Ch.9 276k6g

Question 1: Score 0/4

Your response

Correct response

Exercise 9-1 Schedule of Expected Cash Collections [LO2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

Exercise 9-1 Schedule of Expected Cash Collections [LO2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

Budgeted sales (all on )

April $ 300,000

May $ 500,000

June $ 200,000

Total $ 1,000,000

Budgeted sales (all on )

April $ 300,000

May $ 500,000

June $ 200,000

Total $ 1,000,000

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

Requirement 1: Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Requirement 1: Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

April $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%)

February sales March sales April sales May sales June sales Total cash collections

May $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%)

June $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%)

Total $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%)

February sales March sales April sales May sales June sales Total cash collections

April 23,000 182,000 60,000 0 0 $ 265,000 $

May 0 26,000 210,000 100,000 0 $ 336,000 $

June 0 0 30,000 350,000 40,000 $ 420,000 $

Total 23,000 208,000 300,000 450,000 40,000 $ 1,021,000 $

Total grade: 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : April

May

June

Total

February sales: $230,000 × 10% March Sales: $260,000 × 70%, 10% April sales: $300,000 × 20%, 70%, 10% May sales: $500,000 × 20%, 70% June sales: $200,000 × 20%

$ 23,000

$

23,000

182,000

$ 26,000

208,000

60,000

210,000

$ 30,000

300,000

100,000

350,000

450,000

40,000

40,000

Total cash collections

$ 265,000

$ 336,000

$ 420,000

$ 1,021,000

Observe that even though sales peak in May, cash collections peak in June. This occurs because the bulk of the company's customers pay in the month following sale. The lag in collections that this creates is even more pronounced in some companies. Indeed, it is not unusual for a company to have the least cash available in the months when sales are greatest.

Your response

Correct response

Requirement 2: Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the s receivable as of that date. (Omit the "$" sign in your response.)

Requirement 2: Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the s receivable as of that date. (Omit the "$" sign in your response.)

$ 1 (0%)

s receivable

$ 210,000

s receivable

Total grade: 0.0×1/1 = 0% : s receivable at June 30: From May sales: $500,000 × 10% From June sales: $200,000 × (70% + 10%) Total s receivable at June 30

$ 50,000 160,000 $ 210,000

Question 2: Score 0/4 Your response Exercise 9-2 Production Budget [LO3] Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

April May June July

Sales in Units 50,000 75,000 90,000 80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units. Required: Show the number of units to be produced each month and for the quarter in total. Required Production

Correct response Exercise 9-2 Production Budget [LO3] Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

April May June July

Sales in Units 50,000 75,000 90,000 80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units. Required: Show the number of units to be produced each month and for the quarter in total.

April May June Quarter

1 1 1 1

(0%) (0%) (0%) (0%)

April May June Quarter

Required Production 52,500 76,500 89,000 218,000

Total grade: 0.0×1/4 + 0.0×1/4 + 0.0×1/4 + 0.0×1/4 = 0% + 0% + 0% + 0% : Budgeted sales in units Add desired ending inventory* Total needs Less beginning inventory Required production

April 50,000 7,500 57,500 5,000 52,500

May 75,000 9,000 84,000 7,500 76,500

June 90,000 8,000 98,000 9,000 89,000

Quarter 215,000 8,000 223,000 5,000 218,000

*10% of the following month's sales in units.

Question 3: Score 0/4 Your response

Correct response

Exercise 9-3 Direct Materials Budget [LO4] Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Budgeted production, in bottles

First 60,000

Year 2 Second Third 90,000 150,000

Fourth 100,000

Exercise 9-3 Direct Materials Budget [LO4] Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Year 3 First 70,000 Budgeted production, in bottles

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)

Production needs—grams Less (0%) : desired ending inventory—grams Total needs—grams Add (0%) : beginning inventory—grams

First 1 1 1 1

(0%) (0%) (0%) (0%)

Second 1 (0%) 1 (0%) 1 (0%) 1 (0%)

Year 2 Third 1 1 1 1

First 60,000

Year 2 Second Third 90,000 150,000

Fourth 100,000

Year 3 First 70,000

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.) (0%) (0%) (0%) (0%)Production needs—grams

First 180,000

Second 270,000

Year 2 Third 450,000

1 (0%) 1 (0%)

Raw materials to be purchased—grams Cost of raw materials to be purchased

1 (0%) 1 (0%)

1 (0%)Add : desired ending 1 (0%)inventory—grams 1 (0%) 1 (0%)Total needs—grams 1 (0%) 1 (0%) Less : beginning inventory—grams Raw materials to be purchased—grams

54,000 234,000 36,000 198,000

90,000 360,000 54,000 306,000

60,000 510,000 90,000 420,000

42,000 342,000 60,000 282,000

Cost of raw materials to be purchased

29,700

45,900

63,000

42,300

Total grade: 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Year 2 Second

First Required production in bottles Number of grams per bottle Total production needs—grams

Third

60,000

90,000

150,000

× 3

× 3

× 3

180,000

270,000

450,000

Year 3 First 70,00

Fourth 100,000

0

× 3 300,000

× 3 210,00 0


Your response

Correct response

Exercise 9-4 Direct Labor Budget [LO5] The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the fiscal year:

Exercise 9-4 Direct Labor Budget [LO5] The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the fiscal year:

Units to be produced

1st Quarter 8,000

2nd Quarter 6,500

3rd Quarter 7,000

4th Quarter 7,500


1st Quarter 8,000

2nd Quarter 6,500

3rd Quarter 7,000

4th Quarter 7,500

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.

