Liberty BUSI 320 Connect Homework 2 Answers Complete Solutions
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At the end of January, Mineral Labs had an inventory of 955 units, which cost $12 per unit to produce. During February, the company produced 1,800 units at a cost of $16 per unit.
a. If the firm sold 2,650 units in February, what was the cost of goods sold? (Assume LIFO inventory accounting.)
b. If the firm sold 2,650 units in February, what was the cost of goods sold? (Assume FIFO inventory accounting.)
Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1:
Beginning inventory at these costs on July 1 was 9,400 units. From July 1 to December 1, Convex produced 22,500 units. These units had a material cost of $8 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory accounting.
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a. Assuming that Convex sold 24,500 units during the last six months of the year at $16 each, what would gross profit be?
The Bradley Corporation produces a product with the following costs as of July 1, 20X1:
Beginning inventory at these costs on July 1 was 3,450 units. From July 1 to December 1, 20X1, Bradley produced 12,900 units. These units had a material cost of $4, labor of $6, and overhead of $3 per unit. Bradley uses LIFO inventory accounting.
a. Assuming that Bradley sold 14,800 units during the last six months of the year at $18 each, what is its gross profit?
Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales.
Sales in January and February were $54,000 and $53,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 25 percent are collected in the month of sale, 35 percent are collected in the following month, and 30 percent are collected two months after sale.
a. Prepare a monthly cash receipts schedule for the firm for March through August.
The Volt Battery Company has forecast its sales in units as follows:
Volt Battery always keeps an ending inventory equal to 120% of the next month’s expected sales. The ending inventory for December (January’s beginning inventory) is 2,640 units, which is consistent with this policy.
Materials cost $11 per unit and are paid for in the month after purchase. Labor cost is $4 per unit and is paid in the month the cost is incurred. Overhead costs are $13,000 per month. Interest of $9,400 is scheduled to be paid in March, and employee bonuses of $14,600 will be paid in June.
a. Prepare a monthly production schedule for January through June.
b. Prepare a monthly summary of cash payments for January through June. Volt produced 2,000 units in December.
Harry’s Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecasted sales figures:
a. Prepare a schedule of monthly cash receipts for January, February, and March.
b. Prepare a schedule of monthly cash payments for January, February, and March.
c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.)