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  Use the information below to answer the following question(s).   Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000. Cost of units sold is expected to be 40 percent of sales. All units are paid for in the month following purchase. The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired. Beginning accounts payable is $152,000.   41) Boone Hobbies gross margin for next month is expected to be A) $280,000. B) $336,000. C) $356,000. D) $360,000. E) $240,000.   42) Boone Hobbies budgeted purchases for next month is expected […]

  31) Bottle Company operates many bottling plants around the globe. At its Toronto plant, where nine different brands are bottled, the following costs were incurred in 2012 to produce 15,000,000 cans of soft drink:   1.Development costs of adding the new product “Soda Plus” amounted to $614,000. 2.Material handling costs of inspecting and handling concentrate, bottles, packages, and so forth amounted to $433,500.These costs are allocated to each production run. 3.Incoming materials purchase costs that can be directly traced to individual products being canned and packaged. These costs are purely variable with output level and amounted to $2,213,000. 4.Executive […]

  63) Lubriderm Corporation has the following budgeted sales for the next six-month period:   MonthUnit Sales June90,000 July120,000 August210,000 September150,000 October180,000 November120,000   There were 30,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20 percent of the unit sales for the next month.   Five pounds of materials are required for each unit produced. Each pound of material costs $8. Inventory levels for materials are equal to 30 percent of the needs for the next month. Materials inventory on June 1 was 15,000 pounds. […]

2.4   Questions 1) The horizontal axis on the cost-volume-profit graph is the ________. A) dollars of cost B) sales volume in units C) dollars of revenue D) net income 2) The vertical axis on the cost-volume-profit graph is the ________. A) dollars of cost B) sales volume in units C) dollars of revenue D) dollars of cost and revenue 3) Which of the following is NOT an underlying assumption of cost-volume-profit analysis? A) We can classify expenses into fixed and variable categories. B) Sales mix will be constant. C) Revenues and expenses are linear over the relevant range. D) There […]

25) What is the net effect on operating income as a result of the price-recovery component? A) decreased operating income due to decreased selling price and inability to recover increased costs B) decreased operating income due to the inability to recover increased costs C) increased operating income due to the increased number of units produced and sold D) increased operating income due to the revenue effect of the price-recovery component 26) Overall, was Wingard's strategy successful for 2012? A) No, because the selling price per unit decreased. B) Yes, because operating income increased. C) Yes, because less direct materials were […]