y that the age was unrealistic and impossible to meet with a self- 8. During the month of April, Vane Co, produced and sold 10,000 units of a product Man incurred during April were as follows: 00 units of a product Manufacturing and selling costs Direct materials and direct labor.. Variable manufacturing overhead Fixed manufacturing overhead... Variable selling costs.... $400.000 90,000 20,000 10,000 Assume that direct labor is a variable cost The unit product cost under variable costing was $49 $50 $51 $52 Problems 1. (16 points) Edwards Company has follows: lected sales and production in units for the second quarter of the year as Sales Production - April 30,000 25,000 May 20,000 25,000 June 25,000 30,000 Required: Cash production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all paid in cash) amount to $60,000 per month. The accounts payable balance on March 31 totals $96,000, all of which will be paid in April. Prepare a schedule for each month showing budgeted cash disbursements for Edwards Company b. Assume that all units will be sold on account for $15 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale and the remaining 10% in the second month following the month of sale. Accounts receivable on March 31 totaled $255,000 ($45,000 is the remaining 10% not collected of February in the previous quarter. The rest is the 40% not yet collected from March in the previous quarter March sales were $525,000) Prepare a schedule for each month showing budgeted cash receipts for Edwards Company June April May Production units Cash required per unit Production costs...... Cash disbursements: Production this month (40%) Production prior month (60%)... Selling and administration.. Total disbursements......... nd lower level managers April May Sales units Sales price... Total sales... Cash receipts: February sales March sales ............ April sales May sales June sales Total receipts... 2 (14 Points) Green Enterprises produces a single product The following data were provided by the company for the most recen period: Units in beginning inventory... Units produced Units sold. 8,000 6,000 $15 Variable costs per unit: Manufacturing............ Selling and administrative ...... Fixed costs, in total: Manufacturing... ..... Selling and administrative.... 55 $24,000 $16,000 1. Under variable costing, the unit product cost is: A $20 B. $18 C. $15 D. $22. 2. Under absorption costing, the unit product cost is. A $20 B. $18 C $15 D. $25 For the period above, one would expect the net operating income under absorption costing to be A higher than the net operating income under variable costing Blower than the net operating income under variable costing C. the same as the net operating income under variable costing The relation between absorption costing net operating income and variable costing net operating income cannot determined
