31 Dec Grass is Greener, Inc., plans

Question 1

Hindenburger, Inc., began operations on January 1. It made 5,000 burgers and sold 4,000 of them. Hindenburger incurred the following costs:

Question 2

Quiche & Tell, Inc., is a catering business. Direct labor costs are $15 per hour and overhead is allocated to jobs at a rate of $10 per direct labor hour. Catering for theEggsetera, Inc. party cost $1,000 for direct materials and took 20 direct labor hours. Calculate the total cost of the Eggsetera’s party.

Question 3

Bank, Rupp, & Baroque, Inc., began operations on January 1. It made 10,000 shirts and sold 4,000 of them. Bank, Rupp, & Baroque incurred the following costs:

Question 4

Use the following information to calculate Bead It, Inc.’s, Inventory balance on its December 31 year-end balance sheet. Note: All purchases of inventory are on account.

Question 5

Assume you are a retail store that sells jeans. Identify each of your costs as variable, fixed, or mixed:

Question 6

You plan on starting a lawn mowing business by investing $700 of your own money and purchase $500 of equipment. You plan to work 260 hours per month and charge your customers $16 per hour. Your anticipated costs include:

Question 7

You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 230 hours per month and charge your customers $16 per hour. Your anticipated costs include:

Question 8

Bayless Company produces and sells 50 units of a single product.

Question 9

Ducts Duck, Inc., produced and sold 2,000 units of its product.

Question 10

Par for the Course produces and sells 2,000 sets of golf clubs.

Question 11

Bead It, Inc., produces and sells beads by the pound.

Question 12

Deja Brew, Inc., produces and sells 1,000 pallets of tea.

Question 13

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 9,000 pizzas at $8 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of budgeted sales for its first quarter.

Question 14

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 3,000 pizzas at $8 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of Cash Collections for its first quarter.

Question 15

Piece of Pizza Company is preparing its master budget for its first year of business. It expects to sell 5,000 pizzas at $9 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate its Accounts Receivable balance at the end of its first month.

Question 16

Pasta Disasta, Inc., is preparing its master budget for its first month of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times. The pizza is expected to cost $3 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of budgeted purchases for its first month.

Question 17

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 2,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 2,100 pizzas in the first month and 2,000 pizzas in the second and third months. The pizza is expected to cost $5 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of cash paid for purchases for its first quarter.

Question 18

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of Accounts Payable on its budgeted balance at the end of the quarter.

Question 19

Grass Is Greener, Inc., will purchase equipment for $17,000 at the beginning of its first quarter of business. It expects to use the equipment for 10 years, after which it will be worthless. Calculate the amount of its Equipment, net of Accumulated Depreciation, on its pro-forma balance sheet at the end of its first quarter.

Question 20

Buy & Large, Inc.’s, Purchasing Department’s estimated annual costs are $400,000 and the number of purchase orders written is 800,000. The Shoe Department has requested 100,000 purchases during the year for a total of $4,000,000 in purchases. How much of the Purchasing Department’s cost should be allocated to the Shoe Department?

Question 21

Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000 for 20,000 pounds of the product. The costs per pound to make this product include:

Question 22

Wok Around the Clock, Inc., sells specialty woks. In the current year it expects to incur $840,000 in variable costs and $130,000 in fixed costs to make and sell 10,000 woks at $100 each.

If Wok Around the Clock accepts a special order from Hard Wok Cafe to purchase 1,000 woks at $75 each plus $1,200 in shipping costs, how much would it make or lose on this special order?

Question 23

Applesoft produces tablets, laptops and televisions. Applesoft typically sells 1,000 tablets a year. The tablet information is as follows:

Question 24

Vicious Cycle, Inc., produces and sells 2,000 bikes.

Selling price per unit $4,000

Variable cost per unit $800

Annual fixed cost $500,000

What is the company’s contribution margin per unit? (Round to the nearest cent.)

•Question 25

Which of the following costs are irrelevant to business decisions?

Question 26

If Rich & Sweet Candy Company produces and sells 5,000 units, its projected revenues and costs would be as follows:

Total Sales Revenue $90,000

Total Variable Costs 40,000

Total Fixed Costs 20,000

If the units sold increases by 20%, what would the total contribution margin equal?

Question 27

Using the incomplete Master Budget (at 100 hours) below, calculate the total contribution margin on the Flexible Budget (at 120 hours).

Master Budget

(100 hours) Flexible Budget

(120 hours)

Sales Revenue $2,000 ?

Total Variable Costs $400 ?

Total Fixed Costs $1,000 ?

Total Contribution Margin at 120 hours =

Question 28

If Rich & Sweet Candy Company produces and sells 5,000 units, its projected revenues and costs would be as follows:

Total Sales Revenue $100,000

Total Variable Costs 40,000

Total Fixed Costs 40,000

If the units sold increased by 20%, what would its total fixed costs equal?

Question 29

Grass is Greener, Inc., plans to charge its customers by the hour and to work 400 hours at $9 per hour. It expects its variable costs to be $6 per hour and fixed costs to be $600. Calculate the number of hours needed to earn $1,800 in operating income? (Round to the nearest hour)

Question 30

There is no final exam in this class.