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Management is considering discontinuing the Video Recorder product line . Accountants for the company estimate that discontinuing the Video Recorder line will decrease fixed cost of goods sold by $ 10,000 and fixed marketing and administrative expenses by $ 4,000 . repare an analysis supporting your opinion about whether or not the Video Recorder product line should be discontinued .

================================================== ACCT 346 Week 6 Homework Assignment

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1 . Cave Hardware ' s forecasted sales for April , May , June , and July are $ 200,000 , $ 230,000 , $ 190,000 , and $ 240,000 , respectively . Sales are 65 % cash and 35 % credit , with all accounts receivable collected in the month following the sale . Cost of goods sold is 75 % of sales and ending inventory is maintained at $ 60,000 plus 10 % of the following month ' s cost of goods sold . All inventory purchases are paid 22 % in the month of purchase and 78 % in the following month . What are the total cash collections budgeted for June ?

2 . Madden Corporation manufactures T-shirts ( its only product ). The company ’ s standards for manufacturing T-shirts are as follows : 2a . What is the direct labor rate variance for the month ? Is it favorable or unfavorable ? 2b . What is the direct labor efficiency variance for the month ? Is it favorable or unfavorable ? ================================================== ACCT 346 Week 6 Quiz ( 2 Sets )

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