*10% 0 14:32 20210527112026D6...W4-ACCT7066_2030 - Disimpan ... Question 1 Cotton Co Promotions sells T-shirts imprinted with high school names and logos. Last year (2020) the shirts sold for $20 each, and variable costs were $8.50 per shirt. At this cost structure, the breakeven point was 24,600 shirts. However, the company actually earned $24,840 in net income. This year (2021), the company is increasing its price to $22 per shirt. Variable costs per shirt will increase by 20%, and fixed expenses will increase by $30,980. The tax rate will remain at 40%. Instructions: 1. Prepare a contribution format income statement for last year! 2. How many T-shirts must the company sell this year to break even? 3. How many T-shirts must the company sell this year in order to earn $56,640 in net income? Question 2 The marketing department of Vorco Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 11,000 2nd Quarter 3rd Quarter 12,000 14,000 Budgeted unit sales 4th Quarter 13,000 The selling price of the company's product is $18 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter and 5% of sales are expected to be uncollectible. The beginning balance of account receivable, all which is expected to be collected in the first quarter is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the forth quarter is 1,850 units. Instructions: 1. Prepare the company's sales budget and schedule of expected cash collections! 2. Prepare the company's production budget for the upcoming fiscal year! Question 3 Barney Entertainment Corporation prepared a master budget for the month of Desember 2020 that was based on sales of 200,000 board games. The budgeted income statement for the period is as follows. $2,400,000 Sales Revenue Variable expenses: Direct materials Direct labor $750,000 250,000 Pg. 1 + 10% 14:32 the period is as follows. $2,400,000 Sales Revenue Variable expenses: Direct materials Direct labor $750,000 250,000 pg. 1 520,000 1,520,000 880,000 Variable overhead Total variable expenses Contribution margin Fixed Expenses: Fixed overhead Fixed selling and administrative expenses Total fixed expenses Operating income 220,000 435,000 655,000 $225,000 During November, Barney produced and sold 190,000 board games. Actual results for the month are as follows. $2,185,000 $698,000 215,000 479,000 Sales Revenue Variable expenses: Direct materials Direct labor Variable overhead Total variable expenses Contribution margin Fixed Expenses: Fixed overhead Fixed selling and administrative expenses Total fixed expenses Operating income 1,392,000 793,000 210,000 446,000 656,000 $137,000 Instruction: Make an analysis of activity variances, revenue and spending variances! P82
