just need help with problems: 10F & 10G
AND 11-13
9. Calculate the break-even point in units and in sales dollars. 10. Prepare the following budgets for the month of December 2013. CA-28 10.000 ARMSTRONG HELMET case 7 Cases for Management Decision-Making COMPANY Production and Sales Data Number of helmets produced Expected sales in units for December ($40 unit sales price) Expected sales in units for January Desired ending inventory Direct materials per finished unit Direct materials cost Direct labor hours per unit Direct labor hourly rate Cash Flow Data 8,000 10,000 20% of next month's sales 1 kilogram $7 per kilogram 35 $20 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. Instructions Using the data presented above (including data on page CA-27), do the following. 1. Classify the costs as either product costs or period costs using a five-column table as shown below. Enter the dollar amount of each cost in the appropriate column and total each classification Product Costs Direct Direct Manufacturing Item Materials Labor Overhead Period Costs 2. Classify the codes as either variable or fixed costs. Assume there are no mixed costs. Enter the dollar amount of each cost in the appropriate column and total each classifi- cation. Use the format shown below. Assume that Utility costs---factory are a fixed cost. Variable Fixed Total Item Costs Costs Costs 3. Prepare a schedule of cost of goods manufactured for the month of December 2013. 4. Determine the cost of producing a helmet. 5. Identify the type of cost accounting system that Armstrong Helmet Company is prob- ably using at this time. Explain. 6. Under what circumstances might Armstrong use a different cost accounting system? 7. Compute the unit variable cost for a helmet. S. Compute the unit contribution margin and the contribution margin ratio. (a) Sales (b) Production (c) Direct materials. (d) Direct labor (c) Selling and administrative expenses. (Budgeted income statement. (1) Cash Case 7 HELMES Armstrong Helmet Company Developed by Dick Wasson, Southwestern College -0- The Business Situation Armstrong Helmet Company manufactures a unique model of bicycle helmet. The company began operations December 1, 2013. Its accountant quit the second week of operations, and the company is searching for a replacement. The com- pany has decided to test the knowledge and ability of all candidates interviewing for the position. Each candidate will be provided with the information below and then asked to prepare a series of reports, schedules, budgets, and recommenda- tions based on that information. The information provided to each candidate is as follows. Cost Items and Account Balances Administrative salaries $15,500 Advertising for helmets 11,000 Cash, December 1 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 Property taxes on factory building 400 Raw materials used 70,000 Rent on production equipment 6,000 10,000 40,000 900 70,000 -0- -0- -0- -0- 500 Research and development Sales commissions Utility costs-factory Wages---factory Work in process, December 1 Work in process, December 31 Raw materials inventory, December Raw materials inventory, December 31 Raw material purchases Finished goods inventory, December 1 70,000 -0- 10. (1) ARMSTRONG HELMET COMPANY Cash Budget For the Month Ended December 31, 2006 Beginning cash balance Add: Receipts Collections from customers Total receipts Total available cash Less: Disbursements Direct materials Direct labor Manufacturing overhead Selling and administrative expenses Total disbursements Excess (deficiency) of available cash over disbursements Financing: Borrowing Ending cash balance Name 10. (g) ARMSTRONG HELMET COMPANY Budgeted Income Statement For the Month Ended December 31, 2006 Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Income tax expense Net income DI 11. 10,000 ARMSTRONG HELMET COMPANY Monthly Flexible Manufacturing Costs Budget For the Month Ended December 31, 2006 Activity level 8000 9.000 Production in units Variable costs Raw materials 56,000 63,000 Wages 56,000 63,000 Miscellaneous Total variable costs Fixed costs Total fixed costs Total costs 70,000 70,000 12. 13. Based on the reports, schedules, and budgets you have completed, what recommendations would you make to the managers of Armstrong Helmet Company? 9. Calculate the break-even point in units and in sales dollars. 10. Prepare the following budgets for the month of December 2013. CA-28 10.000 ARMSTRONG HELMET case 7 Cases for Management Decision-Making COMPANY Production and Sales Data Number of helmets produced Expected sales in units for December ($40 unit sales price) Expected sales in units for January Desired ending inventory Direct materials per finished unit Direct materials cost Direct labor hours per unit Direct labor hourly rate Cash Flow Data 8,000 10,000 20% of next month's sales 1 kilogram $7 per kilogram 35 $20 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. Instructions Using the data presented above (including data on page CA-27), do the following. 1. Classify the costs as either product costs or period costs using a five-column table as shown below. Enter the dollar amount of each cost in the appropriate column and total each classification Product Costs Direct Direct Manufacturing Item Materials Labor Overhead Period Costs 2. Classify the codes as either variable or fixed costs. Assume there are no mixed costs. Enter the dollar amount of each cost in the appropriate column and total each classifi- cation. Use the format shown below. Assume that Utility costs---factory are a fixed cost. Variable Fixed Total Item Costs Costs Costs 3. Prepare a schedule of cost of goods manufactured for the month of December 2013. 4. Determine the cost of producing a helmet. 5. Identify the type of cost accounting system that Armstrong Helmet Company is prob- ably using at this time. Explain. 6. Under what circumstances might Armstrong use a different cost accounting system? 7. Compute the unit variable cost for a helmet. S. Compute the unit contribution margin and the contribution margin ratio. (a) Sales (b) Production (c) Direct materials. (d) Direct labor (c) Selling and administrative expenses. (Budgeted income statement. (1) Cash Case 7 HELMES Armstrong Helmet Company Developed by Dick Wasson, Southwestern College -0- The Business Situation Armstrong Helmet Company manufactures a unique model of bicycle helmet. The company began operations December 1, 2013. Its accountant quit the second week of operations, and the company is searching for a replacement. The com- pany has decided to test the knowledge and ability of all candidates interviewing for the position. Each candidate will be provided with the information below and then asked to prepare a series of reports, schedules, budgets, and recommenda- tions based on that information. The information provided to each candidate is as follows. Cost Items and Account Balances Administrative salaries $15,500 Advertising for helmets 11,000 Cash, December 1 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 Property taxes on factory building 400 Raw materials used 70,000 Rent on production equipment 6,000 10,000 40,000 900 70,000 -0- -0- -0- -0- 500 Research and development Sales commissions Utility costs-factory Wages---factory Work in process, December 1 Work in process, December 31 Raw materials inventory, December Raw materials inventory, December 31 Raw material purchases Finished goods inventory, December 1 70,000 -0- 10. (1) ARMSTRONG HELMET COMPANY Cash Budget For the Month Ended December 31, 2006 Beginning cash balance Add: Receipts Collections from customers Total receipts Total available cash Less: Disbursements Direct materials Direct labor Manufacturing overhead Selling and administrative expenses Total disbursements Excess (deficiency) of available cash over disbursements Financing: Borrowing Ending cash balance Name 10. (g) ARMSTRONG HELMET COMPANY Budgeted Income Statement For the Month Ended December 31, 2006 Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Income tax expense Net income DI 11. 10,000 ARMSTRONG HELMET COMPANY Monthly Flexible Manufacturing Costs Budget For the Month Ended December 31, 2006 Activity level 8000 9.000 Production in units Variable costs Raw materials 56,000 63,000 Wages 56,000 63,000 Miscellaneous Total variable costs Fixed costs Total fixed costs Total costs 70,000 70,000 12. 13. Based on the reports, schedules, and budgets you have completed, what recommendations would you make to the managers of Armstrong Helmet Company
