BSE Problem Set 2 Solution

Write your complete solutions and conclusions. Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation? Use this formula: Unit Product Cost = fixed cost + variable cost/ expected unit sales Mark Up Price = Unit Product Cost/ Desired Return on Sale

Betta Jets, a toy wholesaler, is hoping to expand into manufacturing its own products. The business owners have provided you with the following information:   All sales are on credit. The company collects 70% in the month following the sale and 30% two months following the sale. All purchases of stock are paid for one month after the purchase. Equipment costing $250,000 is expected to be acquired and paid for in July. The selling and distribution expenses are $48 000 each month. Administrative expenses are $42 000 per month. This includes $5 000 of depreciation expense. Selling Expenses and Administrative Expenses are paid in the month they are incurred.     The cash balance on 1 July 2022 is $28 000. The following sales and purchases data in 2022 have been compiled for the preparation of the budget:     April May June July   $ $ $ $ Purchases 300 000 360 000 340 000 400 000 Sales 800 000 860 000 840 000 880 000   REQUIRED: Prepare…

answer in 20 minutes Imperial Jewelers manufactures and sells a gold bracelet for $407.00. The company’s accounting system says that the unit product cost for this bracelet is $274.00 as shown below:   Direct materials    $ 148Direct labor    90Manufacturing overhead    36Unit product cost    $ 274  The members of a wedding party have approached Imperial Jewelers about buying 26 of these gold bracelets for the discounted price of $367.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $13. Imperial Jewelers would also have to buy a special tool for $456 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed.   To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period.…

Consider the following scenario between Dave, a printer, and Steve, an assistant in the localuniversity’s athletic department.Steve: Dave, our department needs to have 10,000 posters printed for the basketball team fornext year. Here’s the mock-up, and we’ll need them in a month. How much will you charge?Dave: Well, given the costs I have for ink and paper, I can come in at around $5,000.Steve: Great, here’s what I want you to do. Print me up an invoice for $7,500. That’s our budget.Then, when they pay you, you give me a check for $2,500. I’ll make sure that you get the job.Required:CONCEPTUAL CONNECTION Is Steve’s proposal ethical? What should Dave do?

Her predicted sales are as follows Jan Feb Mar April May June July   300 350 350 450 500 550 600               The candles cost $5 to make, and sell for $12.       Roxy buys in the raw materials the month before she sells the candles. She pays a deposit of 20% when she orders and the rest the following month   At the start of the year she owed $1,000 to supplier for the previous month       Her customers pay 75% in the month of purchase and 25% the following month       She pays rent of $1,000 on the shop in cash during the month before it is due        She pays cash wages of $500 a month during the month       Her other running costs are $900 a month, but this includes $200 for depreciation of the candle making machine   In month 4 in the forthcoming year she intends to invest $5,000 on a new machine       At the start of the year she has a Bank balance of $3,500 and is owed $600 from sales from the previous year, all of which will be collected in month 1…

Ty Enterprise wants to start a business in the field of shirts production.His company estimate the average sales of production is RM30500 per month.The prove of a shirt is RM25.Working time is between 8.30a.m until 12.30p.m and 2.30p.m until 6.30p.m for 24 working days in a month, calculate the number of cutting machines required if the time needed to cut a piece of shirt takes 30 minutes

Give typing answer with explanation and conclusion Brookes, Inc. expects to sell 700 of its designer suits every week. The store is open seven days a week and expects to sell the same number of suits every day. The company has an economic order quantity (EOQ) of 500 suits and a safety stock of 100 suits. Once an order is placed, it takes three days for Brookes to get the suits in. How many orders does the company place per year? Assume that it is Monday morning before the store opens, and a shipment of suits has just arrived. When will Brookes place its next order?

