Question

39.

Red and White Company reported the following monthly data:

Units produced		3,600	units
Sales price	$	41	per unit
Direct materials	$	7	per unit
Direct labor	$	5	per unit
Variable overhead	$	8	per unit
Fixed overhead	$	9,000	in total

What is Red and White's net income under absorption costing if 1,140 units are sold and selling and administrative expenses are $16,200?

40.

Red and White Company reported the following monthly data:

Units produced		3,600	units
Sales price	$	41	per unit
Direct materials	$	7	per unit
Direct labor	$	5	per unit
Variable overhead	$	8	per unit
Fixed overhead	$	9,000	in total

What is Red and White's net income under variable costing if 1,140 units are sold and operating expenses are $16,200?

46.The Gardner Company expects sales for October of $255,000. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month of sale and 50% in the month following sale. Budgeted Accounts Receivable on September 30 is $70,500. What is the amount of Accounted Receivables on the October 31 budgeted balance sheet?

Answer 1

A	SP per Unit	41
B	Units Sold	1140
C	Sales Revenue A*B	46740
D	Units Produced	3600
E	Cost of production	81000
	(7+5+8) + 9000
F	Cost Per Unit E/D	22.5
G	Profit Per Unit A-F	18.5
H	Gross Profit G*B	21090
I	Less Selling and Admin Expenses	16200
J	Net Income under absorption	4890
H	Variable Costing
I	Net Income under absorption Costing	4890
J	Fixed Cost (9000/3600)	2.5
K	Units Unsold D-B	2460
L	Fixed Cost on Unsold Units	6150
M	NetLoss under Variable Costing	-1260

Total Sale	255000
Cash Sale 40%	102000
Credit Sale 60%	153000
Credit Sale In Oct	153000
Amt Recd In Oct 50%	76500
Amt Recd In Nov 50 %	76500
therefore
Cash Sale	102000
Credit Sale Amt Recd In Oct	76500
Credit Sale Amt Recd In Oct of Sep	70500
	249000