Please help with these questions in preparation for my final. I am having trouble with the calculations. There are (3) separate exercises containing more than one response for each...
Exercise 7 At the beginning of the period, Canaan Company estimated that sales would be 5,000 units. Actual sales totaled 7,000 units. The manager was very excited about the unexpected additional income that the extra 2,000 units would produce. Imagine her surprise upon seeing the following report: Number of units Sales Less variable costs: Materials Labor Overhead Selling & admin. Contribution margin Less fixed costs: Manufacturing Selling & admin Net income Static Budget 5,000 Actual Results 7,000 $250,000 $300,000 60,000 50,000 25,000 10,000 $105,000 82,000 67,000 36,000 15,000 $100,000 15,000 30,000 $ 60,000 16,000 28,000 $56,000 The company's owner is very upset charging that the manager did a lousy job of controlling costs. Required. 1.) Prepare a performance report that can be used to evaluate the owner's charge that the manager did a poor job of controlling costs. Be sure to label variances as favorable or unfavorable. 2.) Is the owner justified in charging the manager with poor cost control? Why or why not? Exercise 8 Referring to the following information, answer questions 1-4 Tractor Trailer Company has the following information Month Budgeted Sales April $154,000 May $160,000 June $142,000 July $136,000 Budgeted Expenses per month are: Wages $28,000 Advertising $27,200 Depreciation $19,000 Rent $20,400 Freight Out (S&A Expense) 20% of Sales Other 8% of Sales Note: All cash expenses are paid when incurred. Cash is collected from customer in the following manner: Month of Sale 30% Mo following Sale 50% 2 mos following sale 18% Not Collected 2% The beginning cash balance on April 1st is $35,000, cash anticipated to be collected in April from prio month's sales is $145,000. The total cash disbursements for May are: Answer $121,000 $139,400 $140,000 $120,400 Total Cash collected in June is Answer $150,320 $42,600 $107,720 $125,000 The total cash collected for May from May sales is Answer $48,000 $80,000 $93,096 $42,600 The ending cash balance as of April 30th is Answer $88,480 $105,800 $40,600 $107,480 Exercise 9 EPI is considering eliminating a product from it Toddle Town Tours collection. This CD collection is aimed a children one to three years of ages and includes \"tours\" of hypothetical towns. Two products, the Pet Tore Parade and The Grocery Getaway have impressive sales, the sales for the third Post Office Polka have lagged the others. Several other CDs are planned for the collection, but none are ready for production. The following is the information related to the currently available three products. Pet Store Parade Grocery Getaway Post Office Polka Sales Revenue $50,000 $45,000 $15,000 $110,000 Variable Costs 23,000 19,000 10,000 52,000 Cont. Margin 27,000 26,000 5,000 58,000 4,800 3,100 1,500 9,400 14,400 12,960 4,320 31,680 Less Direct Fixed Costs Non-Direct Common Fixed Costs* Total Net Profit $7,800 *allocated based on total sales dollars $9,940 $(820) EPI has determined that elimination of the Post Office Polka (POP) will not impact the sales of the other two products. The remaining fixed overhead currently allocate d to POP production would be redistributed to the remaining two products, until a new product could be brought on line. Required: 1. Determine would happen to the company's total profit and then to the individual remaining products if EPI were to drop the POP product line? Would you recommend or not? 2. Suppose $3,700 of the Non-Direct Common Fixed could be avoided if the POP product line were eliminated. Would your recommendation change, why or why not? $16,920
