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    Capital Budget and Costs Allocation/Analysis

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    Please I need help on these 3 questions, one on capital budgeting and two on costs - total product cost, variable, fixed, manufacturing, nonmanufacturing, etc. Please see the attachment

    Thank you very much!

    1. A Company collected the following information to prepare its cash budget for the first quarter of 2005:

    Beginning cash balance $ 4,250
    Capital expenditures 3,000
    Collections on account 23,000
    Depreciation on factory equipment 1,000
    Dividends 1,000
    Period costs 11,000
    Product costs (excludes depreciation) 20,150

    (i). At the end of the quarter, the company will have
    a. a cash excess.
    b. a cash deficiency.
    c. neither an excess nor a deficiency.
    d. Cannot be determined from the information given.

    (ii). Kirkland's ending work in process inventory for the quarter will be
    a. $20,150
    b. $21,150
    c. $23,350
    d. Cannot be determined from the information given.

    (iii). If Kirkland wants an ending cash balance of $4,000, how much will it have to borrow in the first quarter?
    a. $0
    b. $12,000
    c. $13,000
    d. Some other amount

    (iv). Kirkland spent $4,950 on direct materials purchases and $8,400 on direct labor. Its total cash expenditures for manufacturing overhead must have been
    a. $5,800
    b. $6,800
    c. $7,800
    d. Some other amount

    2. Melodee's Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars:

    Direct materials $0.25
    Direct labor 0.03
    Unit-related support costs 0.10
    Batch-related support costs 0.12
    Product-sustaining support costs 0.22
    Facility-sustaining support costs 0.28
    Total cost per jar $1.00

    (i). The relevant cost per jar is:
    a. $0.28 per jar
    b. $0.38 per jar
    c. $0.72 per jar
    d. $1.00 per jar

    (ii). The maximum price that Melodee's Preserves should be willing to pay for the decorative jars is:
    a. $0.28 per jar
    b. $0.38 per jar
    c. $0.72 per jar
    d. $1.00 per jar

    3. The Bowley Company manufactures several different products. Unit costs associated with product ICT101 are as follows:
    Direct materials $ 60
    Direct labor 10
    Variable manufacturing support costs 18
    Fixed manufacturing support costs 32
    Sales commissions (2% of sales) 4
    Administrative salaries 16
    Total $140

    (i). Total product costs associated with product ICT101 are:
    a. $ 50
    b. $ 88
    c. $120
    d. $140

    (ii). Total period costs associated with product ICT101 are:
    a. $ 4
    b. $16
    c. $20
    d. $52

    (iii). Total variable costs associated with product ICT101 are:
    a. $18
    b. $22
    c. $88
    d. $92

    (iv). Total fixed costs associated with product ICT101 are:
    a. $16
    b. $32
    c. $48
    d. $52

    (v). Total nonmanufacturing costs associated with product ICT101 are:
    a. $ 4
    b. $16
    c. $20
    d. $52

    (vi). Total manufacturing costs associated with product ICT101 are:
    a. $70
    b. $88
    c. $120
    d. $140

    (vii). Direct manufacturing costs associated with product ICT101 are:
    a. $70
    b. $88
    c. $92
    d. $108

    © BrainMass Inc. brainmass.com October 9, 2019, 10:20 pm ad1c9bdddf
    https://brainmass.com/business/budgets/capital-budget-costs-allocation-analysis-216995

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    Please see the attached files. All answers/explanations in blue.

    1. A Company collected the following information to prepare its cash budget for the first quarter of 2005:

    Beginning cash balance $ 4,250
    Capital expenditures 3,000
    Collections on account 23,000
    Depreciation on factory equipment 1,000
    Dividends 1,000
    Period costs 11,000
    Product costs (excludes depreciation) 20,150

    (i). At the end of the quarter, the company will have
    a. a cash excess.
    b. a cash deficiency.
    c. neither an excess nor a deficiency.
    d. Cannot be determined from the information given.

    Total cash in is collections = 23,000
    Total cash out = 3,000+1,000+11,000+20,150 = 35,150
    Total cash available = 4,250+23,000=27,250
    Total cash needed = 35,150
    There will be a cash deficiency

    (ii). Kirkland's ending work in process inventory for the quarter will be
    a. $20,150
    b. $21,150
    c. $23,350
    d. Cannot be determined from the information given.

    (iii). If Kirkland wants an ending cash balance of $4,000, how much will it have to borrow in the first ...

    Solution Summary

    The solution explains various multiple choice questions relating to managerial accounting

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