Required information Problem 13-58 & 13-59 (Static) (LO 13-4, 5) [The following information applies to the questions displayed below.] The following information is available for Fairmount Industries from year 1 operations: Sales revenue (45,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $22,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or administrative depreciation. Required: Prepare a budgeted income statement for year 2. Problem 13-58 (Static) Prepare Budgeted Financial Statements (LO 13-5) Fairmount Industries Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) Total manufacturing costs Marketing and administrative costs: Marketing (variable, cash) Administrative depreciation Administrative (fixed, cash) Marketing depreciation Total marketing and administrative costs Total costs Operating profit $ 228,000 S 228,000 $ 1,575,000 $ 240,000 545,000 327,000 160,000 15,000 171,000 41,000 162,000 15,000 $ 1,661,000 $ (86,000) 41,000 S 56,000 $ 284,000

The following information is available for Fairmount Industries from year 1 operations: Sales revenue (58,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 1,685,000 $ 253,000 558,000 340,000 173,000 184,000 54,000 175,000 21,500 $ 1,758,500 $ (73,500) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $35,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash…

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Problem 1-42 (Algo) Cost Data for Managerial Purposes (LO 1-3) Durham Parts (DP) makes a variety of products. It is organized in two divisions, Eastern and Western. The managers for each division are paid, in part, based on the financial performance of their divisions. The Western Division normally sells to outside customers but, on occasion, also sells to the Eastern Division. When it does, corporate policy states that the price must be cost plus 25 percent to ensure a "fair" return to the selling division. Western received an order from Eastern for 1,200 units. Western's planned output for the year had been 4,800 units before Eastern's order. Western's capacity is 6,000 units per year. The costs for producing those 4,800 units follow. Materials Direct labor Other costs varying with output Fixed costs (do not vary with output) Totals Total $ 374,400 182,400 144,000 288,000 $ 988,800 Per Unit $ 78 38 30 68 $ 206 Required: a. If you are the manager of the Western Division, what unit…

Ma3.   Nike Corp. recorded operating data for its shoe division for the year as follows:   Sales - $12160000   Contribution margin - 380000   Controllable fixed costs - 120000   Average total operating assets - 760000     What is the controllable margin for the year?   A.$260000   B.32%   C.$380000   D.50%

The following information is available for ABC Industries from year 1 operations: Sales revenue (65,000 units) $ 1,735,000 Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) 4 Administrative depreciation. Total costs Operating profits (losses) $ 260,000 565,000 347,000 180,000 191,000 61,000 182,000 25,000 $ 1,811,000 $ (76,000) All depreciation charges are fixed. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount…

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Dd3. For the most recent year, Petunia Company had the following data for its Clarkston Division, an investment center: total contribution margin—$671,110 budget, $695,741 actual; controllable fixed costs—$298,900 budget, $295,702 actual. Average operating assets for the year were $1,959,045. Determine the actual return on investment.

Presented below is selected financial information for two divisions of Crane Brewing. Supply the missing information for the lettered items. Lager Lite Lager Contribution margin $500,000 $299,200 Controllable margin 199,920 (c) Average operating assets $ (a) $1,200,900 Minimum rate of return $ % (b) 14 % Return on investment Residual income 21 % $104,720 % (d) $204,153