value: 2.00 points Convex Mechanical Supplies produces a product with the following costs as of July 1, 20x1: Material $ 4 Labor 2 Overhead 1 $ 7 [ Beginning inventory at these costs on July 1 was 8,800 units. From July 1 to December 1, Convex produced 21,500 units. These units had a material cost of $9 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory awounting. 3. Assuming that Convex sold 23,500 units during the last six months of the year at $18 each. what would gross profit be? b. What is the value of ending inventory? Ending inventory I I value: 2.00 polnts The Bradley Corporation produces a product with the following costs as of July 1, 20x1 : Material $4 per unit Labor 2 per unit Overhead 2 per unit ' Beginning inventory at these costs on July 1 was 3,900 units. From July 1 to December 1, 20X1, Bradley produced 13,800 units. These units had a material cost of $5, labor of $6, and overhead of $4 per unit. Bradley uses LIFO inventory accounting. a. Assuming that Bradley sold 16,600 units during the last six months of the year at $20 each, what is its gross prot? b. What is the value of ending inventory/.7 Ending inventory I Value: 4.00 points Watt's Lighting Stores made the following sales projection for the next six months. All sales are credit sales. March $53,000 June $57,000 April 59,000 July 65,000 May 48.000 August 67,000 ' Sales in January and February were $56,000 and $55,000, respectiver Experience has shown that of total sales, 10 percent are uncollectible, 35 percent are collected in the month of sale, 45 percent are collected in the following month, and 10 percent are collected two months after sale. a. Prepare a monthly cash receipts schedule for the rm for March through August. Watt's nghtlng Stores Cash Receipts Schedule May Credit sales In month of sale One month after sale Two months after sale Total cash receipts $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 value: 4.00 points The Volt Battery Company has forecast its sales in units as follows: January 1,600 May 2,150 February 1,450 June 2,300 March 1,400 July 2,000 April 1,900 ' Volt Battery always keeps an ending inventory equal to 140% of the next month's expected sales. The ending inventory for December (January's beginning inventory) is 1,760 units, which is consistent with this policy. Materials cost $11 per unit and are paid for in the month after purchase. Labor cost is $4 per unit and is paid in the month the cost is incurred. Overhead costs are $10,000 per month. Interest of $8,800 is scheduled to be paid in March, and employee bonuses of $14,000 will be paid in June. a. Prepare a monthly production schedule for January through June. Volt Battery Company Summary of Cash Payments Projected unit sales Desired ending inventory Total units required 0 0 0 O 0 0 Beginning inventory Unis to be produced 0 0 0 O 0 0 b. Prepare a monthly summary of cash payments for January through June. Volt produced 1,400 units in December. Volt Battery Company Summary of Cash Payments Units produced Material cost Labor 00$? Overhead cost Interest Employee bonuses Totalcash payments $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 5.00 polnts Harry's Carryout Stores has eight locations. The rm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will nanoe construction ifthe rm can present an aocepiable three-month nancial plan for January through March. The iollowing are actual and iorecasted sales gures: WEI Forecast Additional Information November $520,000 January $600,000 April iorecest $500,000 December 540.000 February 540,000 Mardl 510.000 0f the nuns sales, 50 percent are for cash and the remaining 50 percent are on credit. of credit sales. 50 percent are paid in the month enter sale and 50 percent are paid in the second month enter the sales Materials cost 40 percent of sales and are purchased and received each month in an amount sufcient to cover the following month's expected sales. Materials are paid for in the month alter they are received. Labor expense is 30 pendent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is also paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes Of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly rash receipts for January, February, and March. Harry's convent sums Cash Receipts Schedule Nwomher December January Flhmary March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receips $ 0 s a s o ht Prepare a schedule of monthly cash payments for January. February. and March. Hsny's carryout Stores cuh Payments Schedule January February Maren Payments tor puronasss Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments c. Prepare a monthly cash budget with bonowlngs and repayments for January. February. and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.) Harry's carryout stom Cash Payments Schedule Total cash receipts Total cash payments Net Cash ow Beginning cash balance Cumulative cash balance Monthly loan (or repayment) Ending cash balance 0 Cumulative loan balance value. 