Question1

#1a
Sales Budget
July Aug Sep
Budgeted Sales in units 49,000 89,000 69,000
Price/unit 10 10 10
Budgeted Sales 490000 890000 690000

#1b
Schedule of expected Cash Collections
July Aug Sep
Accounts Rcvbl June $ 242,000.00
July Sales $ 196,000.00 $ 269,500.00
Aug Sales $ 356,000.00 $ 489,500.00
Sep Sales $ 276,000.00
Total Cash Collections $ 438,000.00 $ 625,500.00 $ 765,500.00

#2
Production Budget
July Aug Sep
Budgeted Sales in units 49,000 89,000 69,000
Add: desired ending 13350 10350 5850
Total needs 62350 99350 74850
Less: beginning 6600 13350 10350
Required Prod 55750 86000 64500

#3a
Direct Material Budget
July Aug Sep
Required Prod 55,750 86,000 64,500
4 4 4
Prod needs 223000 344000 258000
Add: desired ending 172000 129000 74800
Total needs 395000 473000 332800
Less: beginning 110000 172000 129000
RM to be purch 285000 301000 203800
Cost of RM to be purch $ 228,000.00 $ 240,800.00 $ 163,040.00

#3b
Schedule of expected Cash Payments
July Aug Sep
Accts Payble, June 30 $ 95,000.00
July Purchases $ 114,000.00 $ 114,000.00
Aug Purch $ 120,400.00 $ 120,400.00
Sep Purch $ 81,520.00
Tota cash payments $ 209,000.00 $ 234,400.00 $ 201,920.00

Question3
April
Budgeted Sales unit 60000
Add desired ending 30000
Total needs 90000
Less beginning 25000
Required prod units 65000

Question4,5,&6
Jan Feb Mar
Budgeted Sales 6800 5400 7200
Add desired ending 540 720 460
Total Needs 7340 6120 7660
Less beginning 400 540 720
Required prod units 6940 5580 6940

Question8-13
Carney Company
Cash Budget
Quarters
1 2 3
Cash balance, beginning $16 10 $13
Add collections from customers 57 70 67
Total cash available 73 80 80
Less disbursements:
Purchase of inventory 31 21 40
Operating expenses 35 22 ?
Equipment purchases 0 14 19
Dividends 0 6 0
Total disbursements 66 63 82
Excess (deficiency) of cash available
7 17 -2
over disbursements
Financing:
Borrowings 3 - 12
Repayments (including interest) - -4 -
Total financing 3 -4 12
Cash balance, ending $10 13 $10
Quarter
207,000
10
2070000

Quarter
$ 242,000.00
$ 465,500.00
$ 845,500.00
$ 276,000.00
$ 1,829,000.00

Oct
39,000
4350
43350
5950
37400

Quarter
206,250
4
825000
74800
899800
110000
789800
$ 631,840.00

Quarter
$ 95,000.00
$ 228,000.00
$ 240,800.00
$ 81,520.00
$ 645,320.00

Apr May
4600 3800
380
4980
460 380
4520

4
$10
80
90

35
15
0
5
55
35

-
(21)
(21)
$14
Question3

#1a
Sales Budget
July Aug Sep
Budgeted Sales in units 37,000 77,000 57,000
Price/unit 10 10 10
Budgeted Sales $ 370,000.00 $ 770,000.00 $ 570,000.00

#1b
Schedule of expected Cash Collections
July Aug Sep
Accounts Rcvbl June $ 176,000.00
July Sales $ 148,000.00 $ 203,500.00
Aug Sales $ 308,000.00 $ 423,500.00
Sep Sales $ 228,000.00
Total Cash Collections $ 324,000.00 $ 511,500.00 $ 651,500.00

#2
Production Budget
July Aug Sep
Budgeted Sales in units 37,000 77,000 57,000
Add: desired ending 11550 8550 4050
Total needs 48,550 85,550 61,050
Less: beginning 4800 11550 8550
Required Prod 43,750 74,000 52,500

#3a
Direct Material Budget
July Aug Sep
Required Prod 43,750 74,000 52,500
4 4 4
Prod needs 175,000 296,000 210,000
Add: desired ending 148,000 105,000 51,000
Total needs 323,000 401,000 261,000
Less: beginning 86,000 148,000 105,000
RM to be purch 237,000 253,000 156,000
Cost of RM to be purch $ 189,600.00 $ 202,400.00 $ 124,800.00

