202 Test 2 Competition Fall 2021 notes for lectures. ice and ica solutions PDF

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notes for lectures. ice and ica solutions notes for lectures. ice and ica solutions notes for lectures. ice and ica solutions notes for lectures. ice and ica solutions...

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202 Test 2 Fall 2021 Competition Student name:__________ 1) The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,600 direct labor-hours will be required in February. The variable overhead rate is $9.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $103,200 per month, which includes depreciation of $18,220. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for February should be: 1) ______ A) $12.00 per direct labor-hour

B) $19.10 per direct labor-hour

C) $9.40 per direct labor-hour

D) $21.40 per direct labor-hour

D Budgeted direct labor-hours Variable manufacturing overhead rate Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead (a) Budgeted direct labor-hours (b) Predetermined overhead rate for the month (a) ÷ (b)

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8,600 $ 9.40 $ 80,840 103,200 $ 184,040 8,600 $ 21.40

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202 Test 2 Fall 2021 Competition 2)

Data concerning Follick Corporation's single product appear below:

Selling price per unit Variable expense per unit Fixed expense per month

$340.00 $74.80 $176,280

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.) 2) ______ A) $226,000

B) $275,720

C) $176,280

D) $452,000

A Contribution margin ratio = Unit contribution margin ÷ Unit selling price = ($340.00 per unit − $74.80 per unit) ÷ $340.00 per unit = $265.20 per unit ÷ $340.00 per unit = 0.78 Dollar sales to break even = Fixed expenses ÷ Contribution margin ratio = $176,280 ÷ 0.78 = $226,000

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202 Test 2 Fall 2021 Competition 3) Parwin Corporation plans to sell 42,000 units during August. If the company has 17,500 units on hand at the start of the month, and plans to have 18,500 units on hand at the end of the month, how many units must be produced during the month? 3) ______ A) 43,000

B) 41,000

C) 60,500

D) 59,500

A August Budgeted unit sales Add desired ending finished goods inventory Total needs Less beginning finished goods inventory

42,000 18,500 60,500 17,500

Required production in units

43,000

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202 Test 2 Fall 2021 Competition 4) Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November.

Sales (6,400 units) Variable expenses Contribution margin Fixed expenses Net operating income

$403,200 275,200 128,000 103,500 $24,500

If the company sells 6,300 units, its net operating income should be closest to: (Do not round intermediate calculations.)

4) ______ A) $23,979

B) $22,500

C) $24,500

D) $20,000

B Selling price per unit = Sales ÷ Quantity sold = $403,200 ÷ 6,400 units = $63 per unit Variable expenses per unit = Variable expenses ÷ Quantity sold = $275,200 ÷ 6,400 units = $43 per unit Unit contribution margin = Selling price per unit − Variable expenses per unit = $63 per unit − $43 per unit = $20 per unit Profit = (Unit contribution margin × Q) − Fixed expenses = ($20 per unit × 6,300 units) − $103,500 = $126,000 − $103,500 = $22,500

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202 Test 2 Fall 2021 Competition 5) Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.

Raw material* Finished goods

Beginning Inventory 49,000 89,000

Ending Inventory 59,000 59,000

* Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 525,000 units during next year, the number of units it would have to manufacture during the year would be: 5) ______ A) 495,000units

B) 476,000 units

C) 525,000 units

D) 555,000 units

A Finished goods: Beginning inventory + Units produced = Ending inventory + Units sold 89,000 + Units produced = 59,000 + 525,000 Units produced = 59,000 + 525,000 − 89,000 = 495,000

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202 Test 2 Fall 2021 Competition 6) The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: ● Sales at $630,000, all for cash. ● Merchandise inventory on November 30 was $290,000. ● The cash balance at December 1 was $36,000. ● Selling and administrative expenses are budgeted at $114,000 for December and are paid in cash. ● Budgeted depreciation for December is $61,000. ● The planned merchandise inventory on December 31 is $320,000. ● The cost of goods sold is 70% of the sales price. ● All purchases are paid for in cash. ● There is no interest expense or income tax expense. The budgeted cash receipts for December are: 6) ______ A) $495,000

B) $630,000

C) $135,000

D) $691,000

B Sales were all for cash and were $630,000.

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202 Test 2 Fall 2021 Competition 7) Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $38,500. If fixed expenses totaled $74,000 for the year, the break-even point in unit sales was: 7) ______ A) 11,250 units

B) 5,625 units

C) 13,175 units

D) 7,400 units

D Profit = (Sales − Variable expenses) − Fixed expenses $38,500 = ($225,000 − Variable expenses) − $74,000 Variable expenses = $225,000 − $74,000 − $38,500 = $112,500 Contribution margin ratio = Contribution margin ÷ Sales = ($225,000 − $112,500) ÷ $225,000 = 0.50 Dollar sales to break even = Fixed expenses ÷ Contribution margin ratio = $74,000 ÷ 0.50 = $148,000 Unit sales to break even = $148,000 ÷ $20 per unit = 7,400 units

8) Sufra Corporation is planning to sell 100,000 units for $2.25 per unit and will break even at this level of sales. Fixed expenses will be $90,000. What are the company's variable expenses per unit? 8) ______ A) $0.90

B) $2.03

C) $1.35

D) $0.45

C Unit sales to break even = Fixed expenses ÷ Unit contribution margin 100,000 units = $90,000 ÷ Unit contribution margin Unit contribution margin = $90,000 ÷ 100,000 units = $0.90 per unit Unit contribution margin = Selling price per unit − Variable expenses per unit $0.90 per unit = $2.25 per unit − Variable expenses per unit Version 1

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202 Test 2 Fall 2021 Competition Variable expenses per unit = $2.25 per unit − $0.90 per unit = $1.35 per unit

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