(7 points-Show calculations on Excel for all problems) Raghu's Hobbies produces and sells a luxury animal pillow for $40 per unit. In the first month of operation, 3,000 units were produced and 2,250 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs $19 per unit Variable marketing costs $ 1 per unit Fixed manufacturing costs $30,000 per month Administrative expenses, all fixed $6,000 per month Ending inventories: Direct materials inventory None WIP inventory None Finished goods inventory 750 units What is operating income when using absorption costing? Select one: O a. ($11.750) O b. $4,000 O c. $16,500 O d. $18,750 O e. $22,500 (7 points-Show calculations on Excel) Guilford Corp. began operations on January 1 of the current year with a $12,000 cash balance. Forty percent of sales are collected in the month of sale: 60% are collected in the month following sale. Similarly, 20% of purchases are paid in the month of purchase, and 80% are paid in the month following purchase. The following data apply to January and February: February $ 55,000 Sales January $ 35,000 30,000 7,000 Purchases 40,000 Operating expenses 9,000 If operating expenses are paid in the month incurred and include monthly depreciation charges of $2,500, determine the change in Gulford's cash balance during February. Select one: O a. $2,000 increase Ob. $4,500 increase. O c. $5,000 increase. O d. $7,500 increase. Oe. No increase occurred. (7 points-Show calculations on Excel) Rockingham, Inc. purchased 56,000 pounds (cost = $420,000) of direct material to be used in the manufacture of the company's sole product. According to the production specifications, each completed unit requires five pounds of direct material at a standard cost of $7.80 per pound. Direct materials consumed by the end of the period totaled 53,500 pounds in the manufacture of 10,900 finished units. An examination of Rockingham's payroll records revealed that the company worked 22,000 labor hours (cost = $319,000) during the period, and specifications called for each completed unit requiring two hours of labor at a standard cost of $14.80 per hour. Use the information to compute the following variances. Rockingham's direct-material price variance was Select one: O a. $16,050 F Ob. $16,050 U Oc. $16,800 F Od, $16,800 0 Oe. None of the answers is correct. Frugal Dollar Retail operates a retail store in Phoenix, Las Vegas, and Portland. The following information relates to the Phoenix facility: The store sold 65,000 units at $18.00 each, after having purchased the units from various suppliers for $12.50. Phoenix salespeople are paid a 5% commission based on gross sales dollars. Phoenix's sales manager oversees the placement of local advertising contracts, which totaled $54,000 for the year. Local property taxes amounted to $14,500. The sales manager's $65,000 salary is set by Phoenix's store manager. In contrast, the store manager's $134,000 salary is determined by Frugal Dollar's vice president. Phoenix incurred $6,800 of other noncontrollable costs. Nontraceable (common) corporate overhead totaled $68,000. Frugal Dollars's corporate headquarters is located in Portland, and the company uses responsibility accounting to evaluate performance. The income amount to use in evaluating the performance of the Phoenix store's manager is: Select one: O a. $299,000. Ob. $180,000. O c. $24,700. O d. ($43,300) O e. $1,170,000. (7 points-Show calculations on Excel) Soft Cushion Company is highly decentralized. Each division is empowered to make its own sales decisions. The Assembly Division can purchase stuffing, a key component, from the Production Division of from external suppliers. The Production Division has been the major supplier of stuffing in recent years. The Assembly Division has announced that two external suppliers will be used to purchase the stuffing at $20 per pound for the next year. The Production Division recently increased its unit price to $40. the manager of the Production Division presented the following information- variable cost $32 and fixed cost $8--to top management in order to attempt to force the Assembly Division to purchase the stuffing internally. The Assembly Division purchases 20,000 pounds of stuffing per month. What would be the monthly operating advantage (disadvantage) of purchasing the goods internally, assuming the external supplier increased its price to $50 per pound and the Production Division is able to utilize the facilities for other operations, resulting in a monthly cash-operating savings of $30 per pound? Select one: O a. $1,000,000 O b. $360,000 O c. ($240,000) O d. ($400,000) Oe. ($600,000) (7 points-Show calculations on Excel) O'Kelly Manufacturing has 31,000 labor hours available for producing M and N. Consider the following information: Product M Product N 2 3 Required labor time per unit (hours) Maximum demand (units) Contribution margin per unit Contribution margin per labor hour 8,000 6,500 $ 5 $ 5.70 $ 2.50 $ 1.90 If O'Kelly follows proper managerial accounting practices in terms of setting a production schedule that maximizes profits, much contribution margin would the company expect to generate? Select one: O a. $31,450. b. $63,100. O c. $66,700. O d. $78,100. Oe. $109,550. $ 1 10 points-Show calculations on Excel) Stephans Corporation currently manufactures a sub-assembly for its main product. The costs per unit are as follows: Direct materials Direct labor Vanable overhead Fixed overhead Bill Company has contacted Stephans with an offer to sell them 5,000 of the sub-assemblies for $22 each. Stephans will eliminate $25,000 of fixed overhead if it accepts the proposal. Should Stephans make or buy the sub-assemblies? What is the difference between the two alternatives? 5 8 Select one: O a. Buy: savings $20,000 Ob. Buy: savings $50,000 O c. Make; savings =$60,000 Od. Make; savings=$5,000 Oe. None of the answers are correct