#3b
Schedule of expected Cash Payments
July Aug Sep
Accts Payble, June 30 $ 83,000.00
July Purchases $ 94,800.00 $ 94,800.00
Aug Purch $ 101,200.00 $ 101,200.00
Sep Purch $ 62,400.00
Tota cash payments $ 177,800.00 $ 196,000.00 $ 163,600.00
Quarter
171,000
10
$ 1,710,000.00

Quarter June 320000

$ 176,000.00
$ 351,500.00
$ 731,500.00
$ 228,000.00
$ 1,487,000.00

Oct June 32000

27,000 Nov 17,000
2550
29,550
4050
25,500

Quarter June 86,000

170,250 Sep 102000
4
681,000
51,000
732,000
86,000
646,000
$ 516,800.00

Quarter
$ 83,000.00
$ 189,600.00
$ 202,400.00
$ 62,400.00
$ 537,400.00
Question 1
Jimbob Co.'s records include the following information for the month of January:

Units manufactured 5,000

Units sold 4,000
Selling price per unit $50
Variable manufacturing costs per unit:
Direct materials $ 5.00
Direct labour $ 2.00
Manufacturing overhead $ 1.00
Variable selling and administrative expense$ 1.00
Total fixed costs:
Manufacturing overhead $ 10,000.00
Selling and administrative expenses $ 20,000.00

Question 1
Selling Price 50
Variable Costs
Direct materials 5
Direct labour 2
Manufacturing overhead 1
Variable S&A expenses per unit sold 1

CM 41

Question 2 Price per Unit Units

Sales 50 4,000 200000
Less Variable Costs 36000
Direct materials 5 20000
Direct labour 2 8000
Manufacturing overhead 1 4000
Variable S&A expenses per unit sold 1 4000

CM 41 164000

Less Fixed Costs 30,000

Mfg OH 10,000
S&A Exp 20,000

Net Income 134,000

Question 3
Cost of Units Manufactured $ 10.00
Var Cost
Direct materials $ 5.00
Direct labour $ 2.00
Manufacturing overhead $ 1.00
Fixed Cost
Manufacturing overhead (10000/5000) $ 2.00

$ 5,000.00
Units sold 4,000 Sales
Selling price per unit $50 Less Cost of Goods Sold
Variable manufacturing costs per unit: Direct Materials
Direct materials $ 5.00 Direct Labour
Direct labour $ 2.00 Manufacturing OH
Manufacturing overhead $ 1.00 Gross Margin
Variable selling and administrative expense$ 1.00
Total fixed costs: Less Selling and Admin
Manufacturing overhead $ 10,000.00
Selling and administrative expenses $ 20,000.00
Net Income

Question 6
Sales (200,000*2) 400,000
Contribution Margin (400,000*.25) 100,000
Fixed Exp (equals to CM @ B/E point) 100,000

Question 7
CM = 1 - Variable expense ratio 28%
Net Loss = CM ratio * sales below the B/E poin16,800

Question 8
Sales (100,000*10) $ 1,000,000.00 Sales
Less Var Exp $ 600,000.00 Var Exp
CM $ 400,000.00 CM
Less Fxd Exp $ 300,000.00 Less Fxd Exp
Net Income $ 100,000.00 Advert
Net Income
Question 11
Fxd Exp = CM @ B/E point 4000
CM per unit 5
At 801 units profit is 1*5 5
Question 12
Sales (3,000*80) 240000
Var Cost 84000
CM 156000
Fixd Cost 66000
Net Income 90000
DOL 1.7333333333

Question 13 Units Price

Sales 37000 370 $ 13,690,000.00
Less Var Exp $ 3,616,750.00
Direct Material 30 $ 1,110,000.00
Direct Labor 20 $ 740,000.00
Overhead 20 $ 740,000.00
Sales Com 7.50% $ 1,026,750.00
Contribution Margin $ 10,073,250.00
Less Fxd Exp 55 $ 2,035,000.00
Net Income $ 8,038,250.00

Breakeven sales ₱ 2,765,657

Margin of safety (in dollars) ₱ 10,924,343
Margin of safety (in units) ₱ 295
DOL 1.253164557