Requirement 1: Compute the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

Requirement 1: Compute the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

1st Quarter 2nd Quarter 3rd Quarter

Total direct labor cost $ 1 (0%) $ 1 (0%) $ 1 (0%)

1st Quarter 2nd Quarter

Total direct labor cost $ 33,600 $ 27,300

4th Quarter Year

$ 1 (0%) $ 1 (0%)

3rd Quarter 4th Quarter Year

$ 29,400 $ 31,500 $ 121,800

Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% : Assuming that the direct labor workforce is adjusted each quarter, the direct labor budget is: 1st Quarter 8,000 × 0.35 2,800 × $12.00 $ 33,600

Units to be produced Direct labor time per unit (hours) Total direct labor hours needed Direct labor cost per hour Total direct labor cost

2nd Quarter 6,500 × 0.35 2,275 × $12.00 $ 27,300

3rd Quarter 7,000 × 0.35 2,450 × $12.00 $ 29,400

4th Quarter 7,500 × 0.35 2,625 × $12.00 $ 31,500

Year 29,000 × 0.35 10,150 × $12.00 $ 121,800

Your response

Correct response

Requirement 2: Compute the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Total direct labor cost $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)


Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% : Assuming that the direct labor workforce is not adjusted each quarter and that overtime wages are paid, the direct labor budget is:

Units to be produced Direct labor time per unit (hours) Total direct labor hours needed

Requirement 2: Compute the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)

1st Quarter 8,000 × 0.35 2,800

2nd Quarter 6,500 × 0.35 2,275

3rd Quarter 7,000 × 0.35 2,450

4th Quarter 7,500 × 0.35 2,625

Year

Total direct labor cost $ 34,800 $ 31,200 $ 31,200 $ 31,650 $ 128,850

Regular hours paid Overtime hours paid Wages for regular hours (@ $12.00 per hour) Overtime wages (@ 1.5 hours × $12.00 per hour) Total direct labor cost

2,600 200 $ 31,200 3,600 $ 34,800

2,600 0 $ 31,200 0 $ 31,200

2,600 0 $ 31,200 0 $ 31,200

2,600 25 $ 31,200 450 $ 31,650

$ 124,800 4,050 $ 128,850


Your response

Correct response

Exercise 9-5 Manufacturing Overhead Budget [LO6] The direct labor budget of Yuvwell Corporation for the fiscal year contains the following details concerning budgeted direct labor-hours:

Exercise 9-5 Manufacturing Overhead Budget [LO6] The direct labor budget of Yuvwell Corporation for the fiscal year contains the following details concerning budgeted direct labor-hours:

Budgeted direct labor-hours

1st Quarter 8,000

2nd Quarter 8,200

3rd Quarter 8,500

4th Quarter 7,800

Budgeted direct labor-hours

1st Quarter 8,000

2nd Quarter 8,200

3rd Quarter 8,500

4th Quarter 7,800

The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

Requirement 1: Compute the company's manufacturing overhead budget for the fiscal year. (Omit the "$" sign in your response.)

Requirement 1: Compute the company's manufacturing overhead budget for the fiscal year. (Omit the "$" sign in your response.)


Cash disbursements for manufacturing overhead $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)


Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% :

Budgeted direct labor-hours Variable overhead rate Variable manufacturing overhead

Yuvwell Corporation Manufacturing Overhead Budget 1st 2nd Quarter Quarter 8,000 8,200 $ × 3.25 $ × 3.25 $ 26,000 $ 26,650

3rd Quarter 8,500 $ × 3.25 $ 27,625

4th Quarter 7,800 $ × 3.25 $ 25,350

Year 32,500 $ × 3.25 $ 105,625

Cash disbursements for manufacturing overhead $ 58,000 $ 58,650 $ 59,625 $ 57,350 $ 233,625

Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbursements for manufacturing overhead

48,000 74,000 16,000 $ 58,000

48,000 74,650 16,000 $ 58,650

48,000 75,625 16,000 $ 59,625

48,000 73,350 16,000 $ 57,350

192,000 297,625 64,000 $ 233,625

Your response

Correct response

Requirement 2: Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Requirement 2: Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Manufacturing overhead rate for the year

$ 1 (0%)

Manufacturing overhead rate for the year

$

9.16

Total grade: 0.0×1/1 = 0% : Total budgeted manufacturing overhead for the year (a) Total budgeted direct labor-hours for the year (b) Manufacturing overhead rate for the year (a) ÷ (b)

$ 297,625 32,500 $ 9.16


Your response

Correct response

Exercise 9-6 Selling and istrative Expense Budget [LO7] The budgeted unit sales of Weller Company for the fiscal year are provided below: Budgeted unit sales

1st Quarter 15,000

2nd Quarter 16,000

3rd Quarter 14,000

4th Quarter 13,000

The company's variable selling and istrative expense per unit is $2.50. Fixed selling and istrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter.

