Planet Corporation Sold 21,000 Units of Its Product at a Price

question 64

Short Answer

Planet Corporation sold 21,000 units of its product at a price of $250 per unit.Total variable cost per unit is $187,consisting of $104 in variable production cost and $83 in variable selling and administrative cost.Compute the manufacturing margin for the company under variable costing.

Understand the preparation and components of a cash budget.

Identify factors excluding cash payments in budgeting such as depreciation expense.

Understand the purpose and components of capital expenditure budgets.

Understand the components and importance of a cash budget.

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Definitions:

Current Liabilities

Obligations or debts that a company is expected to pay off within one year or within its normal operating cycle.

Quick Ratio

A measure of a company’s ability to meet its short-term obligations using its most liquid assets, excluding inventory.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business’ normal operating cycle, whichever is longer.

Current Liabilities

Obligations that are due for payment within the next operating cycle or year, including accounts payable and short-term loans.