ACCT 505 Managerial Accounting Entire Course

4. TCO F) Walker Corporation is preparing its cash budget for November. The budgeted beginning cash
balance is $43,000. Budgeted cash receipts total $117,000 and budgeted cash disbursements total $122,000. The
desired ending cash balance is $55,000. The company can borrow up to $100,000 at any time from a local bank, with
interest not due until the following month.
Required:
Prepare the company’s cash budget for November in good form. Make sure to indicate what borrowing, if any, would
be needed to attain the desired ending cash balance (Points : 25)
6. (TCO H) Lindon Company uses 7,500 units of Part Y each year as a component in the assembly of one of
its products. The company is presently producing Part Y internally at a total cost of $119,000 as follows.
Direct materials
$26,000
Direct labor
28,000
Variable manufacturing overhead
20,000
Fixed manufacturing overhead
45,000
Total costs
$119,000
An outside supplier has offered to provide Part Y at a price of $12 per unit. If Lindon stops producing the part
internally, one third of the fixed manufacturing overhead would be eliminated.
Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside
supplier’s offer. Please state clearly whether the part should be made or bought and share your work.
(Points : 30)
7. TCO B) Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the
upcoming year. Data for the upcoming year appear below.
Estimated machine hours 75,000