Question
Open a new Excel workbook and name it 404_Exam1. Then answer each of the following questions on a separate sheet of your Excel workbook. Be
Open a new Excel workbook and name it 404_Exam1. Then answer each of the following questions on a separate sheet of your Excel workbook. Be sure to show all parts of each step of calculations to receive full credit. When finished, upload your completed file.
Question 1
The Solar Clothing Company (SCC) experienced growth in the spring of 2022 as consumer interest in solar clothing soared. To accommodate increasing demand, SCC wants to develop plans for expansion. First, however, SCC needs to determine the cost of goods sold for an average sales period to calculate gross profit margin. Use the SCC cost information below to calculate the cost of goods sold for July 2022.
SCC Cost Information for July 2022
Direct Materials Inventory | July 1, 2022 | $1,350,000 |
Direct Labor | $775,000 | |
Work in Process Inventory | July 31, 2022 | $650,000 |
Finished Goods Inventory | July 1, 2022 | $875,000 |
Direct Materials Purchased | $2,750,000 | |
Factory Overhead | $650,000 | |
Direct Materials Inventory | July 31, 2022 | $700,000 |
Work in Process Inventory | July 1, 2022 | $525,000 |
Finished Goods Inventory | July 31, 2022 | $850,000 |
Question 2
Using the high-low method, compute the variable cost per unit and the total fixed costs of the following Smart Watch Company information from the preceding six months.
Month | Units Produced | Total Costs | |
January | 4,500 | $190,000 | |
February | 5,000 | $210,000 | |
March | 5,200 | $215,000 | |
April | 4,500 | $190,000 | |
May | 4,000 | $175,000 | |
June | 3,000 | $150,000 |
Question 3
Because of Smart Watch Company's extraordinary expansion plan, their fixed costs are expected to skyrocket in the next year due to hiring, long-term asset purchases, and so on. The plant manager expects fixed costs to increase to $3,000,000. It sells watches for $550, and the variable costs for each are $175. Based on this information, your manager asks you to determine the following amounts:
- the break-even point in units,
- the break-even point in sales dollars, and
- the number of units needed to be sold for a profit of $1,200,000.
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