Project #160911 - Accounting Problems

Business Tutors

Subject Business
Due By (Pacific Time) 12/15/2016 08:00 am

Problem 1 

X-Ray Manufacturing has the following revenues and costs:

Fixed overhead
Direct labor
Direct materials
Selling expenses
Administrative expenses 
Variable overhead 
Interest expense 
Income tax

Prepare a contribution margin income statement with both dollars and percentages of sales displayed.

Problem 2 

Presented below are selected budget data items for Globe Corporation for a three-month period:

Direct materials
Direct labor
Variable overhead
Fixed overhead
Selling and admin. costs
Fixed loan payments

Sales were $770,000 in August and $840,000 in September. Material usage was $115,000 in August and $118,000 in September. All sales are on account, and accounts receivable is historically collected 15% in the month of sale, 65% in the month following sales, and the remainder two months after the sale. Materials are paid for 40% in the month used and 60% the following month. All other expenses are paid in the month incurred. The cash balance was $35,000 at the beginning of October, and management wants to determine if the company will have enough cash to pay a year-end bonus.

Prepare a three-month cash budget, including a schedule for cash collections and material payments.

Problem 3 

Olympic Products Inc. manufactures and distributes barbecue grills. The company normally sells 1,000 of these grills each month for a price of $140 each. The material cost for a grill is $44 and the direct labor is $22. The variable overhead cost is $13 per grill, and the fixed overhead cost is $30,000 per month. A contract manufacturer has approached the company and offered to supply the grills ready to sell for $85 each. The company management believes that if it accepts this offer, Olympic Products will be able to lease unused factory space for $10,000 per month.

Perform a make-versus-buy analysis.


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