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6000 6000000
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6000+6000000
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Answer to a math question 6000+6000000
Madelyn
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Sol:6006000
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CASE 6-1: PREPARE A PRODUCTION PLAN: WHAT PROBLEMS ARRIVE? Midwest Plastics Company has conducted profit planning for several years. The president stated (with justification) that inventory control and planning had not been satisfactory, which was mainly due to poor planning of production and inventory budgets. Please analyze and provide recommendations, in detail, on the issue regarding the 20B profit plan, which is now being prepared. Their analysis and recommendations will be presented to the executive committee. Despite the seasonality factor, the sales department has been successful in developing a sales plan, on a monthly basis, for each year. The following sales data is available for 20B. 1. Sales plan summary for 20B: 2. Finished goods inventory, as of January 1, 20B, is 96,000 units. 3. Work-in-process inventory will remain constant. 4. Actual annual sales in 20A, including the estimate for December, were 350,000 units. 5. The average finished goods inventory during 20A was 70,000 units. IT IS REQUESTED. 1. Prepare the annual production budget, assuming that management policy is to budget ending finished goods inventory at a standard quantity, based on the ratio of historical sales of 20A to inventory turnover. 2. Prepare a schedule showing sales, production, and inventory levels for each month, assuming: 1) stable inventory, 2) stable production, and 3) recommended inventory-production levels. In developing your recommendations, assume that the following policies have been established: a) The president has set the policy that a maximum inventory of 85,000 units and a minimum inventory of 75,000 units should be used, except in abnormal circumstances. b) A stable level of production is definitely preferred, except that during the holiday season in July and August, production may be reduced by 25 percent. Likewise, a variation in production of 7.5 percent above and below the average level is acceptable. 3. What are the main problems faced by the company in production planning? Make your general recommendations.
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(1) July 1, 2008: Receives $25,000 from Quinn Zealick for 25,000 shares of the stock common face value $1 from the bookstore. (2) July 1, 2008: Obtains $30,000 loan from local bank for needs of working capital. The loan earns 6% interest per year. The loan is payable with interest on June 30, 2009. (3) July 1, 2008: Sign a three-year rental agreement at an annual rent of $20,000 Pay the first year's rent in advance. (4) July 1, 2008: Purchases shelves for $4,000 in cash. The shelves have an estimated useful life of five years and zero residual value. (5) July 1, 2008: Purchase computers for $10,000 in cash. The computers They have an estimated useful life of three years and $1,000 in residual value. (6) July 1, 2008: Makes guarantee deposits with various book distributors for a total of $8,000. Deposits are refundable on June 30, 2009 if the bookstore pays on time all amounts payable for books purchased from distributors between July 2008 and June 30, 2009. (7) During 2008: Purchases books on account from various distributors for a cost of $160,000. (8)During 2008: Sells books costing $140,000 to $172,800. Of the total sales, $24,600 corresponds to cash and $148,200 is on account. (9) During 2008: Returns unsold books and books ordered in error for a cost of $14,600. The company had not yet paid for these books. (10) During 2008: Collected $142,400 from sales on account. (11) During 2008: Pays employees salaries of $16,700. (12) During 2008: Pays $139,800 to book distributors of the amounts payable for purchases on account. (13) December 28, 2008: Receives customer advances of $850 due to order books special that the bookstore will order and expects to receive during 2009. (14) December 31, 2008: Record the corresponding amount of interest expense on the loan in (2) for 2008. (15) December 31, 2008: Record the corresponding amount of rental expense for 2008. (16) December 31, 2008: Record the corresponding amount of depreciation expense on the shelves in (4). (17) December 31, 2008: Record the corresponding amount of depreciation expense about computers in (5). (18) December 31, 2008: Record the corresponding amount of income tax expense. profits for 2008. The income tax rate is 40%. The taxes are paid on March 15, 2009. (1) March 15, 2009: Pays 2008 income tax. (2) June 30, 2009: Pay off the bank loan with interest. (3) July 1, 2009: Obtains a new bank loan for $75,000. He loan is payable on June 30, 2010, with 8% interest payable to the expiration. (4) July 1, 2009: Receives security deposits from book distributors. (5) July 1, 2009: Pay the rent corresponding to the period from July 1 2009 to June 30, 2010. (6) During 2009: Purchase books on account for a cost of $310,000. (7)During 2009: Sold books for a cost of $286,400 for $353,700. Of the total sales, $24,900 corresponds to cash, $850 corresponds to special orders received during December of 2008 and $327,950 are on account. (8) During 2009: Returns unsold books at a cost of $22,700. The company has not yet I had paid for these books. (9) During 2009: Collects $320,600 from sales to accounts. (10) During 2009: Pays employees compensation of $29,400. (11) During 2009: pays $281,100 to book distributors for book purchases from account. (12) December 31, 2009: Declares and pays a dividend of $4,000.
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