Exercise 9-6 Selling and istrative Expense Budget [LO7] The budgeted unit sales of Weller Company for the fiscal year are provided below: Budgeted unit sales

1st Quarter 15,000

2nd Quarter 16,000

3rd Quarter 14,000

4th Quarter 13,000

The company's variable selling and istrative expense per unit is $2.50. Fixed selling and istrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter.

Required: Required: Prepare the company's selling and istrative expense budget for the fiscal year. (Input all amounts as positive Prepare the company's selling and istrative expense budget for the fiscal year. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Weller Company Selling and istrative Expense Budget

Weller Company Selling and istrative Expense Budget

1st

Variable expense Fixed selling and istrative expenses: Advertising Executive salaries Insurance Property taxes Depreciation Total fixed selling and istrative expenses Total selling and istrative expenses Less depreciation Cash disbursements for selling and istrative expenses

2nd

Quarter 1 (0%)

$

1 1 1 1 1

Quarter 1 (0%)

(0%) (0%) (0%) (0%) (0%)

1 1 1 1 1

$

(0%) (0%) (0%) (0%) (0%)

4th

Quarter 1 (0%) 1 1 1 1 1

1 (0%)

1 (0%)

1 (0%) 1 (0%)

1 (0%) 1 (0%)

1 (0%) 1 (0%)

$

1 (0%)

$

$

(0%) (0%) (0%) (0%) (0%)

1 (0%)

1 (0%)

$

$

3rd

1 (0%)

$

1st

Year Quarter 1 (0%) Variable$expense 1 (0%) Fixed selling and istrative expenses: 1 (0%)Advertising 1 (0%) 1 (0%)Executive salaries 1 (0%) 1 (0%)Insurance 1 (0%) 1 (0%)Property taxes1 (0%) 1 (0%)Depreciation 1 (0%) Total fixed selling and istrative 1 (0%) 1 (0%) expenses 1 (0%) 1 (0%) Total selling and istrative expenses 1 (0%) Less depreciation 1 (0%) Cash disbursements for selling and 1 (0%) 1 (0%) $ istrative expenses

$

$

2nd

Quarter 37,500

$

3rd

Quarter 40,000

$

4th

Quarter 35,000

$

Quarter 32,500

$

8,000 35,000 5,000 0 20,000

8,000 35,000 0 8,000 20,000

8,000 35,000 5,000 0 20,000

8,000 35,000 0 0 20,000

3 14 1

68,000

71,000

68,000

63,000

27

105,500 20,000

111,000 20,000

103,000 20,000

95,500 20,000

41 8

85,500

$

91,000

$

83,000

$

75,500

8

$

Total grade: 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%

:

Budgeted unit sales Variable selling and istrative expense per unit Variable expense

1st Quarter 15,000

2nd Quarter 16,000

3rd Quarter 14,000

4th Quarter 13,000

Year 58,000

$ × 2.50

$

× 2.50

$ × 2.50

$ × 2.50

$

$ 37,500

$ 40,000

$ 35,000

$ 32,500

$ 145,000

× 2.50


Correct response

Exercise 9-7 Cash Budget [LO8] Garden Depot is a retailer that is preparing its budget for the fiscal year. Management has prepared the following summary of its budgeted cash flows:

Exercise 9-7 Cash Budget [LO8] Garden Depot is a retailer that is preparing its budget for the fiscal year. Management has prepared the following summary of its budgeted cash flows:

Total cash receipts Total cash disbursements

1st Quarter $ 180,000 $ 260,000

2nd Quarter $ 330,000 $ 230,000

3rd Quarter $ 210,000 $ 220,000

4th Quarter $ 230,000 $ 240,000

The company's beginning cash balance for the fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may

Total cash receipts Total cash disbursements

1st Quarter $ 180,000 $ 260,000

Year 14

2nd Quarter $ 330,000 $ 230,000

3rd Quarter $ 210,000 $ 220,000

4th Quarter $ 230,000 $ 240,000

The company's beginning cash balance for the fiscal year will be $20,000. The company requires a minimum cash

33

borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the fiscal year. (Show deficiencies, repayments, interest, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Cash balance, beginning Total cash receipts Total cash available Less total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings (at beginnings of quarters) Repayments (at ends of quarters) Interest Total financing Cash balance, ending

Garden Depot Cash Budget 1st Quarter $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

1 1 1 1 1

(0%) (0%) (0%) (0%) (0%)

