Author: Anonymous

 Love Haters Corporation reports the following cost information:     Total Costs Machine Hours January $2,100,000 3,100 February $1,900,000 2,700 March $1,200,000 1,100 Using the high-low method, estimated fixed costs are:

Serial Weightlifters Incorporated manufactures a single product that sells for $150 per unit and has variable costs of $110 per unit. The entity’s annual fixed costs are $484,000.  Calculate (A) the break-even point in units and (B) the amount of units necessary to be sold if the company is targeting after-tax income to be $250,000, given an average tax rate of 25%.  Label your answers, and round answers in units to the nearest unit.  SHOW YOUR WORK FOR POTENTIAL OF EARNING PARTIAL CREDIT IN THE CASE OF AN INCORRECT ANSWER.

V&V Company sells a product for $200 per unit with variable costs per unit of $130 and fixed costs of $420,000.  If the firm wants to earn $35,000 of pretax income, how many units must be sold?

Warhorse Enterprises breaks down its selling and administrative expense budget as follows:                                                             Office Supplies Expense                      $          1,000                                                             Office Wages Expense                                       17,000                                                             Depreciation Expense                                        4,000                                                             Miscellaneous Expense                                      6,000 On the company’s cash budget, the company should budget for selling and administrative expenses:

Rainmaker Enterprises the following information for October:               Job                   Beginning of Month Status        End of Month Status                 Total Allocated Costs             Job A                    In Process                                            Completed, Sold                           $153,000             Job B                    In Process                                            Completed, Not Sold                 $241,000             Job C                    Not Started                                        Completed, Sold                           $190,000             Job D                    In Process                                           In Process                                         $78,000   Overhead is applied at a rate of 125% of direct labor costs.  Actual Manufacturing Overhead was $120,000 for the month of October; $145,000 of overhead was applied to the four jobs (the total allocated costs above include the applied overhead).    Any under or overapplied overhead is adjusted directly to Cost of Goods Sold. The Work in Process account for Job D had a balance of $10,000 on October 1.  Direct materials used for Job D in October were $23,000.  What were direct labor costs assigned to Job D in October?

Local Domination, Incorporated produces two products:                                                      Units Produced/Sold     Selling Price (unit)        Variable Cost (unit)                      Product 1:                   4,900                                 $          21                               $          15                      Product 2:                   10,900                               $          19                              $          14   Fixed costs are $82,000, of which $21,000 can be directly traced to Product 1 and $46,000 can be directly traced to Product 2.  If Local Domination decides to drop Product 2, the company’s profits:

Rainmaker Enterprises the following information for October:               Job                   Beginning of Month Status        End of Month Status                 Total Allocated Costs             Job A                    In Process                                            Completed, Sold                           $153,000             Job B                    In Process                                            Completed, Not Sold                 $241,000             Job C                    Not Started                                        Completed, Sold                           $190,000             Job D                    In Process                                           In Process                                         $78,000   Overhead is applied at a rate of 125% of direct labor costs.  Actual Manufacturing Overhead was $120,000 for the month of October; $145,000 of overhead was applied to the four jobs (the total allocated costs above include the applied overhead).    Any under or overapplied overhead is adjusted directly to Cost of Goods Sold. Rainmaker Enterprises marks up product costs by 50% to determine sales prices of completed jobs.  For the month of October, Rainmaker Enterprises reports Gross Profit of:

Actual sales for Beauty Beavis Corporation in May were $200,000 (5,000 units sold).  If Beauty Beavis projects an increase in units sold of 10% per month and it will raise the price per unit by $2, what is the amount of budgeted sales revenue for the month of June?

 Which is included in the budgeted income statement but would never appear in the cash budget?

Trump Corporation manufactures great, terrific products that are made in the USA.  Two of his mid-level managers, Clinton and Sanders, have proposed different production setups for a new product, to be sold for $500/unit.  Clinton’s consists of fixed costs of $300,000 and a variable cost of $200/unit.  Sanders’ consists of fixed costs of $400,000 and a variable cost of $160/unit.  The indifference point in units sold – at which the two setups would produce the exact same result – is: