fx F G H K M N A B D E Instructions: In the blue box select the best answer. Q1: Which budget needs to be prepared first? A) S&A budget 5 B) Merchandise purchases budget 6 C) Schedule of expected cash collections from customers D) Sales budget 7 8 9 Q2: It costs Fortune Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1,000 scales at $16 each. Fortune would incur special shipping costs of $2 per scale if the order were accepted. Fortune has sufficient unused capacity to produce the 10 1,000 scales. If the special order is accepted, what will be the effect on net income? 11 A) $2,000 increase 12 B) $2,000 decrease 13 C) $3,000 decrease 14 D) $15,000 Increase 15 Part3 - Pricing (13 maria) Part2 - Cash Budget (16 maria) Formula Sheet Part1 - MCO (6 marks) by $ Calibri 11 *** General 116 M K H N O D + A B D E F 1 G Jesse Custom Machinery needs to set a target price for its new product. 2. The following costs are for the production of 80,000 units. 3 Per unit Total DM $ 20 5 DL $ 40 6 VMOH $ 10 7 FMOH $ 1,400,000 8 V&A $ 5 FS&A $ 1,120,000 10 Donnie has invested $1 million and expects an ROI of 18% 11 12 Required: 13 a) Calculate the profit Donnie wants per unit. (2 marks) 14 b) Calculate the markup on the total cost. (2 marks) 15 c) Calculate the markup on the absorption cost. (3 marks) 16 d) Calculate the markup on the variable cost. (3 marks) 172 e) Calculate the target selling price using each markup (3 marks) 00 F M A B C D E G H JayCo's cash balance on January 1st is $25,000 and they want to keep a minimum balance of at least $10,000 at all times. The company will borrow and repay funds in increments of $1,000 at a interest rate of 8% per annum. All borrowings will be made at the beginning of the quarter, and make all payments at the end of the quarter. There are no cash sales and the beginning balance of receivable is expected to be collected in the 1st quarter and is $133,000. Subsequent collections are 60% in the quarter when sales take place and 35% in the following quarter. The sales forecast for the coming quarters shows the following: 1st quarter $500,000 and 2nd quarter $450,000. Direct materials of $175,000 and $190,000 are purchased and paid for in the 1st and 2nd quarter. Direct labour of $220,000 and $200,000 is incurred and paid for in the 1st and 2nd quarter. Factory overhead of $51,000 will be incurred and paid each quarter. Equipment of $18,000 will be purchased and paid for in first quarter. Required: In good form, prepare a cash budget for the 1st and 2nd quarter
