixed, cash)
Administrative depreciation
Total costs
Operating profits (losses)
All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $25,000 will be
fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to
specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a
per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will
increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent.
Show Transcribed Text
Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent.
Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or
administrative depreciation.
Problem 13-59 (Algo) Estimate Cash from Operations (LO 13-4)
Fairmount Industries
Cash Basis Budgeted Income Statement
For Year 2
Required:
Estimate the cash from operations expected in year 2.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.
Manufacturing costs:
$ 1,620,000
$ 243,000
548,000
330,000
163,000
Total manufacturing costs
Marketing and administrative costs:
174,000
44,000
165,000
16,500
$ 1,683,500
$ (63,500)
Total cash marketing and administrative costs
Total cash costs
$
$
$
0
0
0
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