1. Brooklyn sells a single product to wholesalers. The company\'s budget for the
ID: 2466554 • Letter: 1
Question
1. Brooklyn sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 35,100, a selling price of $24, variable cost per unit of $10, and total fixed costs of $387,000. If Brooklyn's unit sales are 350 units less than anticipated, its breakeven point will:
increase by $10 per unit sold.
not change.
decrease by $10 per unit sold.
increase by $14 per unit sold.
decrease by $14 per unit sold.
2. Wolverine, Inc. began operations on January 1 of the current year with a $11,300 cash balance. 50% of sales are collected in the month of sale; 50% are collected in the month following sale. Similarly, 10% of purchases are paid in the month of purchase, and 90% are paid in the month following purchase. The following data apply to January and February:
8,300
If operating expenses are paid in the month incurred and include monthly depreciation charges of $1,800, determine the change in Wolverine's cash balance during February.
$2,550 increase.
Some other amount.
$12,400 increase.
$4,350 increase.
$14,200 increase.
3. Tidewater plans to sell 84,000 units of product no. 794 in May, and each of these units requires 3 units of raw material. Pertinent data follow.
On the basis of the information presented, how many units of raw material should Tidewater purchase for use in May production?
261,000.
225,000.
279,000.
Some other amount.
243,000.
January February Sales $ 28,000 $ 48,000 Purchases 26,500 33,000 Operating expenses 6,3008,300
Explanation / Answer
Sales volume will not effect the Break even point
2.
Wolverine Inc
Cash Budget
Particulars
Janurary
February
Increase
Beg Cash
$ 11,300
$ 18,150
Cash Receipts:
Current Sale Collection
$ 14,000
$ 24,000
Previous Month sale
$ 14,000
Total Cash Available
$ 25,300
$ 56,150
Cash Disbursments:
Current Purchase payment
$ 2,650
$ 3,300
Previous Month purchase
$ 23,850
Operating Exp
$ 4,500
$ 6,500
Total Cash disbursment
$ 7,150
$ 33,650
Endig Balance
$ 18,150
$ 22,500
$ 4,350
$4,350 increase
3.
Production Budget
Particulars
May
Sales
84,000
Less : Beginning Inventory
(10,900)
Add: Ending Inventory
16,900
Total
90,000
Raw Material Purchase Budget
Particulars
May
Production
90,000
Raw Material Per Unit
3
Total Raw Material required
270,000
Less : Beginning Inventory
(28,900)
Add: Ending Inventory
19,900
Raw Material to be Purchased
261,000
Wolverine Inc
Cash Budget
Particulars
Janurary
February
Increase
Beg Cash
$ 11,300
$ 18,150
Cash Receipts:
Current Sale Collection
$ 14,000
$ 24,000
Previous Month sale
$ 14,000
Total Cash Available
$ 25,300
$ 56,150
Cash Disbursments:
Current Purchase payment
$ 2,650
$ 3,300
Previous Month purchase
$ 23,850
Operating Exp
$ 4,500
$ 6,500
Total Cash disbursment
$ 7,150
$ 33,650
Endig Balance
$ 18,150
$ 22,500
$ 4,350
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