### p22 1a stan loy owns the vista barber shop he employs 5 barbers andpays each a base 3478905

P22-1A
Stan Loy owns the Vista Barber Shop.  He employs 5 barbers andpays each a base rate of \$1000 per month.  One of the barbersserves as a manager and receives an extra \$500 per month.  Inaddition to the base rate, each barber also receives a commissionof \$5.50 per haircut.

Other costs: Advertising \$200 per month, Rent 900 per month, Barbersupplies .30 per haircut, Utilities 175 per month plus .20 perhaircut, Magazines 25 per month.

Stan currently charges \$10 per haircut.

a) Determine the variable cost per haircut and the total monthlyfixes costs
b)Compute the break even point in units and dollars
c) Prepara a CVP graph assuming a maximum of \$1,800 haircuts in amonth.  Use increments of 300 haircuts on the horizontal axisand \$3,000 on the vertical axis.
d) Determine net income, assuming 1,900 haircuts are given in amonth.

P23-3A
Remington INdustries had sales in 2012 of \$6,400,000 and grossprofit of \$1,100,000.  Management is considering twoalternative budget plans to increase its gross profit in 2013.

Plan A would increase the selling price per unit from \$8.00 to\$8.40.  Sales volume would decrease by 5% from its 2012level.  Plan B would decrease the selling price per unit by.50.  The marketing dept expects that the sales volume wouldincrease by 150,000 units.

At the end of 2012, Remington has 40,000 units of inventory onhand.  Plan A is accepted, the 2013 ending inventory should beequal to 5% of the 2013 sales.  If Plan B is accepted, theending inventory should be equal to 50,000 units.  Each unitproduced will cost 1.80 in direct labor, 2.00 in direct materials,and 1.20 in variable overhead.  The fixed overhead for 2013should be \$1,895,000.

a) Prepare a sales budget for 2013 under each plan
b) Prepare production budget for 2013 under ea plan
c) Compute the production cost per unit under ea plan.  Why isthe cost per unit different for ea of the two plans?  Round totwo decimals
d) Which plan should be accepted?  (compute the gross profitunder each plan)

P24-5A
Namath Manufacturing Co manufactures a variety tools and industrialequipment.  The company operates through 3 divisions.  Eadivisions is an investment center.  Operating data for theHome Division for the year ended Dec 31, 2012, and relevant budgetdata are as follows:

Sales \$1,500,00 (actual) \$100,000 favorable (comparison with budgetCWB)
Variable cost of goods sold \$700,000 (actual)60,000 unfavorable(CWB)
Variable selling & admin expenses 125,000(actual) 25,000unfavorable (CWB)
COntrollable fixed cost of goods sold 170,000 (actual) ON TARGET -CWB
Controllable fixed selling & admin expenses 80,000 (actual) ONTARGET (CWB)

Average operating assets for the year for the Home Division were\$2,500,000 which was also the budgeted amount.

a) Prepare a responsibility report in thousands of dollars for theHOme Division.
b) Evaluate manager’s performance.  Which items will likely beinvestigated by top management?
c) Compute the expected ROI in 2013 for the Home Division, assumingthe following independent changes to actual data.
1) Variable cost of goods sold is decreased by 6%
2) Average operating assts are decreased by 10%
3) Sales are increased by \$200,000 and this increase is expected toincrease contribution margin by \$90,000.

QUESTION TITLE :- Stan Loy owns the Vista Barber Shop.