2nd Quarter $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

1 1 1 1 1

(0%) (0%) (0%) (0%) (0%)

3rd Quarter $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

1 1 1 1 1

(0%) (0%) (0%) (0%) (0%)

balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the fiscal year. (Show deficiencies, repayments, interest, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) 4th Quarter $ Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Cash balance, beginning $ 20,000 $ 10,000 $ 35,800 $ 25,800 180,000 330,000 210,000 230,000 Total cash receipts 200,000 340,000 245,800 255,800 Total cash available 260,000 230,000 220,000 240,000 Less total cash disbursements -60,000 110,000 25,800 15,800 Excess (deficiency) of cash available over disbursements Financing: $ 70,000 0 0 0 Borrowings (at beginnings of quarters) 0 -70,000 0 0 Repayments (at ends of quarters) 0 -4,200 0 0 Interest 70,000 -74,200 0 0 Total financing Cash balance, ending $ 10,000 $ 35,800 $ 25,800 $ 15,800

Total grade: 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Borrowings (at beginnings of quarters): Since the deficiency of cash available over disbursements is $60,000, the company must borrow $70,000 to maintain the desired ending cash balance of $10,000. Interest: $70,000 × 3% × 2 = $4,200.

Question 8: Score 0.28/4 Your response Exercise 9-8 Budgeted Income Statement [LO9] Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:

Correct response Exercise 9-8 Budgeted Income Statement [LO9] Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:

Budgeted unit sales Selling price per unit Cost per unit Variable selling and istrative expenses (per unit) Fixed selling and istrative expenses (per year) Interest expense for the year

460 $ 1,950 $ 1,575 $ 75 $ 105,000 $ 14,000

Required: Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts as positive values. Omit the "$" sign in your response.) Gig Harbor Boating Budgeted Income Statement Interest expense (0%) Selling and istrative expenses (0%) Gross profit (7%) Notes payable (0%) Net operating loss (0%) Notes payable (0%) Net loss (0%)

$

$

1 1 1 1 1 1 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%)

Budgeted unit sales Selling price per unit Cost per unit Variable selling and istrative expenses (per unit) Fixed selling and istrative expenses (per year) Interest expense for the year

460 $ 1,950 $ 1,575 $ 75 $ 105,000 $ 14,000

Required: Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts as positive values. Omit the "$" sign in your response.) Gig Harbor Boating Budgeted Income Statement Sales Cost of goods sold Gross profit Selling and istrative expenses Net operating income Interest expense Net income

$

$

897,000 724,500 172,500 139,500 33,000 14,000 19,000

Total grade: 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 1.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 = 0% + 0% + 0% + 0% + 7% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Sales (460 units × $1,950 per unit) = $897,000 Cost of goods sold (460 units × $1,575 per unit) = $724,500 Selling and istrative expenses (460 units × $75 per unit) + $105,000 = $139,500.

Question 9: Score 0.38/4 Your response Exercise 9-9 Budgeted Balance Sheet [LO10] The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:

Cash s receivable Supplies inventory Equipment Accumulated depreciation s payable

Ending Balances ? $ 8,100 $ 3,200 $ 34,000 $ 16,000 $ 1,800

Correct response Exercise 9-9 Budgeted Balance Sheet [LO10] The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:

Cash s receivable Supplies inventory Equipment Accumulated depreciation

Ending Balances ? $ 8,100 $ 3,200 $ 34,000 $ 16,000

Common stock Retained earnings

$ 5,000 ?

s payable Common stock Retained earnings

The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to be $4,800. Required: Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)

Assets Current assets: Cash (5%) Common stock (0%) Retained earnings (0%) Total current assets Plant and equipment: Building (0%) Retained earnings (0%) Plant and equipment, net Total assets

$

1 (0%) 1 (0%) 1 (0%) $

Mecca Copy Budgeted Balance Sheet Liabilities and Stockholders' Equity Current liabilities: s payable (5%) Stockholders' equity: Supplies inventory (0%) 1 (0%) Equipment (0%) Total stockholders' equity

1 (0%) 1 (0%) $

1 (0%) 1 (0%)

Total liabilities and stockholders' equity

$ 1,800 $ 5,000 ?

The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to be $4,800. Required: Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)

Assets Current assets: Cash s receivable Supplies inventory Total current assets Plant and equipment: Equipment Accumulated depreciation Plant and equipment, net Total assets

$

12,200 8,100 3,200 $

Mecca Copy Budgeted Balance Sheet Liabilities and Stockholders' Equity Current liabilities: s payable Stockholders' equity: Common stock 23,500 Retained earnings Total stockholders' equity

34,000 -16,000 $

18,000 41,500

Total liabilities and stockholders' equity

Total grade: 1.0×1/21 + 0.0×1/21 + 1.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 = 5% + 0% + 5% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Cash: Plug figure.

