For January, sales revenue is $600,000, sales commissions are 5% of sales; the s

Question

For January, sales revenue is $600,000, sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $80,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are; $157,100 $223,100 $183,750 $182,100 McCable Manufacturing Co.'s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000. At 8,000 units of production, a flexible budget would show: variable costs of $64,000 and $25,875 of fixed costs variable costs of $64,000 and $25,000 of fixed costs variable costs of $72,000 and $25,000 of fixed costs variable and fixed costs totaling $112,000 Machine Manufacturers, Inc. projected sales of 66,000 machines for 2008. The estimated January 1, 2008. Inventory is 6,500 units, and the desired December 31, 2008, inventory is 7,000 units. What is the budgeted production (in units) for 2008? 65,500 66,000 66,500 65,000

Explanation / Answer

10.
Sales Rev 600000
Sales exp :
Sales comm 5% 30000
Salary SM $96,000
Advtg Exp $80,000
Shipping 2% $12,000
Misc exp $5,100
------------------------------
Sales exp = $223,100 ..................Ans 10(b)

11.

No of Units 5000 8000

Dir Lab 40000 64000

Elect Pow $5,000 $8,000

Var costs $45,000 $ 72,000   

Fixed costs don't vary with volume.

SO Ans is 11(c) Var costs 72000 & FC 25000

12. Unit sold = Op Inv + Prod - Ending Inv

SO Prod = Unit sold + Ending Inv - Op Inv

= 66000+7000-6500 = 66500 units ........Ans 12 (C)

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