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ACCT Cheat Sheet back

# ACCT Cheat Sheet back - Dress for Success produces a man's...

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Dress for Success produces a man’s suit that sells for \$200. Although the company’s production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. The production costs for 2,500 suits are as follows: Unit-level material cost \$200,000 /2,500 = 80 Unit-level labor cost \$100,000 /2,500 = 40 Unit-level overhead \$ 50,000 /2,500 = 20 Batch-level set-up cost (500 units per batch) \$ 6,000 /5 = 1,200 Product-level costs \$ 15,000 Allocated facility-level costs \$ 50,000 BizDress has offered to purchase 500 suits as a one-time special purchase at a price of \$140. If the company accepts the special offer, Revenue from offer \$140 * 500 \$70,000 Unit-level material \$80 * 500 (40,000) Unit-level labor \$40 * 500 (20,000) Unit-level OH \$20*500 (10,000) Batch level ( 1,200) \$ (1,200) loss The Phone Store, Inc. (PSI) plans to open a retail store on June 1. PSI expects sales on account in June to be \$50,000. Cash sales for June are expected to be \$10,000. The company expects a growth rate of 20% during July and 20% during August. PSI normally collects 50% of accounts receivable in the month of sale, 40% in the month following sale and 10% in the second month following sale.

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ACCT Cheat Sheet back - Dress for Success produces a man's...

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