At December 31, 2012, the Accounts receivable balance of Solar Energy Manufacturing (A+ Guaranteed)

At December 31, 2012, the Accounts receivable balance of Solar Energy Manufacturing is $170,000. The Allowance for doubtful accounts has a $10,100 credit balance. Solar Energy Manufacturing prepares the following aging schedule for its accounts receivable:

Accounts Receivable: 1-30 days 31-60 days 61-90 days over 90 days   

$170,000 $70,000 $50,000 $30,000 $20,000

Estimated % uncollectible 0.6% 3.0% 9.0% 40.0%

Requirements
R1.
Journalize the year-end adjusting entry for doubtful accounts on the basis of the aging schedule. Show the T-account for the Allowance for uncollectible accounts at December 31, 2012.
R2. Show how Solar Energy Manufacturing will report Accounts receivable on its December 31, 2012, balance sheet.

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Razmon’s Jewelers has accumulated the following budgeted overhead information (A+ Guaranteed)

Razmon’s Jewelers has accumulated the following budgeted overhead information (dollar amounts may include both fixed and variable costs):

Direct Labor Hours
2,000 hours 3,000 hours
  Maintenance $ 12,000 $ 17,000
  Depreciation 8,000 8,000
  Manager’s salary 45,000 45,000
  Indirect supplies 3,200 4,700
  Utilities 1,000 1,200
  Other 8,500 9,000

 

Use this information to create the overhead budget for 2,800 direct labor employee hours.

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First Apple Computers Company manufactures one product (A+ Guaranteed)

First Apple Computers Company manufactures one product. If its variable manufacturing cost is $18 per unit; total fixed manufacturing cost is $500,000: Required:

1) Calculate First Apple’s total manufacturing costs if it produces 10,000 units.

2) What would be the total cost per unit (including both fixed and variable costs) assuming that Best Apple produces 10,000 units?

3) Calculate First Apple’s total manufacturing costs if it produces 20,000 units.

4) What would be the total cost per unit assuming that First Apple produces 20,000 units?

5) Compare your answers from parts 2 and 4. If the cost per unit is different at 10,000 units than at 20,000 units, explain why.

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Best Detroit Asphalt Inc., a manufacturer of premium quality asphalt (A+ Guaranteed)

Best Detroit Asphalt Inc., a manufacturer of premium quality asphalt, has given you the following data as is requesting your help:

Tons of asphalt produced and sold ………………….…… 220,000

Sales revenue ……………………………………………… $924,000

Variable manufacturing expense ………………………… $297,000

Fixed manufacturing expense ……………………………. $280,000

Variable selling and admin expense ………………………$165,000

Fixed selling and admin expense ………………………….. $82,000

Net operating income ………………………………………  $100,000

Required:

a. Calculate the company’s unit contribution margin.

b. Calculate the company’s unit contribution ratio.

c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company’s net operating income be?

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MBA 565 QUIZ 3 (A+ Guaranteed)

1.In ________ marketing, the firm operates in several market segments and designs different products for each segment. (Points : 5)

segmented
undifferentiated
differentiated
geodemographic
niche

2. In evaluating different market segments, the firm must look at two factors: the segment’s overall attractiveness and ________. (Points : 5)

company’s objectives and resources
the product to be sold
the purchasing process
competition’s strategies
the global nature of the product

3. In principle, business buyers seek to ________ in relation a market offering’s costs. (Points : 5)

spread risks
obtain the highest benefit package
maintain everyday low prices
outsource as much as is possible
eliminate partners’ shares in profits as much as possible

4.________ is composed of all parties who participate in the purchasing decision-making process and share common goals and risks associated with their decisions. (Points : 5)

The buying center
The marketing sales team
Strategic management
Engineering support
The logistics center

5. All of the following are methods of assessing customer value EXCEPT ________. (Points : 5)

direct survey questions
exit interviewing
focus-group value assessment
conjoint analysis
benchmarks

6.Webster cautions that ultimately, ________ make purchasing decisions. (Points : 5)

only senior managers
individuals, not organizations,
organizations, not individuals,
third parties
systems contractors

7. Johnson & Johnson broadened its target market for its baby shampoo to include adults through ________. (Points : 5)

Counter segmentation
metamarketing
undifferentiated marketing
product specialization
single-segment concentration

8. If a market is segmented according to light, medium, and heavy product users, the marketer segmenting this market is using the ________ as the means to segment. (Points : 5)

user status
usage rate
buyer-readiness stage
occasion
benefit

9. When buyers cannot easily monitor supplier performance, the supplier might shirk or cheat and not deliver the expected value. ________ is “some form of cheating or undersupply relative to an implicit or explicit contract.” (Points : 5)

Institutional sale
Opportunism
Business buying
Vertical integration
Contractual transactionism

10. Many business buyers prefer to buy a total solution to a problem from one seller. ________ is the correct term for this process. (Points : 5)

Channel consolidation
Systems buying
Vertical buying
Horizontal buying
Supply buying

11. The total demand for many business goods and services is ________ —that is, not much affected by price changes. (Points : 5)

derived
fluctuating
accelerated
multiple
inelastic

12. Business markets differ significantly consumer markets in that business markets possess all of the following characteristics EXCEPT ________. (Points : 5)

fewer, larger buyers
close supplier-customer relationship
professional purchasing
inverted demand
multiple sales calls

13. In the proposal solicitation process, ________ should be marketing documents that describe value and benefits in customer terms. (Points : 5)

written proposals
oral proposals
e-proposals
alliance proposals
global proposals

14. A company can be said to have used ________ if the company distinguished among customers buying on the basis of price, service, and quality. (Points : 5)3

macrosegmentation
microsegmentation
strategic segmentation
global segmentation
short-term segmentation

