Question one

Suzuki ltd has a division that manufacture two wheel motorcycles. Its budgeted sales for model G in 2012 is 450,000 units. Suzuki target ending inventory is 40000 units and it beginning inventory is 50,000 units. The company budgeted selling price to its distributions and dealers is $4000 per motorcycle.

Suzuki buys all its wheels from an outside supplier. No defective wheels are accepted. (Suzuki needs for extra wheels for replacement parts are ordered by separate division of the company). The company target ending inventory is 30,000 wheels and its beginning is 25000 wheels. The budgeted price is 160 per wheel

Required

1. Compute the budgeted revenues in dollars

2. Compute the number of motorcycles to be produced

3. Compute the budgeted purchase of wheels in units and in dollars

 

Question two

abComp Inc. is a retail distributor for MZB-33 computer hardware and related software. TabComp prepares annual sales forecasts of which the first six months of the coming year are presented below.
Hardware Hardware.

Units Dollar Software Total Sales
January……..130 $390000 $160000 $550000
February……120 $360000 140000 500000
March……… 110 $330000 150000 480000
April……….. 90 $270000 130000 400000
May……….. 100 $300000 125000 425000
June……….. 125 $375000 225000 600000
Cash sales account for 25% of TabComp's total sales, 30% of the total sales are paid by bank credit card, and the remaining 45% are on open account (TabComp's own charge accounts). The cash and bank credit card sale payments are received in the month of the sale. Bank credit card sales are subject to a 4% discount which is deducted immediately. The cash receipts for sales on open account are 70% in the month following the sale, 28% in the second month following the sale, and the remaining are uncollectible.
TabComp's month-end inventory requirements for computer hardware units are 30% of the next month's sales. The units must be ordered two months in advance due to long lead times quoted by the manufacturer.
Required:

1.Calculate the cash that TabComp can expect to collect during April. Show all of your calculations.

2.Tabcomp is determining how many MZB-33 computer hardware units to order on 25 January 2011

a)Determine the number of computer hardware units that should be ordered in January. Show all of your

b)calculate the dollar amounts of the order that Tabcomp will place for these computer hardware units

3.As part of the annual budgets process, tabcomp prepares a cash budgets by months for the entire year. Explain why a company such as tabcomp prepares a cash begets by month for the year

 

Monroe ltd manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour

Direct materials 10kg at $450 per kg $45

Direct manufacturing labour 0.75hour at 30 per hour 22.50

 

The number of finished units budgeted for January was 10000,9550 units were actually produced

Actual results in January were

Direct materials: 98055kg used

Direct manufacturing labour 7300 204400

 

Question three

 

Assume that there was no beginning inventory of either direct materials or finished units. During the month materials purchases amounted to 100000 kg at a total cost of 465000. Price variance are isolated upon purchase. Efficiency variances are isolated at time of usage.

a) Compute the January price and efficiency variances of direct material and direct labour

b) Prepare journal entries to record variances in requirement ( a)

c) Why might Monroe ltd calculate direct materials price variance and direct materials effiecency variances with reference to different points in time