Abbott Suit Corporation (ASC) manufactures BOTH nylon AND cotton jogging suits.

On 1/1/20, this was ASCs Balance Sheet

Cash $2,000,000 Accounts payable 0

AR 0 Wages Payable 0

RMI/WIP/FGI 0 Common Stock/APIC $2,000,000

PP&E 0 Retained Earnings 0

Total assets $2,000,000 Liabs. + Owners Equity $2,000,000

On 1/1/20, Erin Rogers ESTIMATES the following costs:

Rent on MANUFACTURING facility $30,000

Salaries for CEO, cost accountant, administrative staff $10,000

Depreciation for machinery $10,000

Interest Expense $10,000

ABBOTT SUIT CORPORATION USES MACHINE HOURS TO ALLOCATE UTILITIES AND INDIRECT LABOR.

Abbott Suit Corporation direct labor hours to allocate rent on manufacturing facility and depreciation on the machinery.

Erin Rogers, UW-M graduate, creates the following standards for the two jogging suits:

	Nylon Jogging Suits		Cotton Jogging Suits
	Std.qty/suit	Std.price/input	Std.qty/suit	Std.price/input
Direct Materials	2 yds/suit	$10/yd	3 yds/suit	$20/yd
Direct Labor	5 dlh/suit	$10/dlh	4 dlh/suit	$5/dlh
VOH utilities/indirect labor	3 mh/suit	$10/mh	4 mh/suit	$10/mh

Abbott Suit Believes that it can sell Nylon Jogging Suits for $500/suit and Cotton Jogging suits for $400/suit. Abbott Suit has a goal operating income of $10,000 and believe that it will sell 3 times as many Cotton jogging suits as nylon jogging suits (that is, for every nylon jogging suit sold, 3x or 3 times that many cotton jogging suits will be sold).

1.Compute how many NYLON and COTTON jogging suits must be sold in order to achieve the goal operating income of $50,000 (SHOW YOUR WORK). On 1/1/20, ASC has the following balances:

2.On 1/1/20, ASC has the following balances:

Cotton Jogging Suits: 0 suits

Nylon Jogging Suits 0 suits

And ASC BUDGETS the following balances for 12/31/20:

Cotton Jogging Suits 200 suits

Nylon Jogging Suits 50 suits

REQUIRED: indicate how many cotton and nylon jogging suits ASC is budgeted to make in 2020

3. Calculate the predetermined FIXED overhead rate (3 pts).

ACTUAL RESULTS FOR THE YEAR/JOURNAL ENTRIES