Answer all Questions.
Question 1 -
Skylight Company is a manufacturer of computers. The company has enough orders for the monthly production of 1,000 computers. The company management provide you with the monthly manufacturing information data as follows:
Plant manger's salary $8,000
Factory building maintenance cost $3,000
Advertising for computers $16,000
Sales commissions $10,000
Rent on factory building $12,000
Insurance on factory building $6,000
Depreciation on factory building $1,400
Raw materials $40,000
Factory utilities $1,600
Supplies for Administrative office $400
Wages for factory workers $108,000
Depreciation on office equipment $1,000
Miscellaneous factory materials (thread, glue, etc.,) $4,000
Instruction:
Identify cost items and compute the following costs:
a. Product Costs
b. Period cost
Question 2 -
Jay Williams Company, a manufacturer of soccer ball provide you with the following data for the month of January, 2016:
Raw materials purchased $96,400
Repairs on factory building $1,400
Property taxes paid on factory $9,600
Factory manager's salary $29,000
Office utilities expense $8,650
Factory utilities $27,600
Depreciation on factory machinery $16,000
Factory insurance $4,600
Indirect labor $24,460
Direct labor $149,250
Sales $554,000
Sales discounts $4,200
Cash $32,000
Accounts receivable $27,000
Work in process- Inventory 1/1/2016 $19,800
Work in process- Inventory 1/31/2016 $18,600
Finished goods- Inventory 1/1/2016 $96,000
Finished goods- Inventory 1/31/2016 $95,900
Raw materials- Inventory 1/1/2016 $39,600
Raw materials- Inventory 1/31/2016 $48,000
Instruction:
a. Prepare the schedule Cost of Goods Manufactured
b. Compute the gross profit only (Hint: "Must compute cost of goods sold" to start with)
c. Prepare the "current asset" section of the balance sheet as at 1/31/2016
Question 3 -
Sunshine computers has the following information available for December 2016:
Unit selling price of laptop $400
Unit variable costs $270
Total fixed costs $104,000
Units sold 1,240
Instructions:
a. Prepare a Cost Volume Profit (CVP) schedule that shows the Net income.
b. Compute Sunshine break-even point sales units.
c. Compute Sunshine break-even sales dollar.
Question 4 -
The management of Hardwood Flooring has collected some data showing the monthly expense to better understand its maintenance cost behavior.
Month Equipment hours Total Cost
January 600 $4,800
February 800 $6,000
March 1,200 $7,200
April 1,580 $9,000
May 1,000 $6,400
June 1,600 $9,800
Instructions:
a. Using the high-low method, determine the variable cost per unit.
b. Using the high-low method, determine the fixed cost per unit.
Question 5 -
Solar Energy Company manufactures solar panel for energy efficient homes. The company wanted to maintain inventory at 30% of the following month's expected sales unit. At the beginning of the year the company had 20,000 units on hand, based on the following projected sales for each quarter:
First Quarter 50,000
Second Quarter 62,500
Third Quarter 45,000
Fourth Quarter 55,000
Instructions: Prepare a schedule of production budget for first quarter through third quarter.
Question 6 -
Energy electrical Company anticipate that its 2016 budgeted sales as follows:
January $200,000
February $220,000
March $270,000
Sales are 40% cash and 60% credit (accounts receivable). The company expect 10% cash collection in the month of sale, 50% in the month following sale, and 36% in the second month following sale and 4% are uncollectible.
Instruction:
a. Prepare schedule of cash collections for each month
b. What is the total cash collected for all three months?