Hill Industries had sales in 2021 of $6,800,000 and gross profit of $1,100,000. Mana plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8 to $8.4. Sales volume would decrease by 125.000 units from its 2021 level. Plan B would decrease the unit selling price by $0.5. The marketing department expects that the sales volume would increase by 130.000 units At the end of 2021, Hill has 40.000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 35,000 units. If Plan B is accepted, the ending inventory should be equal to 60,000 units. Each unit produced will cost $1.50 in direct labor, $1.30 in direct materials, and $1.20 in variable overhead. The foxed overhead for 2022 should be $1.895,000 (a) Prepare a sales budget for 2022 under each plan, (Round Unit selling price answers to 2 decimal places, eg 52.70) HILL INDUSTRIES Sales Budget for the Year Ending December 31, 2022 Plan A Plan B

Hill Industries had sales in 2021 of $6,800,000 and gross profit of $1,100,000. Mana plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8 to $8.4. Sales volume would decrease by 125.000 units from its 2021 level. Plan B would decrease the unit selling price by $0.5. The marketing department expects that the sales volume would increase by 130.000 units At the end of 2021, Hill has 40.000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 35,000 units. If Plan B is accepted, the ending inventory should be equal to 60,000 units. Each unit produced will cost $1.50 in direct labor, $1.30 in direct materials, and $1.20 in variable overhead. The foxed overhead for 2022 should be $1.895,000 (a) Prepare a sales budget for 2022 under each plan, (Round Unit selling price answers to 2 decimal places, eg 52.70) HILL INDUSTRIES Sales Budget for the Year Ending December 31, 2022 Plan A Plan B

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 18E: Carmichael Corporation is in the process of preparing next years budget. The pro forma income...

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Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
Review the completed master budget and answer the following questions: Is Ranger Industries expecting to earn a profit during the next quarter? If so, how much? Does the company need to borrow cash during the quarter? Can it make any repayments? Explain. (Carefully review rows 74 through 80.)
Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?
Coronado Industries had sales in 2021 of $5,521,600 and gross profit of $893,200. Management is considering two alternative budget plans to increase its gross profit in 2022.Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 101,500 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 105,560 units.At the end of 2021, Coronado has 32,480 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,420 units. If Plan B is accepted, the ending inventory should be equal to 48,720 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,538,740.
Coronado Industries had sales in 2021 of $5,698,400 and gross profit of $921,800. Management is considering two alternative budget plans to increase its gross profit in 2022.Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 104,750 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 108,940 units.At the end of 2021, Coronado has 33,520 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 29,330 units. If Plan B is accepted, the ending inventory should be equal to 50,280 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,588,010. Prepare a sales budget for 2022 under each plan.
Coronado Industries had sales in 2021 of $5,698,400 and gross profit of $921,800. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 104,750 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 108,940 units. At the end of 2021, Coronado has 33,520 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 29,330 units. If Plan B is accepted, the ending inventory should be equal to 50,280 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,588,010. Prepare a production budget for 2022 under each plan.
Jarziz Company is in the period of budgeting for 2022. The Sales manager forecasted the number of units to be sold as 25000 units and determined the selling price as 40 OMR per unit. The management revised these estimates with a 20 % increase in selling price and with a 25 % decrease in the number of units sold. According to these estimates, which of the following is revised Sales (OMR)? Select one: a. 1,150,000 b. 1,010,000 c. 900,000 d. 980,000
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Roberts and Company has a budgeted sales commissions of $200,000 for 2020, based on sales estimates of $300,000 for the same year. After the first quarter however, they realize that sales are exceeding expectations. Sales are now expected to reach $400,000 for 2020. By how much will Roberts and Company adjust their budget beginning in the 2nd quarter for sales commissions? Roberts and Company uses a static budgeting process.
CXZ Corporation expects to sell 150,000 units during the first quarter of 2021, with an ending inventory for the quarter of 20,000 units. Variable manufacturing costs are budgeted at P50 per unit, with 60% of total variable manufacturing costs requiring cash payments during the quarter. Fixed manufacturing costs are budgeted at P120,000 per quarter, 45% of which are expected to require cash payment during the quarter. 1. In the cash budget, payments for manufacturing costs during the quarter will total?
NUBD Corporation expects to sell 150,000 units during the first quarter of 2021, with an ending inventory for the quarter of 20,000 units. Variable manufacturing costs are budgeted at P50 per unit, with 60% of total variable manufacturing costs requiring cash payments during the quarter. Fixed manufacturing costs are budgeted at P120,000 per quarter, 45% of which are expected to require cash payment during the quarter.In the cash budget, payments for manufacturing costs during the quarter will total
Matthew Corporation is developing its budgets for 2024 and, for the first time, will use the kaizen approach. The initial 2024 income statement, based on static data from 2023 is as follows: Sales (200,000 units) $2,000,000 Less: Cost of goods sold 1,200,000 Gross profit 800,000 Operating expenses (includes $200,000 of depreciation) 600,000 Operating income $200,000 Selling prices for 2024 are expected to increase by 10%, and sales volume in units will decrease by 12%. The cost of goods sold as estimated by the kaizen approach will decline by 8% per unit. Other…