Ronald’s Pizza produces and sells the secret recipe pizzas. Each pizza sells for RM20.00. During December, Ronald’s sold 25,000 pizzas (the average amount sold each month). The restaurant employs cooks, servers and one supervisor (the owner, Black). All cooks and servers are part time employees. Ronald’s maintain a pool of part time employees so that the number of employees scheduled can be adjusted to the changes in demand. Demand varies on a weekly as well as a monthly basis. A Janitor is hired to clean the building on a weekly basis. The building is leased from a local real estate company. The building has no seating capabilities. All orders are filled on a drive-through basis. The supervisor schedules work, opens the building, counts the cash, advertises, and responsible for hiring and firing. The following costs were incurred during December. Cost Amount Cost Amount Flour        2,500 Utilities       1,500 Meat            950 Depreciation:   Seafood            500 Cooking…

Scare-2-B-U (S2BU) specializes in costumes for all occasions. The average price of each of its costumes is $340. For each occasion, S2BU receives a 10 percent deposit two months before the occasion, 50 percent the month before, and the remainder on the day the costume is delivered. Based on information at hand, managers at S2BU expect to make costumes for the following number of occasions during the coming months.          April   60   May   30   June   20   July   45   August   50   September   125     Required: a. What are the expected revenues for S2BU for each month, April through September? Revenues are recorded in the month of the occasion. b. What are the expected cash receipts for each month, April through July?

Problem Solving: Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year. a. How many number 6 screws should Lila order at a time if she wishes to minimize total inventory cost? b. How many orders per year would be placed? What would the annual ordering cost be? c. What would the average inventory be? What would the annual holding cost be?

Lia ITZY has determined that the annual demand for number 6 screws is 100,000 screws. Lia, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year. QUESTION: What would the average inventory be? What would the annual holding cost be?

What are Jenny’s fixed costs for the month? Jenny’s Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Jenny’s offers 15-minute haircuts with a shampoo for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, Jenny schedules her 5 employees based on expected client traffic. Each of the employees is paid $1200 per month, with part of their pay coming from client tips. Jenny pays rent and overhead costs of $2000 per month for the facility. Because of the quick nature of the service, Jenny doesn’t have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.55 each. She also provides shampoo and conditioner for each client at a cost of $0.95 per client. The average price for a haircut is $12. Jenny pays herself $5000 per month.

Davy Johnson is CFO for a newly formed manufacturing company.  Below is the anticipated monthly production for the first six months of operation.  Davy is interested in learning which of the first six months will require cash outlays of more than $40,000 toward the purchase of materials.  Each unit requires 5 pounds of material at $10 per pound.  All material is purchased in the month prior to its expected use.  Purchases are paid for 10% in the month of purchase, 40% in the month following the month of purchase, and 50% in the second month following the month of purchase. Compute the total amount paid for April.

Davy Johnson is CFO for a newly formed manufacturing company.  Below is the anticipated monthly production for the first six months of operation.  Davy is interested in learning which of the first six months will require cash outlays of more than $40,000 toward the purchase of materials.  Each unit requires 5 pounds of material at $10 per pound.  All material is purchased in the month prior to its expected use.  Purchases are paid for 10% in the month of purchase, 40% in the month following the month of purchase, and 50% in the second month following the month of purchase. Compute the total amount paid for March.

1.Susanna runs a hat shop in Melbourne, VIC. During the FY20, she bought 300 hats for $99 each (incl GST) and sold those hats for $220 each (incl GST). How much should Susanna remit to the ATO once all the hats are sold? Briefly explain your calculations.

Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 50 percent of their fees in the month the service is provided. In the month following service, Paul collects 40 percent of service fees. The final 10 percent is collected in the second month following service. Paul purchases his supplies on credit and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 85 percent is used in the month of purchase, and the remainder is used in the month following purchase. The following information is available for the months of June, July, and August, which are Paul’s busiest months: June 1 cash balance $16,000. June 1 supplies on hand $4,400. June 1 accounts receivable $9,100. June 1 accounts payable $4,300. Estimated sales for June, July, and August are $27,300, $41,000, and $43,900, respectively.…

Sharon’s Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Sharon’s offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $1220 per month, with part of their pay coming from client tips. Sharon pays rent and overhead costs of $2400 per month on the facility. Because of the quick nature of the service, Sharon doesn’t have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.50 each. She also provides shampoo and conditioner for each client at a cost of $1.05 per client. The average price for a haircut is $13. Sharon pays herself $5600 per month. What is Sharon’s contribution margin per haircut? $11.45 $11.95 $12.50 $11.15

Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 50 percent of their fees in the month the service is provided. In the month following service, Paul collects 40 percent of service fees. The final 10 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 70 percent is used in the month of purchase, and the remainder is used in the month following purchase.   The following information is available for the months of June, July, and August, which are Paul’s busiest months:   June 1 cash balance $14,500. June 1 supplies on hand $3,900. June 1 accounts receivable $8,100. June 1 accounts payable $3,800. Estimated sales for June, July, and August are $24,300, $36,500, and $38,900,…

Olga was planning to set up a business where she would purchase paintings for $1,050 per unit and sell them for $1,800 per unit. She wanted to conduct a break-even analysis and identified the following costs for running her business: $4,470.00 per month for store leasing, $54 per month website hosting fee, $5,150 per month for staff salary, $2,040 per month for advertising costs, and $25 per unit for labour charges to pack the paintings. a. How many paintings would she have to sell per month to break-even?   Round up to the next whole number b. If she wants to make a profit of $24,000 in a month, how many paintings would she have to sell?   Round up to the next whole number

Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).To make its bulb products, Bright Night requires 36,000 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:• Central Glass Company: $30.00 per pound of glass. Delivery schedule: 36,000 (400 lbs. × 90 days) pounds at the beginning of July to last for 3 months.• Ithaca Glass Company: $30.20 per pound of glass. Delivery schedule: 400 pounds per working day (90 days in the quarter).Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.Instructions1. Comment on Bright Night’s purchasing policy.2. What are the additional (hidden) costs, beyond price, of Central Glass…

6. Kristine is distributor  of brass picture frames for P45. For 2022, she plans  to purchase for P30 each and sell them  for P45 each. Kristine's fixed costs are expected  to be P240,000. Kristine's  only other costs will be variable costs of P60 per shipment  for preparing the invoice and delivery documents, organizing the delivery , and following up for collecting accounts receivable. The P60 cost will be  incurred each time Kristine ships an order of picture frames, regardless of the number of frames in the  order. Suppose Kristine sells 40,000 picture frames in 1,000 shipments in 2022,  what is Kristine's operating income for 2022?

One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally,administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house…

Dylon Shops estimates the average sales of production is RM30500 per month.The price of shirt is RM25, working time is between 8.30a.m until 12.30p.m. and 2.30p.m until 6.30p.m. for 24 hours working days in a month , calculate the number of tailors needed if one tailor can sew a shirt about 1.5 hours ?

Q1 Bauss Company, a manufacturer of bicycles, started its production in December 2019. For the preceding 5 years Boss Co. had been a retailer of bicycles. After a thorough survey of bicycles markets, management of the Bauss Co. decided to turn its retail store into a bicycles manufacturing factory. Cost of steel frame for a bicycles will total to $80 per unit. The cost of tires for every bicycle would be $25. Workers on the production lines are on average paid $35 per hour. A bicycle usually takes 8 hours to complete. In addition, the rent on the equipment used to assemble bicycle amounts to $6,000 per month. Indirect materials cost $7 per bicycle. A supervisor was hired to oversee production; her monthly salary is $3,500. Factory cleaning costs are $1,500 monthly. Utility costs amounts to $250 per month. Advertising costs to sell bicycles will be 10,500 per year. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $9,900 per…

The Sandstone Corporation uses an injection molding machine to make a plastic product, Z35, after receiving firm orders from its customers. Sandstone estimates that it will receive 60 orders for Z35 during the coming year. Each order of Z35 will take 100 hours of machine time. The annual machine capacity is 8,000 hours. Q. Calculate (a) the average amount of time that an order for Z35 will wait in line before it is processed and (b) the average manufacturing cycle time per order for Z35.