Know Management Formula

Question 1

1. A company sell pretzels for $1.50/bag. Their February ending inventory was $1600. Marketing prepares the following forecast:
   January 15,000 bags
   February 12,000 bags
   March 16,000 bags
   Total 43,000 bags
   Projected sales for April 13,000 bags. Try to maintain 10% of the next month’s forecasted sales in inventory. What is the projected for march?

Same info as no 1. What is the sales budget for January?

Answer 1

SECOND NUMBER TIMES BY %
Think- January=15,000

(c ) 15,700

March= 16,000
April 13,000 (0.10) = 1300
March+April-Ending Inventory
16,000 + 1,300 = 17,300, 17,300 – 1600 = 15,700

Second answer
January+February(.10)= 16,200 (1.50 perbag)

15,000 + 12,000 (0.10) = 16,200 (1.50)=24,300

Question 2

Selected sales and cost data for a special job are given below
Direct material used 100,000
Direct labor 150,000
Factory overhead (100% direct, 40% variable) 75,000
Selling and administration ( 50% direct, 60% variable)120,000
Complete the Total Cost:

Answer 2

A

Complete the Total Cost: A. 352,000
100,000 + 150,000 + 30,000 (75000 X 0.40) + 72,000 (120000 X 0.60)

MULTIPLY BY VARIABLE
DM+DL+FOH(Variable)+Selling and admin(0.60)

Question 3

What is break even point in units? 
		Sale price		$7.50 per unit
		Variable cost		$2.25 per unit
		Fixed cost		$10,000
		Units sold		20,000

Answer 3

b. 1905 (7.50-2.25=5.25) & (1000/5.25)

Sales price - Variable cost=5.25

Fixed Cost/Answer=1905

Question 4

kamp corporation has the following info
Unit sales price 		$10
Total fixed cost 		$50,000
Variable cost per input 	$6
Compute contribution margin?

Answer 4

4

10-6=4

Question 5

Hilton Corporation had sales revenue of $1,105 for the month. Marketing expenses for the month were $60 and administrative expenses were $50

Inventory classification 1st day of the month end of month
Direct material $60 $70
Work in process 120 115
Finished goods 150 165

During the month, Hilton purchased $250 of raw materials and spent $400 of direct labor. Other manufacturing costs such supervisory salaries and utilities were $90 and plant equipment depreciation was $100.

Direct materials used for the month are?

Answer 5

A. 240 [(60+250)-70=240]

DIRECT MATERIAL SO LOOK AT ONLY DM

60+250=310 - 70=240

Question 6

52. Scuffy has the following product information
Sales price $7.50 per unit
Variable cost $2.25 per unit
Fixed cost $10,000
Units sold 20,000
What is breakeven point in sales?

Answer 6

1905 7.50-2.25=5.25
10000/5.25=1905

Sales price - Variable cost=5.25
Fixed Cost/Answer=1905

LOOK AT THIS BREAKEVEN POINT

Question 7

Scuffy has the following product information.
Sales price $7.50 per unit
Variable cost $2.25 per unit
Fixed cost $10,000
Units sold 20,000

What is total contribution margin?

Answer 7

Contribution margin = Sales revenue – Variable expense. 105000 (7.5 X 20,000) – (2.25 X 20,000) = 105000

(Sales Price x Unit Sold) - (Variable x Units Sold)
LOOK AT THIS TOTAL CONTRIB MARGIN

Question 8

Selected sales and cost data for a special job are below

Direct materials used $100,000
Direct labor 150,000
F overhead 75,000 (100% indirect, 40%variable)
Selling and administration 120,000(50% direct, 60% variable)
Compute the period costs?

Answer 8

60000 (120,000 X 0.50)

Period think of #6 and 000000

Selling and admin x Direct

Question 9

Selected sales and cost data for a special job are below:
Direct materials used $100,000
Direct labor 150,000
F overhead 75,000 (100% indirect, 40%variable)
Selling and administration 120,000(50% direct, 60% variable)

What is the Prime Cost

Answer 9

Prime costs = Direct material + Direct Labor
100,000+150,000 250000

A

Question 10

D.M -- $7000
D.L --  $2000
M. Overhead - $10,000                        
Work-in-process(bb)      $ ?
End work in process$4000
Cost of Goods Manufactured $18,000  
Revenue  $25,000                       F.Goods(bb)$6000
Cost of Gods Sold $ ?
F. Goods(eb)$9000
Operating expense$6000
Net income $ ? 
Gross margin (profits)$ ?
       What is the cost of good sold?

Answer 10

(c) 15,000

F.Good (bb) + CGM – F.Good (eb) = CGS

18,000+6,000=24,000-9000=15,000

Cost of Goods Manufactured $18,000
Fixed Goods$6000
Cost of Gods Sold $ ?
Fixed Goods)$9000

Question 11

The following information is provided for company Z.
Per unit Total %
Sales revenue (1500 units) $37,500
Variable costs $15,000 40
Contribution Margin $22,500
Fixed cost $15,000
Net income$7,500

What are the Fixed costs per unit?
What is the price per unit?

Answer 11

Fixed cost per unit:(a) $10.00
15,000/1500
Fixed cost/Units

Price per unit: 37,500/1500)= 25

LOOK AT UNITS. That line. And then divide

Question 12

Hilton Corporation had sales revenue of $1,105 for the month. Marketing expenses for the month were $60 and administrative expenses were $50

Inventory classification
1st day of the month end of month
Direct material $60 $70
Work in process $120 $115
Finished goods $150 $165

During the month, Hilton produced and transferred into finished Goods units with a
Cost of $915. The cost of good sold for the month was

Answer 12

D. $900

Finished goods start+ Cost=1065 - End

Question 13

David has the following product information.
          Sales price 7.50 a unit
          Variable cost 2.25 a unit
          Fixed cost $10,000
    Units sold 20,000      

What is the contribution margin per unit?

Answer 13

B

5.25
CONTRIBUTION MARGIN PER UNIT

Question 14

David has the following product information.
 Sales price 7.50 a unit
Variable cost 2.25 a unit
Fixed cost $10,000
Units sold 20,000      
What is the contribution margin ratio?

Answer 14

CM ratio = CM / C. 70%

5.25 X 20000 / 7.50 X 20000

(Sale price-Variable) x Units sold= Y
Y/Sales price x Units Sold