Retained earnings, beginning balance Add net income Deduct dividends Retained earnings, ending balance

$ 28,000 11,500 39,500 4,800 $ 34,700


Correct response

Exercise 9-10 Cash Budget Analysis [LO8] A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars. Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) 1 Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchases of inventory Operating expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments (including interest)* Total financing Cash balance, ending

$

6 1 (0%) 71 35 1 (0%) 8 2 1 (0%) -2

1 1 1 $ 1

(0%) (0%) (0%) (0%)

Exercise 9-10 Cash Budget Analysis [LO8] A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars. Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Quarter

Quarter 2 3 4 Year Cash balance, beginning 1 (0%) from (0%) $ 1 (0%) $ 1 (0%) Add $ collections $ 1 customers 1 (0%) 1 (0%) 96 323 Total cash available 1 (0%) 1 (0%) 1 (0%) 1 (0%) Less disbursements: Purchases 1 (0%) of inventory35 1 (0%) 45 1 (0%) 30 Operating 30 expenses 113 1 (0%) 8 10 purchases 36 Equipment 1 (0%) 2 2 Dividends2 1 (0%) 1 (0%) 1 (0%) 85 Total disbursements 1 (0%) 1 (0%) 1 (0%) 11 Excess (deficiency) of cash available over disbursements 1 (0%) 1 (0%) 1 (0%) 15 Financing: Borrowings 1 (0%) 1 (0%) 1 (0%) -17 1 (0%) 1 (0%) (including 1 (0%)interest)* 1 (0%) Repayments 1 (0%) Total (0%) $ 1 (0%) $ 1 (0%) $ 1financing

1 $

Cash balance, ending

*Interest will total $1,000 for the year.

$

2 6 65 71

$

3 5 70 75

$

35 28 8 2 73 -2

45 30 8 2 85 -10

48 30 10 2 90 11

7 0 7 5

15 0 15 5

0 -6 -6 5

$

*Interest will total $1,000 for the year.

Total grade: 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%


Your response

Correct response

Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4] The marketing department of Gaeber Industries has submitted the following sales forecast for the fiscal year: Budgeted unit sales

1st Quarter 8,000

2nd Quarter 7,000

3rd Quarter 6,000

4th Quarter 7,000

The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished

Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4] The marketing department of Gaeber Industries has submitted the following sales forecast for the fiscal year: Budgeted unit sales

1st Quarter 8,000

2nd Quarter 7,000

3rd Quarter 6,000

5 96 101

4th Quarter 7,000

The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished

$

$

goods inventory for the fourth quarter is 1,700 units. In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 pounds and the beginning s payable for the first quarter is budgeted to be $14,820. Each unit requires 2 pounds of raw material that costs $4.00 per pound. Management desires to end each quarter with an inventory of raw materials equal to 20% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 3,140 pounds. Management plans to pay for 75% of raw material purchases in the quarter acquired and 25% in the following quarter.

goods inventory for the fourth quarter is 1,700 units. In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 pounds and the beginning s payable for the first quarter is budgeted to be $14,820. Each unit requires 2 pounds of raw material that costs $4.00 per pound. Management desires to end each quarter with an inventory of raw materials equal to 20% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 3,140 pounds. Management plans to pay for 75% of raw material purchases in the quarter acquired and 25% in the following quarter.

Requirement 1: Prepare the company's production budget for the fiscal year. (Input all amounts as positive values.)


Gaeber Industries Production Budget 1st Quarter 2nd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

Budgeted unit sales Add desired ending inventory Total units needed Less beginning inventory Required production

3rd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

4th Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)


Gaeber Industries Production Budget 1st Quarter 2nd Quarter 8,000 7,000 1,400 1,200 9,400 8,200 1,600 1,400 7,800 6,800

3rd Quarter 6,000 1,400 7,400 1,200 6,200

4th Quarter 7,000 1,700 8,700 1,400 7,300

Total grade: 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%

Your response

Correct response

Requirement 2: (a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your response.) Gaeber Industries Direct Materials Budget 1st Quarter 2nd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ $

Production needs Add desired ending inventory Total needs Less beginning inventory Raw materials to be purchased Cost of raw materials to be purchased

3rd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $

Requirement 2: (a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your response.)

4th Quarter Year 1 (0%) 1 (0%) Production needs 1 (0%)ending inventory 1 (0%) Add desired (0%) 1 (0%) Total 1needs (0%) inventory 1 (0%) Less 1 beginning 1 (0%) to be purchased 1 (0%) Raw materials 1 raw (0%) 1 purchased (0%) $ Cost of materials $ to be

Gaeber Industries Direct Materials Budget 1st Quarter 2nd Quarter 15,600 13,600 2,720 2,480 18,320 16,080 3,120 2,720 15,200 13,360 60,800 53,440 $ $

3rd Quarter 12,400 2,920 15,320 2,480 12,840 51,360 $

4th Quarter 14,600 3,140 17,740 2,920 14,820 59,280 $

Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% :

