P9-19 Shilow Company The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $8,000 Accounts receivable $20,000 Inventory $36,000 Buildings and equipment, net $120,000 Accounts payable $21,750 Capital stock $150,000 Retained earnings $12,250 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) $50,000 April $60,000 May $72,000 June $90,000 July $48,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. e. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets.) g. Equipment costing $1,500 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Requirement 1: 1. Complete the following schedule using the above data. Requirement 2: Complete the following using the above data Requirement 3: Complete the following using the above data. Requirement 4: Complete the following cash budget using the above data. Requirement 5: Prepare an absorption costing income statement, for the quarter ended June 30. Requirement 6: Prepare a balance sheet as of June 30. Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas Cooker Charcoal Smoker Units 1000 7000 Number of batches 40 10 Number of batch moves 80 20 Direct materials 50000 100000 Direct labor 20000 28000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection 360000 Amount of direct materials cost Materials movement 16600 Number of batch moves Scheduling 30000 Number of batches 406600 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 8.4708 for overhead rate calculations. b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.