final exam review jeopardy #2 Flashcards
If a company has a beginning merchandise inventory of $40,000, a desired ending merchandise inventory of $20,000, and a budgeted COGS of $250,000, what is the amount of required inventory purchases?
Beg Inv + Purchases – COGS = End. Inv
Purchases = EI + COGS – BI = 20,000+250,000-40,000 = 230,000
March, April, and May sales are $100,000, $120,000, and $125,000 respectively. A total of 80% of all sales are credit sales and 20% are cash sales. A total of 60% of credit sales are collected in the month of the sale and 40% are collected in the next month. What is the amount of cash collections for April?
$113,600
March Earnings: 80,000 credit and 20,000 cash
March credit collections in April: 80,000 * 40% = 32,000
April Earnings: 96,000 credit and 24,000 cash
April cash collection: 24,000
April credit collections in April: 96,000 * 60% = 57,600
Cash collections in April = 32,000 + 24,000 + 57,600 = $113,600
X typically produces 10,000 units. Its budgeted manufacturing overhead is 50,000 variable and $135,000 fixed. If X Company had actual overhead costs of $187,500 for 11,000 units produced, what is the difference between actual and flexible budget costs?
2,500 U
Variable cost per unit = 50,000/10,000 = $5.00/unit
Flexible Budget: $135,000 FE + 5.00(11,000) =$190,000 > 187,500
X company has a controllable margin of $100,000 on revenues of $800,000. Average invested assets were $500,000. Arbor requires a 12% minimum rate of return. What is the ROI?
20%
ROI = NOI / AoA = 100,000 / 500,000 = 20%
It costs L Company $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30. A buyer in Mexico offers to purchase 3,000 units at $18 each. L Company has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income?
CM per Unit = Sales – VE = 18 – 14 = $4 * 3,000 units = +$12,000 NOI
