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Part II Memo Please help analyze the Memo. Detailed explanation, please. Thank you. Sales:Is the company seasonal or steady during the summer months? Production:Overall budget:
Part II Memo
Please help analyze the Memo. Detailed explanation, please. Thank you.
- Sales:Is the company seasonal or steady during the summer months?
- Production:Overall budget: How does the EI compare to the BI? How does the transferred in costs compare to the COGM (or the transferred) costs? What does this mean about the company's forecasted production
- Regarding the raw materials budget, Direct labor, and Overhead budget:
- What is the mix amount these three costs in COGM?
- What does this mean for the company regarding the primary (if any) cost it should monitor in the future?
- Do you see any glaring similarities or differences among these costs?
- What is the predetermined overhead rate?
- What does the rate indicate regarding the relationship between direct labor and overhead costs?
- Selling Expense Budget:Are these expenses considered significant to you? Why or why not?
- General and Administrative Expense Budget: Are these expenses considered significant to you? Why or why not?
- Cash Flow Statement:
- Does the company have a cash flow problem?
- Do you have any suggestions for the company regarding cash flow?
- What is you analysis of the loan by way of significant or insignificant?
- If the company paying a high interest rate?
- Income Statement:What is the company's gross margin, income margin before tax, and income margin after tax? What is your overall analysis about the income statement? Any overall problems or strengths you want to report?
- Balance sheet (with the income statement):Where do you see potential problems and strengths? Attached is a handout I use when I teach on-campus which you may use to answer the following regarding if the company is:
- Liquid? (see current ratio and acid ratio).
- Solvent? (see debt to equity and debt to total assets).
- Efficient? (See inventory turnover ratio and accounts receivable ratio).
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