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Question 1: ABC Company has been operating for 2 years producing irons. In the month of June, they have sold a total of 350,450 irons. For the month of July, their target sales is to sell 500.000 irons by the end of the month where 65% of their months production will be carried over to the next month. There are 355,000 finished irons in inventory. Based on an anticipated 10% monthly growth rate by the company, prepare the production requirement in units of finished product for the next four months. (10 Marks) Question 2: Company XYZ, who specializes in producing T-shits, knows well that a business must earn enough to pay for all costs and still keep itself in an adequate state of liquidity. They also know that profit is an essential cost of any business activity. It must be planned and managed just like other costs of doing business. Based on the profit plan, the company expects to make $300,00 in February in T-shit sales, $340,000 in March and $365,000 in April in sales. Based on the expectation cash collection of the treasury manager, the company expected to receive at least 50% of the amount in the month of sale, 20% in the month following sale, and 30% in the second month following sale. Based on your evaluation, determine whether the collection targets are correct. Based on your evaluation, present your recommendations to the company. (10 Marks) Question 3: The ABC Company acknowledges that by determining the standards against actually results is a way to determine potential problems. By using a standard cost system, company ABC purchases and uses 20,000 pounds of direct materials for their production in July. The actual cost of the raw material came to a total of $66,000. The materials quantity variance was $1,400 and the standard quantity of materials allowed for July production was 19,300 pounds. Determine the materials price variance for July, College of Administrative and Financial Sciences 1ST , Tri, SY 2021-22 Furthermore, determine what the company may do in the next month to avoid using more than the allowed material weight in the next month. Furthermore, explain why some companies only require that unfavorable variance be explained while many companies require both favorable and unfavorable variance be explained. (Marking Scheme: 4 marks of computation: 6 marks for analysis = 10 marks)

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