Reference no: EM132788368
Question 1 - On March 31, Streuling Enterprises, a merchandising firm, had an inventory of 38,000 units, and it had accounts receivable totaling $85,000. Sales, in units, have been budgeted as follows for the next four months:
April 60,000
May 75,000
June 90,000
July 81,000
Streuling's board of directors has established a policy to commence in April that the inventory at the end of each month should contain 40% of the units required for the following month's budgeted sales.
The selling price is $2 per unit. One-third of sales are paid for by customers in the month of the sale; the balance is collected in the following month.
Required - MUST SHOW ALL CALCULATIONS
a) Make a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.
Question 2 - Monson Company is considering three investment opportunities with cash flows as described below: (Ignore income taxes in this problem.)
Project A: Cash investment now $15,000
Cash inflow at the end of 5 years $21,000
Cash inflow at the end of 8 years $21,000
Project B: Cash investment now $11,000
Cash outflow for 5 years $3,000
Addition cash inflow at the end of 5 years $21,000
Required - MUST SHOW ALL CALCULATIONS
a. Calculate the net present value for project A. Monson Company uses a 12% discount rate.
b. Calculate the net present value for project B. Monson Company uses a 12% discount rate.
c. Which project should the company accept and why?
Question 3 - The EG Company produces and sells one product: a microwave oven. The following data refer to the year just completed:
Beginning inventory $0
Units produced 25,000
Units sold 20,000
Sales price per unit $400
Selling and administrative expenses:
Variable per unit $15
Fixed (total) $275,000
Manufacturing costs:
Direct materials cost per unit $200
Direct labour cost per unit $50
Variable overhead cost per unit $30
Fixed overhead (total) $300,000
Assume that direct labour is a variable cost.
Required - SHOW ALL CALCULATIONS
a) What is the unit product cost for the month under absorption costing?
b. What is the unit product cost for the month under variable costing?
c. Explain the difference between variable and absorption costing.
c) Make an income statement for the month using the absorption costing method.
QUESTION 4 - Part A - The following materials standards have been established for a particular product:
Standard quantity per unit of output 9.4 kilograms
Standard price $16.90 per kilograms
The following data pertain to operations concerning the product for the last month:
Actual materials purchased 7,300 kilograms
Actual cost of materials purchased $116,435
Actual materials used in production 7,100 kilograms
Actual output 740 units
Required - MUST SHOW ALL CALCULATIONS
a) What is the materials price variance for the month?
b) What is the materials quantity variance for the month?
Part B - The following labour standards have been established for a particular product:
Standard labour hours per unit of output 2.8 hours
Standard labour rate $11.50 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked 6,900 hours
Actual total labour cost $80,385
Actual output 2,300 units
Required - MUST SHOW ALL CALCULATIONS
a) What was the labour rate variance for the month?
b) What was the labour efficiency variance for the month?