ACCT 505 Week 8 Final Exam (Version 4)
- (TCO C) Silver City, Inc., has collected the following operating information below for its current month’s activity. Using this information, prepare a flexible budget analysis to determine how well Silver City performed in terms of cost control.
- (TCO D) Globe Co. manufactures automatic door openers. The company uses 15,000 electronic hinges per year as a component in the assembly of the openers. You have been engaged by Globe to assist with an evaluation of whether the company should continue producing the hinges or purchase them from an outside vendor.
- (TCO E) Mesa Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below:
- (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the White Sands Corporation for the just-completed year.
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- (TCO F) Farmington Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below……………
- (TCO G) – (Ignore income taxes in this problem.) Tennessee Co. is considering the production of an exterior paint that will require the purchase of new mixing machinery. The machinery will cost $700,000, is expected to have a useful life of 12 years, and is expected to have a salvage value of $100,000 at the end of 12 years. The machinery will also need a $40,000 overhaul at the end of Year 7. A $50,000 increase in working capital will be needed for this investment project. The working capital will be released at the end of the 12 years. The new paint is expected to generate net cash inflows of $120,000 per year for each of the 12 years. Tennessee’s discount rate is 14%
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Required:
- What is the net present value of this investment opportunity?
- Based on your answer to (a) above, should Tennessee go ahead with the new paint?
- (TCO B) Winslow Corporation produces and sells a single product. Data concerning that product appear below…………………….
Required:
- a) Determine the monthly break-even in unit sales. Show your work!
- b) Determine the monthly break-even in dollar sales. Show your work!
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- (TCO F) Manchester, Inc. bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below………………
- (TCO F) Memphis Corporation is preparing its cash budget for February. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements total $128,000. The desired ending cash balance is $50,000. The company can borrow up to $110,000 at any time from a local bank, with interest not due until the following month.
Required:
Prepare the company’s cash budget for February in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.
Cash, Beginning Balance 27,000 + Cash Receipts 136,000 = Total Cash Available 163,000; Total Cash Available 163,000 – Disbursements 128,000 = Cash Over (Under) 35,000; Cash Over (Under): 35,000 + Borrowing 15,000 = Cash, Ending Balance 50,000
