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Question
Sherman Company can sell all of its products A and Z that it can produce, but it has limited production capacity. It can produce 6 units of A per hour or 10 units of Z per hour, and it has 20,000 production hours available. Contribution margin per unit is $12 for A and $10 for Z. What is the most profitable sales mix for this company?
A. 84,000 units of A and 60,000 units of Z.
B. 48,000 units of A and 80,000 units of Z.
C. 60,000 units of A and 100,000 units of Z.
D. 120,000 units of A and 0 units of Z.
E. 0 units of A and 200,000 units of Z.
Answer
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Related questions
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Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
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A fixed budget performance report never provides useful information for evaluating variances.
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A variable or flexible budget is so named because it only focuses on variable costs.
Q:
Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000.
d. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30.
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g. Accrued income taxes due in June: $48,000.
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Q:
Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30.
a. Beginning cash balance on June 1 is $52,000.
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When recording the journal entry for labor, the Goods in Process Inventory account is
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Q:
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
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B. $28,000 unfavorable.
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Q:
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B. $120 favorable.
C. $400 favorable.
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C. Control purposes only.
D. Planning and control purposes.
E. Planning and budgeting purposes.