PROBLEM 1. PART B.

BIG BOB'S BBQ BUSINESS wants to buy a new smoker that costs $137,320.

BIG BOB'S controller estimates that the new smoker will increase cash inflows $40,000 per year. Although there is no salvage value, the estimated life of a smoker is 5 years.

REQUIRED:

What is the machine's internal rate of return?

problem 4

Dewey, Cheatim, and Howe law firm has two divisions located in Poughkeepsie and the following information is available:

a. Net sales were $130,000. $90,000 was attributed to the Not-so-Good Division.

b. Variable costs were $80,000. 40% was attributed to the Good Division.

c. Total separable fixed costs controllable by division managers were $30,000, of which $20,000 applied to the Not-do-Good Division.

d. Total separable fixed costs, not controllable by division managers were $10,000 in the Not-so-Good Division and $4,000 in the Good Division.

e. Unallocated costs were $7,000.

REQUIRED:

1. please explain how i can this answer question create an contribution approach income statement for the entire Dewey, Cheatim, and Howe law firm and each division.

2. Which division manager should receive a bonus? Why?

PROBLEM 3.

Fontana NA Ltd. wants your help in preparing a budget:

Cash Balance, June 30 $50,000

Dividends paid in July 60,000

Cash paid for operating expenses in July 185,500

Depreciation expense in July 12,000

Cash collections on sales in July 510,000

Merchandise purchases paid in July 180,000

Purchase equipment for cash in July 94,500

Fontana NA Ltd. wants to maintain a minimum cash balance of $50,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Interest of 1% per month is paid in cash at the end of each month debt is outstanding. Borrowing and repayment is carried out in multiples of $1,000.

REQUIRED:

please explain how i can this answer question prepare a cash budget for July.