1-

2- At the end of January, Higgins Data Systems had an inventory of 630 units, which cost $14 per unit to produce. During February the company produced 910 units at a cost of $17 per unit.

If the firm sold 1,130 units in February, what was its cost of goods sold? (Assume LIFO inventory accounting.)

3- If you invest $27,000 at 8% interest, how much will you have in 8 years? Use Appendix A to calculate the answer.

• $49,977

• $14,580

• $104,749

• $41,580

4- In general, a firm with lower amounts of sales on cash has

• more rapidly collection of credit sales.

• more ability to buy raw materials on credit.

• higher needs to borrow.

• lower needs to borrow.

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Simpson Glove Company has made the following sales projections for the next six months. All sales are credit sales. $53,000 March April 62,000 44,000 May June 59,000 70,000 74,000 July August Sales in January and February were $41,000 and $39,000, respectively. Experience has shown that of total sales receipts 10 percent are uncollectible, 40 percent are collected in the month of sale, 30 percent are collected in the following month, and 20 percent are collected two months after sale. Prepare a monthly cash receipts schedule for the firm for March through August. Simpson Glove Company Cash Receipts Schedule February March April May July January June August Credit sales In month of sale One month after sale Two months after sale Total cash receipts Wright Lighting Fixtures forecasts its sales in units for the next four months as follows: March 19,000 21,000 18,500 April May June 17,000 Wright maintains an ending inventory for each month in the amount of two times the expected sales in the following month. The ending inventory for February (March's beginning inventory) reflects this policy. Materials cost $6 per unit and are paid for in the month after production. Labor cost is $10 per unit and is paid for in the month incurred. Fixed overhead is $18,500 per month. Dividends of $21,300 are to be paid in May. The firm produced 18,000 units in February Complete a production schedule and month is equal to sales plus desired ending inventory minus beginning inventory. summary of cash payments for March, April, and May. Remember that production in any one Wright Lighting Fixtures Production Schedule April May March June Projected unit sales Desired ending inventory Total units required Beginning inventory Units to be produced