X-Ray Manufacturing has the following revenues and costs:($)12/31/2015Sales4,373,000

Problem 1 (20 points)
	X-Ray Manufacturing has the following revenues and costs:
	($)	12/31/2015
	Sales	4,373,000
	Fixed overhead	1,024,000
	Direct labor	460,000
	Direct materials	615,000
	Selling expenses	365,000
	Administrative expenses	485,000
	Variable overhead	225,000
	Interest expense	130,000
	Income tax	375,000

	Direction: Prepare a contribution margin income statement with both dollars and percentages of sales displayed.
	(Hint: In a Contribution Margin Income Statement, you must display these subtotal/totals separately:
	variable costs, fixed costs, contribution margin, gross margin, operating income, net income.)

	Answer Sheet:
	X-Ray Manufacturing
	Contribution Margin Income Statement

		($)	($)	(%)

Problem 2 (20 points)
	Presented below are selected budget data items for Globe Corporation for a three-month period:

	(S)	August	September	October	November	December
	Sales	771,000	845,500	962,500	874,500	851,500
	Direct materials	116,000	118,000	123,500	119,500	125,000
	Direct labor			90,000	85,000	96,000
	Variable overhead			65,600	62,400	68,000
	Fixed overhead			141,000	145,000	140,000
	Selling and admin. costs			312,000	310,000	315,000
	Fixed loan payments			140,000	140,000	145,000

a)	All sales are on account.
	AR is historically collected in:	● In the month of the sale:	18%	● The following month:	65%	● Two months after the sale:	17%
b)	Materials are paid for:	● In the month of use:	44%	● The following month:	56%
	All other expenses are paid in the month incurred.
c)	The cash balance at the beginning of October:		$32,500
	and management wants to determine if the company will have enough cash to pay a year-end bonus.

	Direction: Prepare a three-month cash budget, including a separate schedule for cash collections versus material payments.
	(Hint: Your cash budget must cover all items listed in the problem, not just sales and material purchases.)

	Answer Sheet:
	Globe Corporation
	Cash Budget

		October	November	December
	Cash Collections:








	Materials Payments:







	Cash Budget: