Rerun Manufacturing Company Is in the Process of Preparing Its

question 75

Multiple Choice

Rerun Manufacturing Company is in the process of preparing its 2016 budget and is anticipating the following changes: 30% increase in the number of units sold.20% increase in the direct material unit cost.15% increase in the direct labor cost per unit.10% increase in the manufacturing overhead cost per unit.14% increase in the marketing price.7% increase in the administrative expenses.Rerun does not keep any units in inventory.The composition of the cost of finished products during 2016 for materials,direct labor,and factory overhead,respectively,was in the ratio of 3:2:1.The condensed income statement for 2016 is as follows: $$\begin{array} { | l | r | r | } \hline \text { Sales } ( 30,000 \text { units } ) & \$ 460,000 & \\\hline \text { Less sales returns } & \underline{13,500 }& \\\hline \text { Net sales } & 436,500 & \\\hline \text { Cost of Goods Sold } &\underline{ 306,000} & \\\hline \text { Gross Profit } & & \$ 130,500 \\\hline \text { Selling Expenses } & \$ 60,000 & \\\hline \text { Admin. Expenses } & 30,000 & 90,000 \\\hline \text { Net Income } & & \underline{\$ 40,500 }\\\hline\end{array}$$
What are estimated net sales for 2016,assuming the sales return/gross sales relationship remains constant?

• A) $646,893.
• B) $585,000.
• C) $571,500.
• D) $567,450.

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Definitions:

Corporate Criminal Doctrine

A legal theory that attributes criminal liability to corporations and their executives for acts that are illegal under the law, acknowledging that entities can be responsible for criminal behavior.

Deadly Force

Force that is likely to cause death or serious bodily harm, often discussed in the context of law enforcement or self-defense.

Provide a Defense

To offer arguments or evidence in support of oneself in legal proceedings or when accused of something.

Criminal Intent

The mental state or intention to commit a crime, which is a necessary element to establish guilt in many criminal offenses.