Based on the information in Table 2, what was Fielding's projected loss for March?
Fielding Wilderness Outfitters had projected its sales for the first six months of 20 14 to be as follows:
Jan. $50,000 April $180,000
Feb. $60,000 May $240,000
March $100,000 June $240,000
Cost of goods sold is 60% of sales. Purchases are made and paid for two months prior to the sale. 40% of sales are collected in the month of the sale, 40% are collected in the month following the sale, and the remaining 20% in the second month following the sale. Total other cash expenses are $40,000/month. The company's cash balance as of March 1, 2014 is projected to be $40,000, and the company wants to maintain a minimum cash balance of $15,000. Excess cash will be used to retire short-term borrowing (if any exists). Fielding has no short-term borrowing as of March 1, 2014. Assume that the interest rate on short-term borrowing is 1% per month.
A) $184,000
B) $110,000
C) $84,000
D) None of the above
Answer: B
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Fields Cutlery, a manufacturer of gourmet knife sets, produced 20,000 sets and sold 23,000 units during the current year. Beginning inventory under absorption costing consisted of 3,000 units valued at $66,000 (Direct materials $12 per unit; Direct labor, $3 per unit; Variable Overhead, $2 per unit, and Fixed overhead, $5 per unit.) All manufacturing costs have remained constant over the 2-year period. At year-end, the company reported the following income statement using absorption costing:Sales (23,000 × $45)$1,035,000 Cost of goods sold (23,000 × $22) 506,000 Gross margin$529,000 Selling and administrative expenses 115,000 Net income$414,000 60% of total selling and administrative expenses are variable. Compute net income under variable costing.
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Answer the following statement true (T) or false (F)