Sales salaries and commissions are $10,000 when 80,000 units are sold, and $14,000 when 120,000 units are sold. Using the high-low method, what is the fixed portion of sales salaries and commissions? a. $ 2,000 b. $ 4,000 c. $10,000 d $12.000
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- Trumbull Co. plans to produce 100,000 toy cars during September. Planned production for October is 125,000 cars. Sales are forecasted at 90,000 toy cars for September and 120,000 toy cars for October. Each toy car requires four wheels. Trumbulls policy is to maintain 10 percent of the next months production in inventory at the end of a month. How many wheels should Tram bull purchase during September? a. 195,000 b. 112,500 c. 102,500 d. 410,000Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered quantity.b. Determine the EOQ.c. How many orders will be placed per year using the EOQ?d. Calculate ordering, holding, and total inventory costs for the EOQand also determine the change in total inventory cost.
- The cost of product X is 30 percent of its selling price, and the carrying cost is 8 percent of selling price. Accounts are paid on average 60 days after sale. Sales per month average P25,000. What is the investment in accounts receivable? choose the letter of the correct answera. P8,000.00b. P9,000.00c. P19,000.00d. P29,000.00e. P39,000.00Bulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales. 30% pays on the 20th day and take discounts while the remaining customers always pay on time. What is the average amount of accounts receivable? (Use 360-day year) The annual demand of Bulldogs Inc. sole product totaled 450,000 units. Due to uncertainty in supply of items, the maximum possible lead time for the orders is 2 weeks and 1 day. A safety stock of 6,250 units is determined. What is the normal lead time? (Use 360 days)Butter cup company distribute a single product. The company's sale's and expenses for last month follow: Sale's P 450,000. Per unit P 30 Variable expenses 180,000 per unit P12 Contribute margin 270,000 per unit P18 Fixed expenses 216,000 Net operating income P54,000 What is the monthly break-even points in unit sold and in sales pesos? How many units would have to be sold each month to earn a target profit of Php 90,000 $ Use the formula method verify your answer by preparing a contribution format income statement at the target sale's level
- The cost of product X is 30 percent of its selling price, and the carrying cost is 8 percent of selling price. Accounts are paid on average 60 days after sale. Sales per month average P35,000. What is the investment in accounts receivable? CHOOSE THE ANSWERA. P600.00B. P6,600.00C. P19,000.00D. P16,600.00E. P26,600.00Advertising expense $180,000 per quarter Sales commissions 5% of sales Shipping expense $40,000 per quarter + $5.00 per unit sold Administrative salaries $90,000 per quarter Insurance expense $10,000 per quarter Depreciation expense $60,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.Receivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table. Notes:1. The Increase/(Decrease) column may be computed either by row or later once the Current and Proposedcolumns are complete.2. Some parts of the computations were omitted in the supporting table. These include turnovers and averagebalance as well as conversion of daily amounts to annual amounts. Students are assumed to know how tocompute for these because they were taken up in the previous topics.3. Be careful when…
- Receivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table. Required: How much would the following be assuming that ABC proceeds with its plan to accept the new market group?1. Increase in gross profit2. Increase in receivables carrying cost3. Increase in bad debts4. Net advantage or disadvantage of the planReceivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table.Required: How much would the following be assuming that ABC proceeds with its plan to accept the new market group?What is the neet advantage or disadvantage of the plan?GB Inc. sells 12,000 gallons of ice cream each month from its central storage facility. Monthly carrying costs are P0.10 per gallon and ordering costs are P50 per order. Ignore potential stockout costs and assume a 30-day month. What is the total inventory cost for the month? P346 per month P500 per month P1,000 per month P650 per month