managerial accounting homework

1.    For a company with the following data: sales $140,000; variable expense $85,000; fixed expense $36,000; show clearly, in table form or in labeled short answers:

a.    5 points -the contribution ration, and NOI

b.    5 points - degree of operating leverage

c.    5 points - change in NOI from 15% increase in sales

d.    5 points – if variable expenses increase to $90,000, recalculate a and b above.

2.    Assume VFC manufactures and sells a new smart phone for use in overseas environments with un-even wireless reception. The company’s contribution format income statement for the most recent year is:

Total               per Unit      %  of Sales

Sales (20,000 units)                                    $1,300,000      ?                    ?

Variable expense                             $   900,000      ?                    ?

Contribution margin                                    $          ?            ?                    ?

Fixed Expense                                 $   300,000

NOI                                                     $          ?

a.    Complete the missing elements in the statement by reproducing the statement as shown plus adding the ? items in bold – make sure you highlight the answers

b.    compute the contribution ratio and variable expense ratio

c.    compute the company’s break-even point in unit sales and dollars

d.    the company is targeting a profit of at least $150,000: how many units must be sold to achieve this target profit?

Shift, Inc.       In Thousands $

3.                                                    Q1                   Q2                   Q3                   Q4

Total Cash receipts              $340               $670               $410               $470

Total cash disbursed           $530               $450               $430               $480

Beginning cash= $50 (000); minimum cash balance required=$30; borrow to meet cash required on credit line at 2% per quarter; may repay any or all of debt at end of any quarter, plus interest due on any principal as repaid;

Prepare the Company’s cash budget for coming year. (beginning cash + receipts-disbursements - minimum balance +/- debt advances or prepayments-interest paid)

4.    Discuss the concept of the Master Budget, including at least 3 sub-budgets. What is the role of the sales budget?

5.    Compare and briefly discuss the differences in Activity Based Costs and Traditional Costs  including a critique of the ABC system

6.    Explain briefly how predetermined overhead, over and under applied overhead and Manufacturing Overhead are used in a job cost system.