Answer No.

1:

a.

Material
Opening Inventory 20
Purchases of raw materials 100
(-) Closing Inventory -80
DM used in production 40
Direct labor 240
Manufacturing overhead 210
Total Manufacturing cost 490

Opening WIP 50
(-) Closing WIP -30
Cost of good manufactured 510
Beginning Inventory 160
Less: Ending 150

b.

Opening finished goods 160

(-) closing finished goods -150
Cost of goods Sold 510

c.

Income Statement
Sales 990
(-) Cost of Goods sold -510
Gross profit 480
(-) Administrative expense -100
(-) Saling expense -140
Net Income 240
Answer No. 2:

a.

Simply Sweets
Contribution Margin
Income Statement For
the Month Ended
August 31
Total Per unit Percentage
Sales 40000 2.00 100
Variable cost:
Cost of goods sold 16000 0.80 40
Salings 4000 0.20 10
Administrative 2000 0.10 5
Total variable cost 22000 1.10 55
Contribution 18000 0.90 45
Margin
Fixed cost:
Selling 2000
Administrative 5000
Total fixed cost 7000
Operating income 11000

b.

Company breakeven point ∈units=total ¿ cost ¿

Unit Contribution magin

7000
Company breakeven point ∈units=
0.90

Company breakeven point ∈units=7,878

c.
Sales∈$=total ¿ cost ¿
Contribution magin Ratio
7000
Sales∈ $=$
45 %
Sales∈ $=$ 15565
d.
 Morgin of safety=$ 40000−$ 15555
Morgin of safety=$ 24445
24445
Morgin of safety ∈%= =61 %
40000
e.
CM
DEGREE OF OPERATING LEVERAGE=
Oi
18000
DEGREE OF OPERATING LEVERAGE= =1.46
11000

Answer No. 3:

Doley Company

1.

Budget Cash Receipts for March

Cash sale(70000x20%) 14000
Credit sale
January(40000x80%x8%) 2560
February (50000x80%x30%) 12000 2.
March(70000x80%x60%) 33600 2.
Total Cash Receipt 62160 2.

Cash Budget for March

Opening Balance 6000
Cash receipt 62160
Total Cash Available 68160
Less: Cash Disbarments
Purchases 28000
Operating Expense 40000
Dividends 4000
Total Disbursement 72000
Excess(deficiency) -3840
Add: borrowing 8840
Ending Balance 5000
Answer No. 4:

Production Budget for the company

January February March April

Budget Sales 20000 35000 60000 40000
Add. Desired ending 7000 12000 8000 6000
inventory
Total Units 27000 47000 68000 46000
Deduct beginning 4000 7000 12000 8000
inventory
Unit to be purchased 23000 40000 56000 38000