Buy ACCT 221 ACCT/221 ACCT221 Quiz 3 Answers at the best price of 15

Buy ACCT 221 ACCT/221 ACCT221 Quiz 3 Answers at the best price of 15



Problem 1 (20 points)
X-Ray Manufacturing has the following revenues and costs:




SalesFixed overheadDirect laborDirect materialsSelling expensesAdministrative expenses Variable overhead Interest expense Income tax


$4,340,000$1,020,000$458,000$620,000$365,000$489,000 $224,000 $118,000 $366,000




Prepare a contribution margin income statement with both dollars and percentages of sales displayed.



Problem 2 (20 points)
Presented below are selected budget data items for Globe Corporation for a three-month period:




SalesDirect materialsDirect laborVariable overheadFixed overheadSelling and admin. costsFixed loan payments


OCTOBER$820,000$123,000$90,000$65,600$140,000$312,000$155,000


NOVEMBER$780,000$119,000$85,000$62,400$140,000$310,000$155,000


DECEMBER$850,000$125,000$96,000$68,000$140,000$315,000$155,000




Sales were $770,000 in August and $790,000 in September. Material usage was $115,000 in August and $118,000 in September. All sales are on account, and accounts receivable is historically collected 15% in the month of sale, 65% in the month following sales, and the remainder two months after the sale. Materials are paid for 40% in the month used and 60% the following month. All other expenses are paid in the month incurred. The cash balance was $35,000 at the beginning of October, and management wants to determine if the company will have enough cash to pay a year-end bonus.
Prepare a three-month cash budget, including a schedule for cash collections and material payments.



Problem 3 (10 points)
Olympic Products Inc. manufactures and distributes barbecue grills. The company normally sells 1,000 of these grills each month for a price of $140 each. The material cost for a grill is $44 and the direct labor is $22. The variable overhead cost is $13 per grill, and the fixed overhead cost is $30,000 per month. A contract manufacturer has approached the company and offered to supply the grills ready to sell for $85 each. The company management believes that if it accepts this offer, Olympic Products will be able to lease unused factory space for $10,000 per month.
Perform a make-versus-buy analysis.

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