15. ________ is a key industrial marketing strategy in bidding to build large-scale industrial products (e.g., dams, pipelines, et cetera). (Points : 5)

Systems contracting
Systems buying
Systems selling
Solutions buying
Turnkey logistics

16. According to the ________ criterion for useful market segments, a segment should be the largest possible homogenous group worth going after with a tailored marketing program. (Points : 5)

measurable
substantial
accessible
differentiable
actionable

17. A marketer is interested in segmenting a business market based on technology and customer capabilities. Which of the following major segmentation variables would most likely be used by the marketer to assist with the task? (Points : 5)

Demographic variables
Purchasing approaches
Situational factors
Personal characteristics
Operating variables

18.The purchasing department buys office supplies on a routine basis. This type of purchase is classified as a ________. (Points : 5)

straight rebuy
modified rebuy
new task
secondary purchase
preordained purchase

19.If a marketing manager observes that his or her market shows no natural segments and consumers seem to have roughly the same preferences, the marketing manager will most likely be faced with a ________ preferences pattern. (Points : 5)

homogeneous
heterogeneous
diffused
clustered
scattered

20. Marketers usually identify niches by ________. (Points : 5)

dividing a segment into subsegments
conducting VALS tests
allowing consumers to gravitate toward product brands
examining the demographics section of The Handbook of Marketing
producing products that can be used in a variety of ways

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Luganos Pizza Parlor is considering the purchase of a large oven

Luganos Pizza Parlor is considering the purchase of a large oven and related equipment for mixing and baking crazy bread. The oven and equipment would cost $104,000 delivered and installed. It would be usable for about 20 years, after which it would have a 10% scrap value. The following additional information is available:

a. Mr. Lugano estimates that purchase of the oven and equipment would allow the pizza parlor to bake and sell 60,000 loaves of crazy bread each year. The bread sells for $1.30 per loaf.

b. The cost of the ingredients in a loaf of bread is 40% of the selling price. Mr. Lugano estimates that other costs each year associated with the bread would be as follows: salaries, $17,000; utilities, $7,000; and insurance, $2,000.

c. The pizza parlor uses straight-line depreciation on all assets, deducting salvage value from original cost. (Ignore income taxes.)

Required: 1. Prepare a contribution format income statement showing the net operating income each year from production and sale of the crazy bread. (Input all amounts as positive values.)

2a. Compute the simple rate of return for the new oven and equipment. (Round your answer to 1 decimal place.) Simple rate of return %

2b. If a simple rate of return above 12% is acceptable to Mr. Lugano, will he purchase the oven and equipment? No Yes

3a. Compute the payback period on the oven and equipment. Payback period ________ years

3b. If Mr. Lugano purchases any equipment with less than a six year payback, will he purchase this equipment? Yes No

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Renfree Mines, Inc., owns the mining rights to a large tract of land in a mountainous area

Renfree Mines, Inc., owns the mining rights to a large tract of land in a mountainous area. The tract contains a mineral deposit that the company believes might be commercially attractive to mine and sell. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:

Cost of equipment required $ 960,000

Annual net cash receipts $ 325,000*

Working capital required $ 235,000

Cost of road repairs in six years $ 68,000

Salvage value of equipment in eight years $ 350,000

*Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.

The mineral deposit would be exhausted after eight years of mining. At that point, the working capital would be released for reinvestment elsewhere. The companys required rate of return is 13%. (Ignore income taxes.)

Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables.

Required:

a. Determine the net present value of the proposed mining project.

(Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar.) Net present value $

b. Should the project be accepted? No Yes

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For many years Futura Company has purchased the starters that it installs

For many years Futura Company has purchased the starters that it installs in its standard line of farm tractors. Due to a reduction in output, the company has idle capacity that could be used to produce the starters. The chief engineer has recommended against this move, however, pointing out that the per unit cost to produce the 55,000 starters needed would be greater than the current $14.90 per unit purchase price:

 Per Unit Total
  Direct materials $ 5.00
  Direct labor 3.50
  Supervision 1.40 $ 77,000
  Depreciation 1.20 $ 66,000
  Variable manufacturing overhead 0.50
  Rent 0.50 $ 27,500
  Total product cost $ 12.10

 

A supervisor would have to be hired to oversee production of the starters. However, the company has sufficient idle tools and machinery so that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $86,000 per period. Depreciation is due to obsolescence rather than wear and tear.

Required:

1. Determine the total relevant cost per unit if starters are made inside the company. (Round your answer to 2 decimal places.)

2. Determine the total relevant cost per unit if starters are purchased from an outside supplier. (Round your answer to 2 decimal places.)

3. What is the increase or decrease in profits as a result of purchasing the starters from an outside supplier rather than making them inside the company? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

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Han Products manufactures 26,000 units of part S-6 each year for use on its production line

Han Products manufactures 26,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is:

  Direct materials $ 4.90
  Direct labor 5.00
  Variable manufacturing overhead 2.90
  Fixed manufacturing overhead 15.00
  Total cost per part $ 27.80

 

An outside supplier has offered to sell 26,000 units of part S-6 each year to Han Products for $44.00 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $682,200. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.

Required:

a. Calculate the per unit and total relevant cost for buying and making the product? (Round your answer to 2 decimal places.)

b. How much profits will increase or decrease if the outside supplier’s offer is accepted?

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Andora Company reported the following information for the month

Andora Company reported the following information for the month of November. The standard cost of labor for the month was $37,800, but actual wages paid were $40,400. Andora has calculated its direct labor rate and efficiency variances to be $650 favorable and $3,250 unfavorable, respectively.

Prepare the necessary journal entry to record Andora’s direct labor cost for the month, assuming that standard labor costs are recorded directly to Cost of Good Sold. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.)

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