Use the following to answer Hawle Manufacturing Company is in

Use the following to answer hawle manufacturing

This preview shows page 15 - 18 out of 36 pages.

Use the following to answer questions 79-80:Hawle Manufacturing Company is in the process of preparing its 2008 budget and is anticipating the following changes:30% increase in the number of units sold20% increase in the direct material unit cost15% increase in the direct labor cost per unit10% increase in the manufacturing overhead cost per unitTest Bank, Chapter 1380
14% increase in the selling price7% increase in the administrative expensesHawle does not keep any units in inventory.The composition of the cost of finished products during 2008 for materials, direct labor and factory overhead, respectively, was in the ratio of 3 to 2 to 1. The condensed income statement for 2007 is as follows:Sales (30,000 units)$450,000Less sales returns13,500Net sales436,500Cost of Goods Sold306,000Gross Profit$130,500Selling Expenses$ 60,000Admin. Expenses30,00090,000Net Income$ 40,50079.What is estimated net sales for 2008, assuming the sales return/gross sales relationship remains constant?
Response: $450,000/30,000 = $15 per unit; 30,000 x 1.30 = 39,000 unitsNew selling price = $15 x 1.14 = $17.10$17.10 x 39,000 = $666,900; $436,500/450,000 = .97.97 x $666,900 = $646,893AACSB: Analytic80.What is the estimated cost of goods sold for 2008 assuming the number of units sold does not change?
Response: $306,000/6 = $51,000 overhead; $102,000 labor; $153,000 materialOverhead: $51,000 x 1.10 = $56,500; Labor: $102,000 x 1.15 = $117,300; Material: $153,000 x 1.20 = $183,600Lanen, Anderson MaherFundamentals of Cost Accounting, 2e81
$56,500 + $117,300 + $183,600 = $357,400AACSB: Analytic81.The Waverly Company has budgeted sales for the year 2008 as follows:Quarter 1234Sales in units12,00014,00018,00016,000The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units. Scheduled production for the third quarter is (in units)
Response: 18,000 + (16,000 x .25) (18,000 x .25) = 17,500AACSB: Analytic82.The Waverly Company has budgeted sales for the year 2008 as follows:Quarter 1234Sales in units12,00014,00018,00016,000The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units. Scheduled production for the second quarter is (in units) A)17,500. B)16,500. C)15,000. D)13,000. E)Some other answer _______________. Answer: C Difficulty: Moderate Learning Objective: 4
Response: 14,000 + (18,000 x .25) - (14,000 x .25) = 15,000AACSB: Analytic

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture