Use File Attached 2.) Burien allocates building depreciation, maintenance, and utilities on the basis of square footage. Office expenses are allocated on the basis of sales. Management is considering an expansion to a three-department operation. The proposed Department C would generate $120,000 in additional sales and have a 17.5% contribution to overhead. The company owns its building. Opening Department C would redistribute the square footage to each department as follows: A, 19,040; B, 21,760 sq. ft.; C, 13,600. Increases in indirect expenses would include: maintenance, $500; utilities, $3,800; and office expenses, $1,200. Complete the following departmental income statements, showing projected results of operations for the three sales departments. (Round amounts to the nearest whole dollar.) Also show your calculations for the allocation of indirect expenses in the tables below the Departmental Income Statement. 3.) Hess Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000 and variable costs are $7 per unit. Hess can buy a newer production machine that will increase total fixed costs by $22,800 but variable costs will be decreased by $0.40 per unit. REQUIRED: Calculate the current break-even point in units and the break-even point in units if the new production machine is purchased. Show your answers in the spaces provided and use the space below the answer blocks to show your calculations. 4.) Slim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly on the loan balance at the end of the previous month). Loans are repaid at month's end from any excess cash. The cash balance on July 1 is $8,400. Cash receipts other than for loans received for July, August, September are forecasted as $24,000, $32,000, and $40,000, respectively. Payments other than for loan or interest payments for the same period are planned at $28,000, $30,000, and $32,000, respectively. At July 1, there are no outstanding loans. REQUIRED: Prepare a cash budget for July, August, and September. Use the template below for your answer. Extra Credit attached

FUNDAMENTAL ACCOUNTING PRINCIPLES II ACC 212 (SP11) FINAL EXAM-PART II QUESTION 1 (10 POINTS) SCORE: Match the following terms or phrases (A through J) with the definitions below (1 through 10) by placing the appropriate letter in the space beside the matching definition. A Contribution margin per unit B Fixed cost C Mixed cost D Curvilinear cost E Variable cost F Step-wise cost G Relevant range of operations H Estimated line of cost behavior I Least-squares regression J Cost-volume-profit analysis 1. A cost that remains constant over limited ranges of volumes of activities but changes by a lump sum when volume changes occur outside these limited ranges. 2. The amount that the sale of one unit contributes toward recovering fixed costs and earning profits. 3. A cost that remains unchanged in total amount even when the volume of activitiy varies. 4. A cost that includes both fixed and variable costs. 5. A cost that changes in proportion to changes in volume of activity 6. A statistical method for deriving an estimated line of cost behavior that is more precise that the high-low method or a scatter diagram. 7. Useful in business planning; includes predicting the volume of activity, the costs incurred, sales earned, and profits received. 8. A company's normal operating range; excludes extremely high and low volumes that are not likely to be encountered 9. A cost that changes with volume, but not at a constant rate. 10. A line drawn on a graph to fit the past relation between cost and sales. PRINCIPLES OF ACCOUNTING II ACC 212 (SP11) FINAL EXAM-PART II QUESTION 2 (20 POINTS) SCORE Burien, Inc., operates a retail store with two departments, A and B. Its departmental income statement for the current year follows: BURIEN, INC. Departmental Income Statement For Year Ended December 31 Dept. A Dept. B Sales $180,000 $200,000 Direct expenses 129,900 142,870 Contributions to overhead $50,100 $57,130 Indirect expenses: Depreciation--Building 10,000 11,760 Maintenance 1,600 1,700 Utilities 6,200 6,320 Office expenses 1,800 2,000 Total indirect expenses $19,600 $21,780 Net income $30,500 $35,350 Combined $380,000 272,770 $107,230 21,760 3,300 12,520 3,800 $41,380 $65,850 Burien allocates building depreciation, maintenance, and utilities on the basis of square footage. Office expenses are allocated on the basis of sales. Management is considering an expansion to a three-department operation. The proposed Department C would generate $120,000 in additional sales and have a 17.5% contribution to overhead. The company owns its building. Opening Department C would redistribute the square footage to each department as follows: A, 19,040; B, 21,760 sq. ft.; C, 13,600. Increases in indirect expenses would include: maintenance, $500; utilities, $3,800; and office expenses, $1,200. Complete the following departmental income statements, showing projected results of operations for the three sales departments. (Round amounts to the nearest whole dollar.) Also show your calculations for the allocation of indirect expenses in the tables below the Departmental Income Statement. BURIEN, INC. Departmental Income Statement (Pro Forma) For Year Ended December 31 Dept. A Dept. B Dept. C Combined Sq. Ft. Percent Depreciation Allocated Maintenance Allocated Percent Office Expense Allocated Sales Direct expenses Contributions to overhead Indirect expenses: Depreciation-building Maintenance Utilities Office expenses Total indirect expenses Net income Indirect Expense Allocations: Department A B C Total Department A B C Total Sales Utilities Allocated PRINCIPLES OF ACCOUNTING II ACC 212 (SP11) FINAL EXAM-PART II QUESTION 3 (15 POINTS) SCORE Hess Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000 and variable costs are $7 per unit. Hess can buy a newer production machine that will increase total fixed costs by $22,800 but variable costs will be decreased by $0.40 per unit. REQUIRED: Calculate the current break-even point in units and the breakeven point in units if the new production machine is purchased. Show your answers in the spaces provided and use the space below the answer blocks to show your calculations. Current Break-Even Point (in Units) Calculations: New Break-Even Point (in Units) Calculations: PRINCIPLES OF ACCOUNTING II ACC 212 (SP11) FINAL EXAM-PART II QUESTION 4 (15 POINTS) SCORE Slim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly on the loan balance at the end of the previous month). Loans are repaid at month's end from any excess cash. The cash balance on July 1 is $8,400. Cash receipts other than for loans received for July, August, September are forecasted as $24,000, $32,000, and $40,000, respectively. Payments other than for loan or interest payments for the same period are planned at $28,000, $30,000, and $32,000, respectively. At July 1, there are no outstanding loans. REQUIRED: Prepare a cash budget for July, August, and September. Use the template below for your answer. SLIM CORP. Cash Budget July - September July Beginning balance Cash receipts Cash disbursements Interest paid Preliminary balance Loan advances Loan repayments Ending balance Loan balance, end of month August September PRINCIPLES OF ACCOUNTING II ACC 212 (SP11) FINAL EXAM-PART II EXTRA CREDIT (10 POINTS) SCORE: Thomas Co. provides the following fixed budget data for 2009: Sales (20,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses Fixed Variable Income from operations $600,000 $200,000 160,000 60,000 80,000 $12,000 40,000 Budgeted 500,000 $100,000 52,000 $48,000 The company's actual activity for 2009 follows: Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations $651,000 $231,000 168,000 73,500 77,500 $12,000 39,500 THOMAS COMPANY Flexible Budget Performance Report For the Year Ended December 31, 2009 550,000 $101,000 51,500 $49,500 REQUIRED: Prepare a flexible budget performance report for the year using the contribution margin format. Use the template at the right for your answer. Units Sales Variable costs: Direct materials Direct labor Variable overhead Variable operating expenses Total variable costs Contribution margin Fixed costs: Fixed overhead costs Fixed operating expenses Total fixed costs Income from operations Actual Variance Favorable (F) or Unfavorable (U)