Question 1 (15 points) Teegra Ltd. (TL) makes 2 kinds of scratching posts: Big House and Tiny House, Teegra Ltd.does not make any sales on credit. Tl sells only to the public, and accepts cash and credit cards. Of its sales, 90% are to customers using credit cards, for which TL gets the cash right away, less a 5% transaction fee. Purchases of materials are on account. TL pays 25% the purchases in the period of the purchase and the other 75% in the following period. At the end of March, TL owes suppliers $11.700. During April they plan to purchase $19,400 of direct materials. TL plans to replace equipment in April at a net cash cost of $12,700. Labour, manufacturing overhead and non-manufacturing costs are paid in cash in the month incurred. For April $18,500 of the manufacturing cost and $12,000 of the non-manufacturing costs are depreciation related TL owes $6,200 in income taxes that need to be remitted in April TL currently has a $3,200 loan with a 24% annual interest rate. The interest is paid at the end of each month. If TL has more than 57,500 cash at the end of April it will pay back the loan. TL has cash of $4,500 on hand at the end of March. The following information was available for the month of April Revenue Budget Big House Tiny House Total Units Sold Selling Price Total Revenues 500 $165 $82,500 320 $280 89,600 $172,100 Direct Manufacturing Labour Budget based on $15/hour Units Produced DMLA per unit Total Cost Big House 520 $31,200 Tiny House 305 22,875 Total 554,075 Manufacturing Overhead Budget Machine Setup Costs $7,300 Processing Costs 52,400 Inspection Costs 300 Total $60,000 Non-Manufacturing Costs Budget Salaries Other Fixed Costs Commissions Total $13,500 17,500 1.680 $37,680 Question 1 (15 points) Teegra Ltd. (TL) makes 2 kinds of scratching posts: Big House and Tiny House, Teegra Ltd.does not make any sales on credit. Tl sells only to the public, and accepts cash and credit cards. Of its sales, 90% are to customers using credit cards, for which TL gets the cash right away, less a 5% transaction fee. Purchases of materials are on account. TL pays 25% the purchases in the period of the purchase and the other 75% in the following period. At the end of March, TL owes suppliers $11.700. During April they plan to purchase $19,400 of direct materials. TL plans to replace equipment in April at a net cash cost of $12,700. Labour, manufacturing overhead and non-manufacturing costs are paid in cash in the month incurred. For April $18,500 of the manufacturing cost and $12,000 of the non-manufacturing costs are depreciation related TL owes $6,200 in income taxes that need to be remitted in April TL currently has a $3,200 loan with a 24% annual interest rate. The interest is paid at the end of each month. If TL has more than 57,500 cash at the end of April it will pay back the loan. TL has cash of $4,500 on hand at the end of March. The following information was available for the month of April Revenue Budget Big House Tiny House Total Units Sold Selling Price Total Revenues 500 $165 $82,500 320 $280 89,600 $172,100 Direct Manufacturing Labour Budget based on $15/hour Units Produced DMLA per unit Total Cost Big House 520 $31,200 Tiny House 305 22,875 Total 554,075 Manufacturing Overhead Budget Machine Setup Costs $7,300 Processing Costs 52,400 Inspection Costs 300 Total $60,000 Non-Manufacturing Costs Budget Salaries Other Fixed Costs Commissions Total $13,500 17,500 1.680 $37,680