Required production Raw materials per unit

1st Quarter 7,800 ×2

2nd Quarter 6,800 ×2

3rd Quarter 6,200 ×2

4th Quarter 7,300 ×2

Year 28,100 ×2

Production needs

15,600

13,600

12,400

14,600

56,200

Your response

Correct response

(b) Prepare the schedule of expected cash disbursements for purchases of materials for the fiscal year. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

s payable, beginning balance 1st Quarter purchases 2nd Quarter purchases 3rd purchases 4th Quarter purchases Total cash disbursements for materials

(b) Prepare the schedule of expected cash disbursements for purchases of materials for the fiscal year. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Gaeber Industries Schedule of Expected Cash Disbursements for Materials st 1 Quarter 2nd Quarter 3rd Quarter 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%) $ 1 (0%) $

th

4 Quarter Year 1 (0%) 1 (0%) s payable, $ beginning balance 1 (0%) 1 (0%) 1st Quarter purchases 1 (0%) 1 (0%) 2nd Quarter purchases 1 (0%) 1 (0%) 3rd purchases 1 (0%) 1 (0%) 4th Quarter purchases (0%) 1for(0%) $ Total 1cash disbursements $ materials $

Gaeber Industries Schedule of Expected Cash Disbursements for Materials st 1 Quarter 2nd Quarter 3rd Quarter 14,820 0 0 $ $ $ 45,600 15,200 0 0 40,080 13,360 0 0 38,520 0 0 0 60,420 55,280 51,880 $ $ $

4th Quarter $

$

Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%


Your response

Correct response

Exercise 9-14 Direct Labor and Manufacturing Overhead Budgets [LO5, LO6] The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the fiscal year:

Exercise 9-14 Direct Labor and Manufacturing Overhead Budgets [LO5, LO6] The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the fiscal year:


1st Quarter 12,000

2nd Quarter 14,000

3rd Quarter 13,000

4th Quarter 11,000


1st Quarter 12,000

2nd Quarter 14,000

3rd Quarter 13,000

4th Quarter 11,000

Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.

Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.

Requirement 1: Prepare the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

Requirement 1: Prepare the company's direct labor budget for the fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

Raredon Corporation Direct Labor Budget 1st quarter 2nd quarter

3rd quarter

4th quarter

Raredon Corporation Direct Labor Budget 1st quarter 2nd quarter

3rd quarter

4th quarter

0 0 0 12,840 44,460 57,300

Total direct labor-hours needed Total direct labor cost

1 (0%) 1 (0%)

$

1 (0%) 1 (0%)

$

1 (0%) 1 (0%)

$

1 (0%) 1 (0%) needed Total direct labor-hours 1 (0%) 1 (0%) Total $ direct labor cost

$

8,400 88,200

$

9,800 102,900

$

9,100 95,550

$

7,700 80,850

$

35,000 367,500

$

Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% :

Units to be produced Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost

Raredon Corporation Direct Labor Budget 1st quarter 12,000 ×0.70 8,400 $ 10.50 $ 88,200

3rd 2nd quarter quarter 14,000 13,000 ×0.70 ×0.70 9,800 9,100 $ 10.50 $ 10.50 $ 102,900 $ 95,550

4th quarter 11,000 ×0.70 7,700 $ 10.50 $ 80,850

Year 50,000 ×0.70 35,000 $ 10.50 $ 367,500

Your response

Correct response

Requirement 2: Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.)

Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Cash disbursements for manufacturing overhead

Raredon Corporation Manufacturing Overhead Budget 1st quarter 2nd quarter 1 (0%) 1 (0%) $ $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) $

1 (0%)

$

1 (0%)

Requirement 2: Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.)

$

3rd quarter 1 (0%) 1 (0%) 1 (0%)

$

1 (0%)

4th quarter Year 1 Variable (0%) manufacturing 1 (0%)overhead $ 1 Fixed (0%) manufacturing 1 (0%) overhead 1 Total (0%) manufacturing 1 (0%) overhead Cash disbursements for 1 (0%) 1overhead (0%) $ manufacturing $ $

Raredon Corporation Manufacturing Overhead Budget 1st quarter 2nd quarter 12,600 14,700 $ $ 80,000 80,000 92,600 94,700 $

70,600

$

72,700

$

$

3rd quarter 13,650 80,000 93,650 71,650

$

$

4th quarter 11,550 80,000 91,550 69,550

Total grade: 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% :

Budgeted direct labor-hours Variable overhead rate Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbursements for

Raredon Corporation Manufacturing Overhead Budget 1st 2nd quarter quarter 8,400 9,800 $ ×1.50 $ ×1.50 $ 12,600 $ 14,700 80,600 80,000 92,600 94,700 22,000 22,000 $ 70,600 $ 72,700

3rd quarter 9,100 $ ×1.50 $ 13,650 80,000 93,650 22,000 $ 71,650

4th quarter 7,700 $ ×1.50 $ 11,550 80,000 91,550 22,000 $ 69,550

Year 35,000 $ ×1.50 $ 52,500 320,000 372,500 88,000 $ 284,500

$

$

Year 52,50 320,00 372,50

284,50

manufacturing overhead


Your response

Correct response

Exercise 9-12 Sales and Production Budgets [LO2, LO3] The marketing department of Jessi Corporation has submitted the following sales forecast for the fiscal year (all sales are on ): Budgeted unit sales

