Information from the records of the Valley Manufacturing Company for August 2014 follows: Sales $210,000 Selling and administrative expenses 85,000 Purchase of raw materials 30,000 Direct Labor 20,000 Manufacturing overhead 37,000 Raw materials $ 8,000 $ 5,000 Work-in-process 14,000 11,000 Finished goods 15,000 19,000 Prepare a statement of cost of goods manufactured and an income statement for August 2014. (Do so on separate sheet or sheets of paper via Word document or Excel spreadsheet.) Patel Company does contract manufacturing of compact video cameras. At the Pacific plant, cost control has become a concern of management. The actual costs per unit for the years 2013 and 2014 were as follows: Direct Materials: Plastic case $ 4.50 $ 4.40 Lens set 17.00 17.20 Electrical component set 6.00 5.70 Film track 11.00 10.00 Direct Labor 32.00 (1.6 hours) 30.00 (1.5 hours) Indirect manufacturing costs Variable 7.50 7.10 Fixed 3.00 (100,000 unit base) 2.85 (120,000 unit base) 1. If continuous improvement (Kaizen) costing sets a first-year target of a 5 percent reduction of the 2013 base, how successful was the company in meeting 2014 per unit cost reduction target? Support your answer with appropriate computations. (You may do computations on separate she
et of paper via Word document or Excel spreadsheet.) 2. Evaluate and discuss PatelÂ’s use of Kaizen costing. WilsonÂ’s Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: January $300,000 February 250,000 March 200,000 April 150,000 All sales are on credit: 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $42,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000. Prepare monthly cash budgets for February, March, and April. (Do so on separate sheet or sheets of paper via Word document or Excel spreadsheet.) Snow Devil Company is evaluating a capital expenditure proposal that requires an initial investment of $32,312, has predicted cash inflows of $8,000 per year for seven years, and has no salvage value. (Do so on separate sheet or sheets of paper via Word document or Excel spreadsheet.) 1. Using a discountrate of 10 percent, determine the net present value of the investment proposal. 2. Determine the proposalÂ’s internal rate of return.