Cost Items and Account Balances Administrative salaries $15,500 Advertising for helmets 11,000 Cash, December 1 -0- Depreciation on factory building 1.500. Depreciation on office equipment 800 Insurance on factory building 1,500. Miscellaneous expenses-factory 1,000 Office supplies expense 300 Professional fees 500 Property taxes on factory building 400 Raw materials used 70.000 Rent on production equipment 6.000 Research and development 10,000 Sales commissions 40.000 Utility costs factory 900 Wages factory 70.000Work in process, December 1 -0- Work in process, December 31 -0- Raw materials inventory, December 1 -0- Raw materials inventory, December 31 0- Raw material purchases 70.000 Finished goods inventory. December 1 -0- Production and Sales Data Number of helmets produced 10,000. Expected sales in units for December. ($40 unit sales price) 8.000 Expected sales in units for January 10,000 Desired ending inventory 20% of next month's sales Direct materials per finished unit 1 kilogram Direct materials cost $7 per kilogram. Direct labor hours per unit .35 Direct labor hourly rate $20 Cash Flow Data Cash collections from customers: 75% in month of sale andDirect 190of 1 Cash Flow Data Cash collections from customers: 75% in month of sale and 25% the following month. Cash payments to suppliers: 75% in month of purchase and 25% the following month. Income tax rate: 45%. Cost of proposed production equipment: $720,000. Manufacturing overhead and selling and administrative costs are paid as incurred. Desired ending cash balance: $30,000.6. Under what circumstances might Armstrong use a different cost accounting system? 7. Compute the unit variable cost for a helmet. 8. Compute the unit contribution margin and the contribution margin ratio. 9. Calculate the break-even point in units and in sales dollars. 10. Prepare the following budgets for the month of December 2013. (a) Sales. (b) Production. (c) Direct materials. (d) Direct labor. (e) Selling and administrative expenses. (f) Cash. (g) Budgeted income statement. 11. Prepare a flexible budget for manufacturing costs for activity levels between 8,000 and 10,000 units, in 1,000-unit increments. 12. Identify one potential cause of direct materials, direct labor, and manufacturing overhead variances in the production of the helmet. 13. Determine the cash payback period on the proposed production equipment purchase, assuming a monthly cash flow as indicated in the cash budget (requirement 10f)