Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three bars based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for July. Chunky 2,000 bars $400 Choco-Lite Budget Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Chewy 2,000 bars $200 Total 4,000 bars $600 8,000 bars $1, 200 140 320 460 920 $ 60 $ 80 $140 24 280 40 40 60 140 $ 20 $ 40 $ 80 $4 140 Marketing and administrative costs (all fixed) 50 Operating profit 90 Actual Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Chewy 1,600 bars $162 Chunky 2,000 bars $400 Total 7,800 bars $1,162 Choco-Lite 4,200 bars $600 112 322 464 898 $ 50 $ 78 $136 $ 264

Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three bars based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for July. Chunky 2,000 bars $400 Choco-Lite Budget Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Chewy 2,000 bars $200 Total 4,000 bars $600 8,000 bars $1, 200 140 320 460 920 $ 60 $ 80 $140 24 280 40 40 60 140 $ 20 $ 40 $ 80 $4 140 Marketing and administrative costs (all fixed) 50 Operating profit 90 Actual Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Chewy 1,600 bars $162 Chunky 2,000 bars $400 Total 7,800 bars $1,162 Choco-Lite 4,200 bars $600 112 322 464 898 $ 50 $ 78 $136 $ 264

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

See similar textbooks

Similar questions

Osborne Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows: The data from the table are as follows: # of planters to be sold January: 3,400 February: 3,800 March: 3,300 April: 4,900 May: 4,600. Inventory at the start of the year was 850 planters. The desired inventory of planters at the end of each month in the upcoming year should be equal to 25% of the following month’s budgeted sales. Each planter requires three pounds of polypropylene (a type of plastic). The company wants to have 20% of the polypropylene required for next month’s production on hand at the end of each month. The polypropylene costs $0.20 per pound. Requirements Prepare a production budget for each month in the first quarter of the year,…
Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year: Sales in units O 3,010 O 3,100 O 3,190 O 2,830 O 3,700 Jan. 2,500 Ending inventory for each month should be 15% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February? Question 8 Feb. 3,100 March. 3,700 April. 2,800 F6 F7 F8
. A company does an ABC analysis of its inventory and calculates that out of 10,000items, 19% can be classified as A items, 30% as B items, and the remainder as Citems. A decision is made that A items are to be cycle counted twice a month, Bitems every 3 months, and C items once a year. Calculate the total counts and thecounts per day by classification. There are 250 working days per year.
Hoffman Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows
Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 522,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 544,000 units, and, in year 2, it expects to sell 648,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 13,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 19,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. (540,000 units for a is incorrect…
Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year: Sales in units O 3,010 O 3,100 O 3,190 O 2,830 O 3,700 Ending inventory for each month should be 15% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February? F2 -0- (@ Jan. 2 2,500 F3 0+ Feb. 3 3,100 March. April. 3,700 F4 2,800 F5 F6 % 5 F7 6 2 F8 7
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Required: 1. Set up the given income statement on a spreadsheet (e.g., ExcelTM). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d). 2. Calculate the break-even units for each product for each of the preceding sales mixes.
Cherboneau Novelties produces drink coasters (among many other products). During the current year (year O), the company sold 535,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 570,000 units, and, in year 2, expects to sell 804,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 19,500 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 22,500 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month's sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. a. Total targeted production in units…
Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 525,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 550,000 units, and, in year 2, it expects to sell 684,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year (year 0) is expected to be only 14,500 units. Each unit requires 0.5 pound of cork. At the end of the current year (year 0), management expects to have 20,000 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements during the coming year (year 1). Sales and production take place evenly throughout the year. Required: Compute the total targeted production of the finished coaster for the coming year. Compute the required amount of cork to be purchased for…
Markle's Inc. had the following transactions during the year: total sales = $610,000; sales discounts = $13,000; sales returns = $36,000; sales allowances = $16,000. In addition, at the end of the year the company estimates the following transactions associated with sales in the current year will occur next year: sales discounts = $1,300; sales returns = $4,320; sales allowances = $2,130. Compute net sales. Total sales Net sales
Bramble Corp. began the year with 10 units of marine floats at a cost of $12 each. During the year, it made the following purchases: May 5, 32 unit at $16; July 16, 19 units at $20; and December 7, 24 units at $23. Assume there are 35 units on hand at the end of the period. Bramble uses the periodic approach. (a) Determine the cost of goods sold under FIFO. FIFO Cost of good sold