2.00 polnts The Manning Company has nancial statements as shown next. which are representative of the company's historical average The rm is expecting a 30 percent increase in sales next year. and management is oonoemed about the company's need for external funds, The increase in sales is expected to be carried out without any expansion or xed assets. but rather through more efcient asset utilization in the existing store. Among liabilities, only ourrent liabilities vary directiy with sales. lnoolnn Stat-mam Sales 3 220.000 Expenses 158.000 Earnings before interest and taxes 5 62.000 |nieres1 9.400 Earnings before taxes $ 52.800 Taxes 17.400 Esmings after taxes 3 35.200 Dividends . Ealanoe Sheet Assam Liabililies and Sbckholdere' Equity Cash 3 5.000 Accounts pawbie 3 25.700 Accounts rBDeivable 61.000 Accrued Mges 2.400 Inventnry 77.000 Accrued taxes 4.900 Cun'ent assets 5 143.000 Cun'ent liabilities 5 33.000 Fixed assets 89.000 Notes payable 9.400 Long-term debt 27 .000 Common stodt 125,000 Retained earnings 34.600 Total 555m 5 232.000 Total liabilities and stockholders equity 5 232,000 Using the peroentofsales method, determine whether the company has external nancing needs, or a surplus of funds. (Hint: A prot margin and payout ratio must be found from the inoome statement.) (Do not round intermediate calculations.) m value: 2700 polnts The Hamlet! Corporation manufactures baseball has with Pudge Rodriguez's autograph stamped on them. Each bat sells for $61 and has a variable cost of $32. There are $43,790 in xed costs involved in the production process. a. Compute the break-even point in units. Break-even point :units [1. Find the sales (in units) needed to earn a prot of $21,170l Sales quantity needed :| units value: 2.00 points Eaten Toni Campany has xed costs 0f$353.400, sells its units fur $82, and has variable 005's Hf $44 per unit. I. Compule (he break-even point. Break-even point lunlls o. Me. Eaton ournee up with a new plan to cut xed oasis to szaomo. However, more labur will naw be required, which will increase variable oosia per unii in $41. The sales prioe will remain 31362. What is me new break-even pninl'? (Round your answer io are nnamt whole nurnlmi New bleak-even poiniEIuniis 1:. Under the new plan, what ls Ilkely to happen lo pmtebility at very hlgh volume levels (compared In lhe old plan)? " Profitability will be less \" Profabilily will be more \f11 . value: 2.00 points lntemaunal Data Systems' iniormaon on revenue and costs is relevant only up to a sales volume (121,000 uniis. After 121 Y000 units, ihe market becomes saturated and me price per unit falls from 310.0010 $6.80. Also, there are cost overruns at a pmdumion volume ofover121,000 units, and wriabie 0061 per unii goes up from $5.00 to $5.25. Fixed 0051.5 remain the same at $71,000. I. Compute oparaiing income at 121 ,000 uniis. Opelang income E b. Compute operating income 51221.00!) units. Operating income [ c-2. If the market price for common stock rose to $10 before the restmcturing, which plan would then be most attractive? @Hmo @HmE A' Current Plan IIEWA, nAzAAAJAAA AHAALn \"ALA",AAAA \f17- value' 4.00 points Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales 3 6,000,000 Variable costs (50% or sales) 3,400,000 Fixed costs 1,900,000 Earnings beinre interest and taxes (EBIT) 3 1,420,000 Interest (10% cost) 560,000 Earnings before taxes (EBT) s 300.000 Tax (30%) 250.000 Earnings siier taxes (EAT) 3 Shares oi common stock Earnings per share 3 The company is currently nanced with 50 percent debt and 50 percent equity (common stock, par Value of $10). In order to expand the lacililies, Mr. Delsing estimates a need for $3.8 million in additional nancing. His investment banker has laid out three plans (or him to consider: 1. Sell $3.8 million of debt at 14 percent. 2. Sell $3.8 million of common stockat $20 per share. 3. Sell $1.90 million at debt at 13 perwnt and $1.90 million of common stock at $25 per share. Variable oosts are expecled to stay at 50 peroent of sales. while fixed expenses will increase to $2,480,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.90 million per yearior the next ve years. Delsing is interested in a thorough analysis of his expansion plans and methods of nancing.He would like you to analyze the following: a. The break-even point for operating expenses before and alter expansion (In sales dollars). (Enter your answers in dollars not in millions, Le, $1,234,567.) Break-Evan Point Before expansion After expansion b. The degree of operating leverage before and ether expansion. Assume sales of $6.8 million before expansion and $7.8 million aflier expansion, Use the fonnule: DOL = (S - TVC)/ (S - TVC - F0). [Round your answers to 2 decimal places.) Before expansion After expansion c~1. The degree of nancial leverage before expansion. (Round your answers to 2 decimal places.) Degree otnancial leverage [ oz. The degree of nancial leverage (or all three methods sitter expansion. Assume sales of $7.8 million for this question. (Round your answers to 2 decimal places.) Mgr.- at Financial Lev-rug. 100% Debt 100% Equity 50% Debt 0. 50% Equity d. Compute EPS under all three methods of nancing the expansion al $7.8 million in sales (rst year) and $10.7 million in sales (last year)' (Round your answers to 2 decimal places.) Earnings per Share 100% Debt