Reference no: EM132100493

Questions -

Q1. Texas Curtain Works is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Fabric purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 20 percent of sales and are paid during the month of sale. Other operating costs amounting to 25 percent of sales are to be paid in the month following the month of sales. Sales revenue is forecasted as follows:

Month	Sales
February	$440,000
March	$450,000
April	$480,000
May	$500,000
June	$510,000

What is the amount of fabric purchases during the month of March?

Q2. The Snape Corporation has the following data for 2014:

Selling price per unit	$10
Variable costs per unit	$6
Fixed costs	$20,000
Units sold	12,000

Snape's 2014 operating leverage is:

Q3. Peoria Corporation reported the following on their contribution format income statement:

Sales (12,000 units)	$350,000
Less: variable expenses	200,000
Contribution margin	$150,000
Less: fixed expenses	125,000
Net operating income	$ 25,000

What is the unit contribution margin?

Q4. Peoria Corporation reported the following on their contribution format income statement:

Sales (12,000 units)	$350,000
Less: variable expenses	200,000
Contribution margin	$150,000
Less: fixed expenses	125,000
Net operating income	$ 25,000

What is the contribution margin ratio?

Q5. The following information pertains to Marvolo, Inc:

Selling price per unit	$100
Variable costs per unit	$75
Total fixed costs	$425,000
Tax rate	40%

The sales volume required to obtain a target after-tax profit of $108,000 is:

Q6. Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit.

Q7. Moran Corp. sells $250,000 of bonds to private investors. The bonds are due in 10 years, have an 8% coupon rate and interest is paid semiannually. Moran received $287,195 for the bonds at issuance.

The effective rate on these bonds is:

Q8. Porters Inc. issued a 120-day note in the amount of $240,000 on 12/16/14 with an annual rate of 8%. What amount of interest has accrued as of 12/31/14?

Q9. Selected recent balance sheet and income statement information for The Gap, Inc. follows:

(in millions)	2014
Year-end accounts payable	$ 1,242
Average accounts payable	1,193
Sales	16,148
Cost of goods sold	9,855

Accounts payable days outstanding for 2014 is:

Q10. Sterling Co. recently underwent a sell-off of its home gardening and repair subsidiary, Campbell Co., to an independent party. If Sterling recorded a gain of $62,755 on the carve out and received $85,540 cash for the sale, what are the net assets of Campbell?

Q11. As of 2014, Fischer Corp. has $10 par, 4% preferred stock, 6,000 shares outstanding, and $1 par common stock with 38,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2011. If the company wants to distribute $3 per share to the common stockholders in 2014, what is the total amount of dividends that the company must pay in the current year?