FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Shredder Manufacturing has the following projected unit sales (at $18 per unit) for four months of operations: Month Unit Sales January 60,000 February 72,000 March 76,800 April 84,000 Twenty-five percent of the customers are expected to pay in the month of sale and take a 3 percent discount; 70 percent of the customers are expected to pay in the month following sale. The remaining 5 percent will never pay. It takes two pounds of raw material (costing $0.75 per pound) to produce a unit of product. In January, no raw material is in beginning inventories, but management wants to end each month with enough material for 20 percent of the next month’s production. (April’s production is assumed to be 81,600 units.) Shredder Manufacturing pays for 60 percent of its material purchases in the month of purchase and 40 percent in the following month. Each unit of product requires 0.5 hours of labor time. Labor is paid $15 per hour and is paid in the same month as worked. Overhead is…arrow_forwardThe production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,000 15,000 14,000 13,000 In addition, 15,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $6,200. Each unit requires 5 grams of raw material that costs $1.80 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 5,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.40 direct labor-hours and direct laborers are paid $13.50 per hour. Required: 1. and 2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material…arrow_forwardAssume a company’s estimated sales for January, February, and March are 36,000 units, 37,000 units, and 35,000 units, respectively. The company always maintains ending finished goods inventory equal to 15% of next month’s unit sales. What is the required production in units for January?arrow_forward
- Anticipated unit sales are January, 5,000, February, 4,000, and March 8,000 Finished goods are consistently maintained at 80% of the following month's sales If units cost $10 each to produce, how much is February's total cost of production? a) $0 b) $40,000 c) $72000 d) $80 000 e) None of thesearrow_forwardParwin Corporation plans to sell 34.000 units during August. If the company has 13.500 units on hand at the start of the month, and plans to have 14.500 units on hand at the end of the month, how many units must be produced during the month? Multiple Choice 47,500 33,000 48.500 35.000arrow_forwardThe production manager of Rordan Corporation prepared the following quarterly production forecast for next year: Units to be produced 1st Quarter 10,200 2nd Quarter 3rd Quarter 4th Quarter 7,500 8,100 10,400 Each unit requires 0.45 direct labor-hour, and direct laborers are paid $14.00 per hour. Required: 1. Prepare a direct labor budget for next year. Note: Round "Direct labor time per unit (hours)" answers to 2 decimal places. Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Yeararrow_forward
- Ultravision Incorporated anticipates sales of $370,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $33,000 (half of $66,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are: January February March April $ 23,000 26,000 23,000 28,000 Fixed overhead is $19,000 per month. Prepare a schedule of cash payments for January through April. Note: Assume the $370,000 of sales occur equally over the four months of January through April, i.e. Monthly sales = $370,000 4. Input your answer as positive a value. Monthly material purchase Payment to material purchases Monthly labor cost…arrow_forward29) Sales for December are expected to be 36,000 units and Production is expected to be 37,000 units. You pay your Direct Labor workers $24 per hour and each unit requires 2 hours of labor and 3 hours of machine time. Overhead costs are $5 per hour of which $1 per hour is depreciation. What will be your direct labor costs for the month of December?arrow_forwardUltravision Inc. anticipates sales of $420,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $38,000 (half of $76,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are: January February March April $28,000 31,000 28,000 33,000 Fixed overhead is $24,000 per month. Prepare a schedule of cash payments for January through April. (Assume the $420,000 of sales occur equally over the four months of January through April, i.e. Monthly sales = $420,000 / 4.) Ultravision Inc. Cash Payment Schedule December January February March April Monthly material purchase Payment to material…arrow_forward
- Ultravision Incorporated anticipates sales of $270,000 from January through April. Materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of January, February, March, and April. Materials are paid for one month after the month purchased. Materials purchased in December of last year were $23,000 (half of $46,000 in sales). Labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in February and April. The labor figures are: January $ 13,000 February 16,000 March 13,000 April 18,000 Fixed overhead is $9,000 per month. Prepare a schedule of cash payments for January through April.arrow_forwardAssume that a company expects to produce 10,300, 11,300, and 13,300 units of finished goods in January, February, and March, respectively. Each unit of finished goods requires 4 pounds of raw material and each pound of raw material costs $1.75. The company always maintains an ending raw materials inventory equal to 25% of next month’s production needs. What is the amount of expected raw materials purchases for February?arrow_forwardAa 30.arrow_forward
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