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# Managerial Accounting for Cash Disbursed Suppliers

ABC Company pays for purchases 40% in the month of purchase, and the balance in the following month. Recent purchases have been: August, \$2,500; September, \$5,000; October, \$4,000; November, \$5,000. What is the amount of cash disbursed to suppliers in October?

A company produces a single product, with a selling price of \$10 and a variable cost of \$6. Fixed costs are \$100,000 per period. What volume of sales in units is needed to earn a profit of \$60,000 per period?

ABC Company had retained earnings of \$45,000 at the start of the year, and \$57,000 at the end of the year. If dividends of \$7,000 were paid, what was amount of net income?

Beginning inventory is 200 units @ \$10/unit. During the year, the following purchases are made (in chronological order): 800 units @ \$12/unit; 700 units @ \$13/unit; and 100 units @ \$15/unit. Ending inventory is 300 units. Compute the cost of ending inventory under the LIFO method.

A company has beginning work in process of \$94,000. Prime costs committed to production during the period are \$700,000. Manufacturing overhead is applied at 60% of prime cost. Ending work in process is \$80,000. What is cost of goods manufactured for the period?

#### Solution Preview

Solution 1 ABC Company

Cash Disbursed in Oct = 40%*4000 + 60%*5000 = 1600 + 3000 = \$4,600

Solution 2

Contribution Margin = Sale price - variable cost = 10-6 = \$4

Breakeven Point = Fixed Cost/ ...

#### Solution Summary

Managerial accounting for cash disbursed suppliers are examined.

\$2.19