Keisha Okeiga

Sheet1
        25    The correct answer is B i.e. 9000
            Income effect of accepting additional offer
            Particulars    Amount
            Additional sales quantity    1,000
            Sales price per unit    61
            Total sales price (1000*61)    61,000
            Unit variable costs    52
            Variable costs (1000* 52)    52,000
            Income effect of accepting additional offer    9,000
            (sales value- additional variable costs 61000- 52000)
        24    The correct answer is D i.e. 40000 decrease
            Particulars    Amount
            Sales    800,000
            Less: Variable expenses    450,000
            Less: Avoidable costs (380000-70000)    310,000
            Decline in net Income if division is dropped    40,000
            In the case, fixed cost of 70,000 is unavoidable because it will be allocated to another division and rest in avoidable cost. So, there will be net decline in net income by $40,000.
        23    The correct answer is C i.e. $117,000
            Particulars    Amount
            Direct material    40,000
            Direct labor    23,000
            Variable overheads    42,000
            Avoidable fixed costs    12,000
            Price at which buy or make proposal is same    117,000
        22    The correct answer is D i.e. $44,250
            Particulars    Jan    Feb    March
            Month sales    80,000    90,000    100,000
            Less: Cash sales @25%     20,000    22,500    25,000
            Credit sales     60,000    67,500    75,000
            O/s of 50% Mar sales (75000*50%)            37,500
            O/s of 10% Feb sales (67500*10%)            6,750
            Trade receivables as on March 31 (37500+6750)            44,250
        21    The correct answer is E i.e. $95,500
            Particulars    Jan    Feb    March
            Month sales    80,000    90,000    100,000
            Less: Cash sales @25%     20,000    22,500    25,000
            Credit sales     60,000    67,500    75,000
            Collection of 10% Jan sales in March (60000*10%)            6,000
            Collection of 40% Feb sales in March (67500*40%)            27,000
            Collection of 50% Mar sales in March (75000*50%)            37,500
            Add: Cash sales            25,000
            Total collection in March            95,500
        20    The correct answer is B i.e. $52,800
            Particulars    Apr    May    June
            Month purchases    120,000    128,000    132,000
            Payables 40% June purchases (132000*40%)            52,800
        19    The correct answer is B i.e. $288,000
            Particulars    Apr    May    June
            Month sales    290,000    320,000    280,000
            Collection of 20% May sales in June (320000*20%)            64,000
            Collection of 80% June...