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I need help answering theses questions, please use the attached file and place the answers on there.
Problem 1 (20 points)
X-Ray Manufacturing has the following revenues and costs:
Sales
Fixed overhead
Direct labor
Direct materials
Selling expenses
Administrative expenses
Variable overhead
Interest expense
Income tax |
$4,340,000
$1,020,000
$458,000
$620,000
$365,000
$489,000
$224,000
$118,000
$366,000 |
Prepare a contribution margin income statement with both dollars and percentages of sales displayed.
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Problem 2 (20 points)
Presented below are selected budget data items for Globe Corporation for a three-month period:
Sales
Direct materials
Direct labor
Variable overhead
Fixed overhead
Selling and admin. costs
Fixed loan payments |
OCTOBER
$960,000
$123,000
$90,000
$65,600
$140,000
$312,000
$140,000 |
NOVEMBER
$870,000
$119,000
$85,000
$62,400
$140,000
$310,000
$140,000 |
DECEMBER
$850,000
$125,000
$96,000
$68,000
$140,000
$315,000
$140,000 |
Sales were $770,000 in August and $840,000 in September. Material usage was $115,000 in August and $118,000 in September. All sales are on account, and accounts receivable is historically collected 15% in the month of sale, 65% in the month following sales, and the remainder two months after the sale. Materials are paid for 40% in the month used and 60% the following month. All other expenses are paid in the month incurred. The cash balance was $35,000 at the beginning of October, and management wants to determine if the company will have enough cash to pay a year-end bonus.
Prepare a three-month cash budget, including a schedule for cash collections and material payments.
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Problem 3 (10 points)
Olympic Products Inc. manufactures and distributes barbecue grills. The company normally sells 1,000 of these grills each month for a price of $140 each. The material cost for a grill is $44 and the direct labor is $22. The variable overhead cost is $13 per grill, and the fixed overhead cost is $30,000 per month. A contract manufacturer has approached the company and offered to supply the grills ready to sell for $85 each. The company management believes that if it accepts this offer, Olympic Products will be able to lease unused factory space for $10,000 per month.
Perform a make-versus-buy analysis.
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