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hichkok12 [17]
3 years ago
12

Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 30,000 units.

Company policy is to end each month with merchandise inventory equal to 15% of budgeted sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. The company budgets sales of 200,000 units in October. Sales (Units) Purchases (Units) July 180,000 200,250 August 315,000 308,250 September 270,000 259,500 a.Prepare the merchandise purchases budgets for the months of July, August, and September.
Business
1 answer:
agasfer [191]3 years ago
8 0

Answer:

Preparation of merchandise purchases budgets for the months of July, August, and September is shown below:-

Explanation:

                                  Walker Company

                       Merchandises Purchase Budget

                        For July, August , September

                                                             July        August      September

Budgeted ending inventory units        47,250  40,500      30,000

Add: Budgeted unit sales for month  180,000  315,000    270,000

Required units available inventory     227,250  355,500   300,000

Less: Beginning inventory units          27,000   47,250      40,500

Units to be purchased                         200,250  308,250   259,500

Working Note 1

September required units

Ending inventory                         30,000

Add: Budgeted sales                  270,000

Total required in September      300,000

Working Note 2

September Beginning inventory

Total required                               300,000

Less: Budgeted purchases          259,500

September beginning inventory  40,500

Working Note 3

Beginning inventory of September = Ending inventory of August

Working Note 4

August required units

Ending inventory           40,500

Add: Budgeted sales    315,000

Total required in August 355,500

Working Note 5

August beginning inventory

Total required                        355,500

Less: Budgeted purchases 308,250

August beginning inventory  47,250

Working Note 6

Beginning inventory of August = Ending inventory of July

Working Note 7

July required units

Ending inventory           47,250

Add: Budgeted sales     180,000

Total required in July      227,250

Working Note 8

July beginning inventory

Total required                         227,250

Less: Budgeted purchases    200,250

July beginning inventory        27,000

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During its first year of operation Mazer Manufacturing Company produced 2,000 units of inventory and sold 1,800 units. Mazer inc
Crazy boy [7]

Answer:  The amount of gross margin Mazer would report if the company uses absorption costing is $1350.

Explanation:

Given that,

Mazer Manufacturing Company produced = 2,000 units of inventory

Units Sold = 1,800 units

Variable product cost = $4 per unit

Fixed manufacturing overhead cost =  $2,500

Sales price of the products = $6 per unit

Fixed manufacturing cost per unit = \frac{Total\ cost}{units\ produced}

= \frac{2500}{2000}

= $1.25 per unit

Unit Product cost under Absorption costing = Variable product cost + Fixed manufacturing cost per unit

= 4 + 1.25

= $5.25

∴ Gross margin under Absorption costing = Sales Revenue - Cost of goods sold

= Units sold × sales price - Units sold × Unit Product cost under Absorption costing

= 1800 × 6 - 1800 × 5.25

= 10800 - 9450

= $1350

5 0
3 years ago
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2:_________.
klemol [59]

Answer:

Ansara Company

a. Ansara Company  Variable Costing Income Statement

For the Year Ended December 31, 20Y2 (in millions)

Sales                                                                         $ 21,920

Variable cost of goods sold:

Beginning inventory                             $ 1,841

Variable cost of goods manufactured 13,810

Ending inventory                                    2,149

Total variable cost of goods sold                               17,800

Manufacturing margin                                               $4,120

Variable selling and administrative expenses              870

Contribution margin                                                 $3,250

Fixed costs:

Fixed manufacturing costs                      $ 4,820

Fixed selling and administrative expenses 1,100

Total fixed costs                                                        5,920

Income from operations                                         $2,670

b. Explanation of the difference between the amount of income from operations reported under absorption costing and variable costing concepts:

The difference occurs as a result of cost of inventory at the beginning and at the end.  Under variable costing concept, the fixed manufacturing costs does not form part of the product costs.  They are treated as period costs.  But under absorption costing, fixed manufacturing costs form part of the product costs.

Explanation:

a) Data:

Ansara Company Abbreviated Income Statement for the year ended December 31, 20Y2: (in millions):

Sales                                       $21,920

Cost of goods sold                $18,630

Gross profit                             $3,290

Selling, administrative, and

other expenses                        1,970

Income from operations        $1,320

b) Absorption costing concept is a costing technique that includes the full cost of manufacturing (i.e. cost of direct materials, direct labor, and all fixed production costs or overheads) in the product costs.  Under variable costing concept, the full cost of manufacturing is not included in the product costs.  Instead, all the variable costs (direct materials, direct labor, and variable overhead, whether factory or not)  are included, while fixed manufacturing overheads are treated as period costs and expensed.

5 0
3 years ago
1. Understanding opportunity costYou work as an assistant coach on the university basketball team and earn $15 per hour. One day
Gwar [14]

Answer:

The correct answer is letter "D": $24.

Explanation:

Opportunity cost can be defined as the cost of the best next available option after taking another decision in regards to a situation. It is also the return that the chosen option provides compared to the return that could have provided the option that was forgone.

In this case, choosing to go to the local carnival will represent losing one hour of working as a coach assistant ($15). Besides, as there is a $9 admission fee to the carnival, you will need to spend that money. Thus, the total opportunity cost of going to the carnival instead of working is $24 (<em>$15+$9=$24</em>).

6 0
3 years ago
While the percentages may not hold in a particular industry, the ______ rule suggests that a small fraction of customers provide
Talja [164]

Answer:

The correct answer is 80/20.

Explanation:

The Pareto Principle was described by economist and sociologist Vilfredo Pareto, which specifies an unequal relationship between inputs and outputs. The principle states that 20% of what goes into or is invested is responsible for 80% of the results obtained. In other words, 80% of the consequences derive from 20% of the causes; This is also known as the "Pareto rule" or the "80/20 rule."

The principle does not stipulate that all situations are going to show exactly this relationship, it refers to a typical distribution. In general, the principle can be interpreted as a minority of causes deriving from most of the results.

5 0
3 years ago
The board of directors of Capstone Inc. declared a $0.80 per share cash dividend on its $1 par common stock. On the date of decl
erik [133]

Answer: Please see below for answer

Explanation: To calculate dividends, we use the formulae

Dividend =(Number of shares issued -treasury stock held) x Dividend per share =

where number of shares issued = $18,000

treasury stock held = 6000 shares

Imputing the values in formulae becomes

($18,000 - $6000) x 0.80 = 12,000 x 0.80 = $9,600

Journal entry to record declaration of dividends of Capstone Inc.

   Account                                              Debit             Credit

Dividend                                               $9,600

Dividend payable                                                       $9,600

6 0
3 years ago
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