Related questions
Question 22
|
|
|
|||
|
|
You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021.
R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Admin 4.00 Rent 7.50 Rates 2.50 Mark up 65
Your initial plan is to produce 200 units per month and to start selling in August 2021. The August September October November December Unit 50 80 120 180 200 All sales will be made on 30 days credit.
Machinery will cost you R24, 000. This you propose financing on hire purchase terms; deposit payable July 1, 2021, R2,400; followed by 24 monthly instalments of R1,000 each. Raw materials suppliers will deliver an equal amount of parts at the beginning of each month. They will allow you 60 days credit.
Wages and administrative expenses will be paid in the month in which they are incurred. Rent and rates of the premises will be paid quarterly in advance commencing on July1, 2021. REQUIRED: Prepare (a) Calculate the closing balance for December. |
|
|
|
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps
- mabled: Exam 5 Saved Assume a company manufactures many products, one of which normally sells for $48 per unit. The company's accounting syster cost for this product: Direct materials Direct labor Manufacturing overhead Total cost Per Unit $ 18 12 10 $ 40 The company estimates that $3 of its manufacturing overhead varies with respect to the number of units produced. The remainder unaffected by the volume of units produced within the relevant range. A customer has approached the company with an offer to buy 300 units of a customized version of the product mentioned above f this order using existing manufacturing capacity. To accommodate the customer's desired product design, the company would incu per unit of $3. It would also have to buy a special tool for $580 that has no other use or resale value after the special order is compl this order will not have any effect on sales to other customers, what is the financial advantage (disadvantage) of accepting the speci Multiple Choice $(300)…arrow_forwardQUESTION 7 You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 330 hours per month and charge your customers $18 per hour. Your anticipated costs include: Advertising Gas $33.00 per month $1.20 per hour Depreciation $25.00 per month Assistant's Wages $7.00 per hour Miscellaneous Expenses $950.00 per month Calculate your budgeted contribution margin per hour on the contribution margin income statement.arrow_forwardQuestion 6 Technology Inc. Ltd sells desktop computer printers for $65 per unit. Unit product costs are: Direct materials $12 Direct labor 20 Manufacturing overhead 6 Total $38 A special order to purchase 10,000 desktop computer printers has recently been received from another company, and Technology Inc. has the idle capacity to fill the order. The company will incur an additional $1.50 per printer for additional labor costs due to a slight modification the buyer wants to be made to the original product. One-third of the manufacturing overhead costs are fixed and will be incurred no matter how many units are produced. $2,100 of existing fixed administrative costs will be allocated to the order as “part of the cost of doing business”.…arrow_forward
- Nonearrow_forwardQuestion 3 The following monthly data in contribution format are available for the Timor Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 227,500 162.500 65,000 45.000 20,000 Per Unit $ $ $ 91 65 26 The company produced and sold 2,500 units during the month and had no beginning or ending inventories. a) What is the current margin of safety? b) Management is concerned about having the funds to pay dividends next quarter. They believe net operating income of $35,000 will be sufficient. How much sales revenue is necessary to achieve this target profit?arrow_forwardQUESTION 9 You plan on starting a lawn mowing business by investing $700 of your own money and purchase $500 of equipment. You plan to work 260 hours per month and charge your customers $22 per hour. Your anticipated costs include: Depreciation Advertising Gas Assistant's Wages Miscellaneous Expenses $25.00 per month $26.00 per month $1.20 per hour $8.00 per hour $20.00 per month Calculate your Variable cost per hour on the budgeted contribution margin income statement. 1arrow_forward
- Question 23 v Saved Dreamworks Ltd. produces dream spheres. Projected sales and production for 2021 are as follows: 2021 1 2 4 Quarter (Jan - Mar) (Apr - Jun) (Jul - Sep) (Oct - Dec) Expected Sales (units) 30,000 33,000 38,000 35,000 Unit Selling Price $75 $75 $75 $75 Expected Production (units) 30,300 33,500 37,700 35,100 Manufacturing overhead consists of variable costs of $9 per unit produced and annual fixed costs of $2,000,000. Selling and administrative expenses consist of sales commissions of 15% of sales and fixed costs of $248,000 per quarter. Required: a) What is the total manufacturing overhead for the fourth quarter? (Use the space below to show your work) b) What are the total Selling, General and Administrative expense for the fourth quarter? (Use the space below to show your work) U v II Paragraph B I + Part a) Add a File Record Audio Record Videoarrow_forwardQUESTION 8 Grass is Greener, Inc., plans to charge its customers by the hour and to work 350 hours at $16 per hour. It expects its variable costs to be $6 per hour and fixed costs to be $600. Calculate the number of hours needed to earn $1,800 in operating income? (Round to the nearest hour)arrow_forwardQuestion 17 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…arrow_forward
- hedule detailing the weekly total production of per week, and the cost of each unit of capital is tz uolzsano Carrow_forwardQuestion 13 Lightview produces and sells overhead projectors to schools and colleges. Each overhead projector uses $27 of materials and requires 3 hours of labor at $10 per hour. Each overhead projector sells for $85. Lightview has fixed overheads of $227930. What is Lightview's break-even point in sales units? Round your answer to 2 decimal places.arrow_forwardQuestion 3 (12 marks) Grass & Go Ltd produce two models of petrol lawnmowers, Standard and Deluxe. Overhead was allocated based on direct labour hours. The following information was collected at the end of 2022. Annual sales Selling price Direct material cost per unit Direct labour cost per unit Overhead cost per unit Following an examination of the data above the marketing manager recommended that more emphasis should be placed on selling the Deluxe mower. The manufacturing manager disagreed and argued that there were problems in relation to the costing of the mowers. The management accountant agreed with the manufacturing manager and suggested that an activity-based costing system should be installed. Overhead activity Setups Standard 36,250 units $650 $90 $200 $90 The general manager asked the management accountant to recalculate the product costs using ABC techniques. The management accountant subsequently collected the following information. Cost driver Number of setups Machine…arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education