Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: May June $192,000 April $157,000 Manufacturing costs* Insurance expense** Depreciation expense Property tax expense*** *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $920 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). ***Property tax is paid once a year in November. 920 1,890 440 920 1,890 440 $205,000 920 1,890 440 The cash payments for Finch Company expected in the month of June are Oa. $249,750 Ob. $201,750 Oc. $153,750 Od. $48,000

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: May June $192,000 April $157,000 Manufacturing costs* Insurance expense Depreciation expense Property tax expense* Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. Insurance expense is $920 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). Property tax is paid once a year in November. 920 1,890 440 920 1,890 440 $205,000 920 1,890 440 The cash payments for Finch Company expected in the month of June are Oa. $249,750 Ob. $201,750 Oc. $153,750 Od. $48,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CE

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