Question
1. Haywood Company has fixed costs of $30,000 per month. Highest production volume during the year was in January when 110,000 units were produced, 90,000
1. Haywood Company has fixed costs of $30,000 per month. Highest production volume during the year was in January when 110,000 units were produced, 90,000 units were sold, and total costs of $650,000 were incurred. In June, the company produced only 60,000 units. What was the total cost incurred in June?
a | $537,600 |
b | $433,333 |
c | $650,000 |
d | $368,400 |
5. Fedor, Inc. has prepared the following direct materials purchases budget:
Month | Budgeted DM Purchases |
June | $67,000 |
July | 77,000 |
August | 76,300 |
September | 78,000 |
October | 70,200 |
All purchases are paid for as follows: 40% in the month of purchase, 50% in the following month, and 10% two months after purchase. Calculate total budgeted cash payments made in October for purchases.
a | $46,630 |
b | $67,080 |
c | $74,710 |
d | $35,710 |
6. Infinity Clock Company prepared the following static budget for the year:
Static Budget |
|
|
Units/Volume |
| 5000 |
| Per Unit |
|
Sales Revenue | $7.00 | $35,000 |
Variable Costs | 1.00 | 5000 |
Contribution Margin |
| 30,000 |
Fixed Costs |
| 3000 |
Operating Income/(Loss) |
| $27,000 |
If a flexible budget is prepared at a volume of 7800 units, calculate the amount of operating income. The production level is within the relevant range.
a | $7800 |
b | $27,000 |
c | $43,800 |
d | $3000 |
16. Pearl, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $45,000 in January, $55,000 in February, and $65,000 in March. Variable and fixed selling and administrative expenses are as follows:
Variable Expenses:
Power cost (20% of sales)
Miscellaneous expenses: (10% of sales)
Fixed Expenses:
Salaries expense: $6000 per month
Rent expense: $5000 per month
Depreciation expense: $1400 per month
Power cost/fixed portion: $600 per month
Miscellaneous expenses/fixed portion: $1200 per month
Calculate total budgeted selling and administrative expenses for the month of January.
a | $13,500 |
b | $27,700 |
c | $33,700 |
d | $30,700 |
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