1st Quarter 11,000

2nd Quarter 12,000

3rd Quarter 14,000

4th Quarter 13,000

Exercise 9-12 Sales and Production Budgets [LO2, LO3] The marketing department of Jessi Corporation has submitted the following sales forecast for the fiscal year (all sales are on ): Budgeted unit sales

1st Quarter 11,000

2nd Quarter 12,000

3rd Quarter 14,000

4th Quarter 13,000

The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of s receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of s receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

Requirement 1: (a) Calculate the company's total sales. (Omit the "$" sign in your response.)

Requirement 1: (a) Calculate the company's total sales. (Omit the "$" sign in your response.)

Total sales

1st Quarter $ 1 (0%)

2nd Quarter $ 1 (0%)

3rd Quarter $ 1 (0%)

4th Quarter 1 (0%) $

Total sales

1st Quarter $ 198,000

Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% :

Budgeted unit sales Selling price per unit Total sales

Jessi Corporation Sales Budget 1st 2nd Quarter Quarter 11,000 12,000 × $18.00 × $18.00 $ 198,000 $ 216,000

3rd Quarter 14,000 × $18.00 $ 252,000

Your response

4th Quarter 13,000 × $18.00 $ 234,000

Year 50,000 × $18.00 $ 900,000

Correct response

2nd Quarter $ 216,000

3rd Quarter $ 252,000

4th Quarter 234,000 $

(b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

s receivable, beginning balance 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections

Jessi Corporation Schedule of Expected Cash Collections st 1 Quarter 2nd Quarter 1 (0%) $ 1 (0%) $ 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ 1 (0%) $

rd

3 Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ $

th

(b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

4 Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) $ $

Year s $ 1 (0%) receivable, beginning balance 1 (0%) 1st Quarter sales 1 (0%) 2nd Quarter sales rd 1 (0%) 3 Quarter sales 1 (0%) 4th Quarter sales (0%) Total $ 1cash collections

Jessi Corporation Schedule of Expected Cash Collections st 1 Quarter 2nd Quarter 70,200 $ 0 $ 128,700 59,400 0 140,400 0 0 0 0 198,900 $ 199,800 $

3rd Quarter $

$

0 0 64,800 163,800 0 228,600

4th Quarter $

$

0 0 0 75,600 152,100 227,700

Year $ 70,200 188,100 205,200 239,400 152,100 $ 855,000

Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%

Your response

Correct response



Jessi Corporation Production Budget 1st Quarter 2nd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

3rd Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)


4th Quarter 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

Year 1 (0%)unit sales Budgeted (0%) ending inventory Add1desired 1 units (0%)needed Total 1 beginning (0%) Less inventory 1 (0%) Required production

Jessi Corporation Production Budget 1st Quarter 2nd Quarter 11,000 12,000 1,800 2,100 12,800 14,100 1,650 1,800 11,150 12,300

3rd Quarter 14,000 1,950 15,950 2,100 13,850

4th Quarter 13,000 1,850 14,850 1,950 12,900

Year 50,000 1,850 51,850 1,650 50,200

Total grade: 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%

Question 14: Score 0/4 Your response Exercise 10-1 Prepare a Flexible Budget [LO1] Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company's planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31

Correct response Exercise 10-1 Prepare a Flexible Budget [LO1] Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company's planning budget for May appears below: Puget Sound Divers Planning Budget

Budgeted diving-hours (q) Revenue ($365.00q) Expenses: Wages and salaries ($8,000 + $125.00q) Supplies ($3.00q) Equipment rental ($1,800 + $32.00q) Insurance ($3,400) Miscellaneous ($630 + $1.80q) Total expense Net operating income

100 $ 36,500 20,500 300 5,000 3,400 810 30,010 $ 6,490

Required: During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity. (Input all amounts as positive values. Omit the "$" sign in your response.)

100 $ 36,500 20,500 300 5,000 3,400 810 30,010 $ 6,490

Required: During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity. (Input all amounts as positive values. Omit the "$" sign in your response.)

