Question

questions 8-15

Settings Support View Tour Advanced Genre Vocabulary Plagiarism Enhancement Send to O About Proofreaders Issues Help Settings Premium 6 5 I I 4 I 1 2 I 3 1. Projected unit sales: June sales 120,000, July sales 130,000, August 140,000, September 150,000 and October sales 170,000. Sales price per unit, $15.00 Units in ending inventory each month should equal 10 % of next month sales. 2. 3. 4. Raw material required per unit is 2 pounds; cost is $3.00 per Ib. 5. Ending inventory required at the end of each month is 5 % of next month needs. 6. Direct labor required to produce one units is .25 direct labor hour. The hourly rate is $10.00. 7. Sales and administrative expenses are projected to be: salaries $275, 000 per month, commissions 29% of sales dollars and other expenses are expected to be $75,000 per month plus 3% of sales dollars. Forty percent of the sales are collected in the month of sales and 60 percent in the month 8. following. Thirty percent of raw materials purchases are paid in in the month of purchase and 70 percent in the month following. 9. 10. Manufacturing overhead costs: a. Indirect labor, $3.00 per direct labor hour, b. Indirect materials are $1.00 per unit produced c. Utilities are $1.00 per direct labor hour, d. Maintenance cost are $0.50 per direct labor hour, I e. Supervisor salaries are $40,000 per month, f. Depreciation is $10,000 per month, g. Property taxes are $5,000 per month, h. Insurance is $7,000 per month, and i. Fixed maintenance cost is $10,000 per month. Other pertinent information: a. Beginning cash balance is $100,000 b. Beginning accounts payable balance is $530,000.

The beginning cash balance and beginning accounts payable balance are at the beginning of the June month im assuming. I need a quarter totals from July to September.

Answer 1

9. Contribution Margin & 10. Operating Income
Particulars	June	July	August	September	October	Per unit
Units sold	120,000	130,000	140,000	150,000	170,000
Sale price per unit	15	15	15	15	15	15.00
Sales	1,800,000	1,950,000	2,100,000	2,250,000	2,550,000
Less:
Raw material (unit sold *2*3)	720,000	780,000	840,000	900,000	1,020,000	6.00
Direct labour (unit sold *0.25*10)	300,000	325,000	350,000	375,000	425,000	2.50
Variable overheads
Commission (sales *2%)	36,000	39,000	42,000	45,000	51,000	0.30
Other expenses (sales *3%)	54,000	58,500	63,000	67,500	76,500	0.45
Indirect labor (unit sold *0.25*3)	90,000	97,500	105,000	112,500	127,500	0.75
Indirect material (unit sold *1)	120,000	130,000	140,000	150,000	170,000	1.00
Utilities (unit sold *0.25*1)	30,000	32,500	35,000	37,500	42,500	0.25
Maintenance cost (unit sold *0.25*0.50)	15,000	16,250	17,500	18,750	21,250	0.13
Contribution Margin	435,000	471,250	507,500	543,750	616,250	3.63
Fixed overheads
sales and admin expense	275,000	275,000	275,000	275,000	275,000
Other expense	75,000	75,000	75,000	75,000	75,000
Supervisor salaries	40,000	40,000	40,000	40,000	40,000
Depreciation	10,000	10,000	10,000	10,000	10,000
Property taxes	5,000	5,000	5,000	5,000	5,000
Insurance	7,000	7,000	7,000	7,000	7,000
Fixed maintenance cost	10,000	10,000	10,000	10,000	10,000
Net Operating income	13,000	49,250	85,500	121,750	194,250

11. Break even sales Dollar
Particulars	Amount
Fixed cost	422,000
Contribution Margin	3.63
Break even sales (units)	116,253
(Fixed cost/contribution margin)
Price per unit	15
Break even sales Dollar	1,743,802

12. Sales dollar needed to net operating income $400,000
Particulars	Amount
Break even sales Dollar	1,743,802
Additional sales required	1,652,893
(400000*15/3.63)
Total	3,396,694

13. Ending Accounts receivable
Particulars	Amount
October month sales	2,550,000
Collection in next month	60%
Ending Accounts receivable	1,530,000

15. Ending Accounts payable
Particulars	Amount
October month purchase	1,020,000
Payment in next month	70%
Ending Accounts payable	714,000