Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the les needed for three months' sales. The tiles cost $1.00 each and must be paid for in cash. The company has 27.000 tiles in stock, Sales estimates, based on contracts received, are as follows for the next six months: January February March April May June 11.400 17.500 13.200 14,800 10.000 7 300 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in January February, and March MIDLAND COMPANY Merchandise Purchases Budget For the Period Ended March 31 in units) January February Units to be purchased Estimated cost March Stubs-R-Us is a local event ticket broker. Last year, the company sold 1,000,000 tickets with an average commission of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 7 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts Offsetting these factors is the observation that the average commission per sale is likely to increase by 12 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year. Commission revenues Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to al homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of Subscribers and the average number of calls to each subscriber for the months of interest follow Service calls per subscriber) March April 0.9 May Subscribers 1,050 1,150 1.850 2.050 2050 2 000 June 25 July August The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid In cash $ 19.000 17 000 37 000 $ 73 000 Service costs Variable costs Maintenance and repair Depreciation (fixed) Total Marketing and administrative costs Marketing (variable) Administrative (ed) Total Total costs $ 22.500 89 000 $111 500 $184 500 Variable service and marketing costs change with volume. Fred depreciation will remain the same, but foed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September Service costs Variable costs Maintenance and repair Depreciation (fixed) Total Marketing and administrative costs Marketing (variable) Administrative (fixed) $ 19,000 17,000 37.000 $ 73,000 Total $ 22.500 89.000 $111,500 $184,500 Total costs Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September. Required: Prepare a budgeted income statement for September. (Round Intermediate calculations to 2 decimals places) VARMIT-B-GONE Budgeted Income Statement For the Month of September Service costs: Total service costs Marketing and administrative Total marketing and administrative costs Total costs The Casings Plant of Wyoming Machines makes plastics shells for the company's calculators (Each calculator requires one shell.) For each of the next two years, Wyoming expects to sell 610,000 calculators. The beginning finished goods inventory of shells at the Casings Plant is 100,000 units. However, the target ending finished goods inventory for each year is 25,000 units. Each unit (shell) requires 6 ounces of plastic. At the beginning of the year, 220,000 Ounces of plastic are in inventory Management has set a target to have plastic on hand equal to four months sales requirements. Sales and production take place evenly throughout the year Required: a. Compute the total targeted production of the finished product for the coming year. Total targeted production in units b. Compute the required amount of plastic to be purchased for the coming year. (Do not round Intermediate calculations.) Materials to be purchased in ounces Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season and the business is heavily dependent on the weather and the economy in addition to new competition. Sanjana Sweet, the owner, prepares a budget each year after reading long-term weather forecasts and estimates of summer tourism. The budget is a first step in planning whether she will need any loans and whether she needs to consider adjustments to store staffing. Based on expertise and experience, she develops the following: Gross Margin per Customer Scenario Good Fair Poor Price - Cost of Goods) $6.1 5.1 Number of Customers 41.000 31,000 26.000 Sanjana assumes, for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $36,000 plus $2 for every customer in excess of 31,000. The marketing and administrative costs are estimated to be $12,100 plus 3 percent of the gross margin Required: Prepare an analysis of the possible operating income for Sanjana similar to that in Ext 13.15. What is the range of operating incomes? Gross Margin Number of Customers Operating Costs Marketing & Admin Operating Profit (Loss) Poor 25 000 25,000 Good Poor Fair Good Poor 31,000 41,000 41.000 41.000 Good