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(TCO E) Complying with regulations is a(n) (Points : 5)

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(TCO E) Complying with regulations is a(n) (Points : 5) 

(TCO G) Given the following data, what would ROI be? 

(TCO C) Madlem, Inc., produces and sells a single product whose selling price is $120.00 per unit and

whose variable expense is $46.20 per unit. The company's fixed expense is $405,900 per month. Required: Determine the monthly breakeven in either unit or total dollar sales. Show your work! (Points :

25) 

(TCO B) Carter Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below. 

(TCO D) Duif Company's absorption costing income statement for the last year of operations is presented below.
Sales..........................................................................................$70,000
Less cost of goods sold:

Beginning inventory.............................................. 0
Add cost of goods manufactured..................48,000
Goods available for sale...................................48,000
Less ending inventory.......................................6,000
Cost of goods sold....................................................................42,000 Gross margin...............................................................................28,000 Less selling and admin. expenses........................................... 25,000 Net operating income................................................................$3,000 Data on units produced and sold for the year are given below.

Units in beginning inventory...................................0 Units produced....................................................8,000 Units sold.............................................................7,000

Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead totaled $16,000 for the year. The fixed manufacturing overhead was applied to products at a rate of $2 per unit. Variable selling and administrative expenses were $3 per unit sold.

Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements. (Points : 30) 

(TCO I) (Ignore income taxes in this problem.) Axillar Beauty Products Corporation is considering the

production of a new conditioning shampoo that will require the purchase of new mixing machinery. The machinery will cost $375,000, is expected to have a useful life of 10 years, and is expected to have a salvage value of $50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul at the end of Year 6. A $40,000 increase in working capital will be needed for this investment project. The working capital will be released at the end of the 10 years. The new shampoo is expected to generate net cash inflows of $85,000 per year for each of the 10 years. Axillar's discount rate is 16%.

Required:
Part A: What is the net present value of this investment opportunity?
Part B: Based on your answer to (a) above, should Axillar go ahead with the new conditioning shampoo?
(Points : 30) 

(TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just-completed year.

Sales 1,300 Raw materials inventory, beginning 25

Raw materials inventory, ending 30

Purchases of raw materials 250 Direct labor 350 Manufacturing overhead 500 Administrative expenses 300

Selling expenses 250 Work in process inventory, beginning 150

Work in process inventory, ending 100 Finished goods inventory, beginning 80 Finished goods inventory, ending 110 

Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated? (Points : 25) 

(TCO F) Wehr Inc. is preparing its cash budget for April. The budgeted beginning cash balance is $26,000. Budgeted cash receipts total $98,000 and budgeted cash disbursements total $105,000. The desired ending cash balance is $50,000. The company can borrow up to $120,000 at any time from a local bank with interest not due until the following month.

Required:
Prepare the company's cash budget for April in good form. Make sure to indicate what borrowing, if any,

would be needed to attain the desired ending cash balance. (Points : 25) 

(TCO F) The following overhead data are for a department of a large company.

Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department. (Points : 25) 

(TCO H) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data.
PRODUCT

Total A B C Sales................................................$ 100,000........$50,000.........$20,000...........$30,000 Variable expenses.............................. 60,000..........30,000............10,000.............20,000

Contribution margin............................. .40,000..........20,000............10,000.............10,000 Fixed expenses:

Rent................................................. .5,000...........2,500..............1,000...............1,500 Depreciation..................................... 6,000...........3,000..............1,200................1,800 Utilities.............................................4,000...........2,000.................500................1,500 Supervisors' salaries....................... 5,000.......... 1,500.................500................3,000 Maintenance....................................3,000...........1,500..................600..................900 Administrative expenses................ 10,000...........3,000.................2,000..............5,000

Total fixed expenses........................ 33,000..........13,500...............5,800.............13,700

Net operating income........................ $7,000..........$6,500.............$4,200............($3,700) The additional information below is available.
o The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped. o The company's total depreciation would not be affected by dropping Product C.

o Eliminating Product C will reduce the total monthly utility bill from $4,000 to $3,000.
o All supervisory salaries for Product C would be avoidable.
o If Product C is discontinued, the maintenance department will be able to reduce total monthly expenses from $3,000 to $2,200.
o Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently,

their combined salaries total $2,500.
Required: Prepare an analysis showing whether Product C should be eliminated. Provide numerical support 

(TCO B) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 35,000. The estimated variable manufacturing overhead was $7.25 per labor hour and the estimated total fixed manufacturing overhead was $585,000. The actual labor hours for the year turned out to be 33,000.

Required:
Compute the company's predetermined overhead rate for the recently completed year.
(Points : 25) 

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