Question 14
Sales Revenue (32,200) 944,000
Less Cost of Good Sold 593,600 Variable COGS 383,250

Gross Margin 350,400

Less: Selling and Admin 187,400 Fixed S&A 154,600

Net income 163,000

Fixed Components Annual Quarter

Fixed COGS 841,400 $ 210,350.00
Selling and admin 32,200*1 $ 32,800.00

Contribution Margin Income Statement Format

Unit Price Per Unit

Sales Revenue 944,000 32,800 $ 28.78
Less variable expenses 416,050 $ 12.68
Cost of Goods Sold 383,250
Selling and Admin 32,800

Contribution Margin 527,950 $ 16.10

Less fixed expenses 364,950

Cost of Goods Sold 210,350
Selling and Admin 154,600

Net Income 163,000

27.2
4,000 50 200000
$ 40,000.00
$ 25,000.00
$ 10,000.00
$ 5,000.00
$ 160,000.00

$ 4,000.00 $ 24,000.00
$ 20,000.00

$ 136,000.00

Units Selling Price

110000 11.5 $ 1,265,000.00
110000 $ 6.00 $ 660,000.00
$ 605,000.00
$ 300,000.00
$ 100,000.00
$ 205,000.00
Percentage
100%
26%

74%

Goal is to construct a contribution margin income statement

by separating the fixed and variable components from the gross margin format
Note: Difference between the two operating income statements, see page 429

Assume that we have the same sales revenue and net income
We just need to determine the fixed and variable components.

Step 1: Find the quarterly fixed cost of goods sold (COGS)

Divide 840,000 by 4

Step 2: Variable selling and admin cost

Multiply the sales commission per unit by the number of units (3*32,600)

Step 3: Fixed selling and admin cost

Subtract variable S&A to S&A from gross margin income statement
187,200 - 97,800
Percentage
100 29.31677019 Step 4: Variable COGS
44% 12.92080745 Subtract fixed COGS to cost of goods sold on the gross margin income statement
0.4407309322 593,100 - 210,225
0.440730932

56% 16.39596273
0.5592690678
ncome statement
Croftsman Company recorded the following information for its main product:

Selling price per unit 320

Costs per unit (32,000 units produced and sold):
Direct material 50
Direct labour 35
Variable overhead 25
Fixed overhead 50
Sales Commission 7.5 % of sales

32000
Sales $ 10,240,000.00
Less Var Cost 5088000
DM 1600000
DL 1120000
OH 1600000
SC $ 768,000.00 0.075
CM $ 5,152,000.00
Fixed OH 1600000
$ 3,552,000.00
$ 7,481,379.31 $ 23,379.31

1.4504504505
Sales Revenue (32,600) 943000
Less Cost of Good Sold 593,100 Variable+Fixed

Gross Margin 349,900

Less: Selling and Admin 187,200 Variable+Fixed

Net income 162,700

Fixed Components Annual Quarter

Fixed Manufacturing 840,900 210225
Selling and admin 32,600*3 97800

Contribution Margin Income Statement Format

Price Per Unit

Sales Revenue 943,000 $ 28.93
Less variable expenses 480,675 $ 14.74
Selling and Admin 97,800
Cost of Goods Sold 382,875

Contribution Margin 462,325 $ 14.18

Less fixed expenses 299,625

Selling and Admin 89,400
Manufacturing 210,225
Net Income 162,700
 24
134
186
136
1.367647059

24
134
186
0.58125
136 $ 0.50
0.985294118

₱ 2,758,620.69
0.503125

1.45045045
 Goal is to construct a contribution margin income statement
382,875 by separating the fixed and variable components from the gross margin format
Note: Difference between the two operating income statements, see page 429

Assume that we have the same sales revenue and net income
89,400 We just need to determine the fixed and variable components.

Step 1: Find the quarterly fixed cost of goods sold (COGS)

Divide 840,000 by 4

Step 2: Variable selling and admin cost

Multiply the sales commission per unit by the number of units (3*32,600)

Step 3: Fixed selling and admin cost

Subtract variable S&A to S&A from gross margin income statement
187,200 - 97,800
Percentage
100 Step 4: Variable COGS
51% Subtract fixed COGS to cost of goods sold on the gross margin income statement
593,100 - 210,225

49%
ss margin format
ts, see page 429

s (3*32,600)

income statement