Puget Sound Divers Flexible Budget For the Month Ended May 31 Revenue Expenses: Wages and salaries Supplies Equipment rental Insurance Miscellaneous Total expense Net operating income

For the Month Ended May 31 Budgeted diving-hours (q) Revenue ($365.00q) Expenses: Wages and salaries ($8,000 + $125.00q) Supplies ($3.00q) Equipment rental ($1,800 + $32.00q) Insurance ($3,400) Miscellaneous ($630 + $1.80q) Total expense Net operating income

$ 1 (0%) 1 1 1 1 1 1 $ 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%)

Puget Sound Divers Flexible Budget For the Month Ended May 31 Revenue Expenses: Wages and salaries Supplies Equipment rental Insurance Miscellaneous Total expense Net operating income

$ 38,325 21,125 315 5,160 3,400 819 30,819 $ 7,506

Total grade: 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Revenue ($365.00 × 105) = $38,325 Wages and salaries ($8,000 + ($125.00 × 105)) = $21,125 Supplies ($3.00 × 105) = $315 Equipment rental ($1,800 + ($32.00 × 105)) = $5,160 Miscellaneous ($630 + ($1.80 × 105)) = $819

Question 15: Score 1.33/4 Your response

Correct response

Exercise 10-2 Prepare a Report Showing Activity Variances [LO2] Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.50q) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.10q) Total expense Net operating income

18,000 $ 81,000 43,200 10,600 3,300 4,300 2,300 2,480 66,180 $ 14,820

Exercise 10-2 Prepare a Report Showing Activity Variances [LO2] Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.50q) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.10q) Total expense Net operating income

18,000 $ 81,000 43,200 10,600 3,300 4,300 2,300 2,480 66,180 $ 14,820

In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below: Flight Café Flexible Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.50q) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.10q) Total expense Net operating income

In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below: 17,800 $ 80,100 42,720 10,540 3,290 4,300 2,300 2,460 65,610 $ 14,490

Required: Prepare a report showing the company's activity variances for July. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance

Flight Café Activity Variances For the Month Ended July 31 Activity Variances 1 (0%) U (6%) $ 1 1 1 1 1

(0%) (0%) (0%) (0%) (0%)

F (6%) None (0%) None (0%) None (6%) None (6%)

Flight Café Flexible Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.50q) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.10q) Total expense Net operating income

17,800 $ 80,100 42,720 10,540 3,290 4,300 2,300 2,460 65,610 $ 14,490

Required: Prepare a report showing the company's activity variances for July. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Revenue

Flight Café Activity Variances For the Month Ended July 31 Activity Variances 900 U $

Miscellaneous Total expense Net operating income

$

1 (0%) F (6%) 1 (0%) U (0%) 1 (0%) U (6%)

Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Total expense Net operating income

480 60 10 0 0 20 $

F F F None None F

570 F 330 U

Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 6% + 0% + 0% + 0% + 0% + 0% + 6% + 0% + 6% + 0% + 6% + 0% + 0% + 0% + 6% : Flight Café Activity Variances For the Month Ended July 31 Planning Flexible Budget Budget 18,000 17,800 $ 81,000 $ 80,100

Meals Revenue ($4.50q) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.10q) Total expense Net operating income

43,200 10,600 3,300 4,300 2,300 2,480 66,180 $ 14,820

42,720 10,540 3,290 4,300 2,300 2,460 65,610 $ 14,490

Activity Variances $ 900 U 480 60 10 0 0 20 570 $ 330

F F F None None F F U

Question 16: Score 0.88/4 Your response Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3] Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) Revenue ($4.00q) Expenses:

8,000 $ 32,000

Correct response Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3] Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) Revenue ($4.00q)

8,000 $ 32,000

Packing supplies ($0.50q) Oyster bed maintenance ($3,200) Wages and salaries ($2,900 +$0.30q) Shipping ($0.80q) Utilities ($830) Other ($450 + $0.05q) Total expense Net operating income

4,000 3,200 5,300 6,400 830 850 20,580 $ 11,420

Expenses: Packing supplies ($0.50q) Oyster bed maintenance ($3,200) Wages and salaries ($2,900 +$0.30q) Shipping ($0.80q) Utilities ($830) Other ($450 + $0.05q) Total expense Net operating income

4,000 3,200 5,300 6,400 830 850 20,580 $ 11,420

The actual results for August appear below: Quilcene Oysteria Income Statement For the Month Ended August 31

The actual results for August appear below:

Actual pounds Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income

8,000 $ 35,200 4,200 3,100 5,640 6,950 810 980 21,680 $ 13,520

Required: Prepare a report showing the company's revenue and spending variances for August. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue and Spending Variances 1 (0%) F (6%) $

Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income

$

1 1 1 1 1 1 1 1

(0%) F (0%) (0%) U (0%) (0%) None (0%) (0%) F (0%) (0%) None (0%) (0%) U (6%) (0%) U (6%) (0%) F (6%)

Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income

8,000 $ 35,200 4,200 3,100 5,640 6,950 810 980 21,680 $ 13,520

Required: Prepare a report showing the company's revenue and spending variances for August. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue and Spending Variances 3,200 F $

Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other

200 100 340 550 20 130

U F U U F U

Total expense Net operating income

$

1,100 U 2,100 F

Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 6% + 0% + 6% + 0% + 6% : Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Flexible Actual Budget Result 8,000 8,000 $ 32,000 $ 35,200

Pounds Revenue ($4.00q) Expenses: Packing supplies ($0.50q) Oyster bed maintenance ($3,200) Wages and salaries ($2,900 + $0.30q) Shipping ($0.80q) Utilities ($830) Other ($450 + $0.05q) Total expense Net operating income

4,000 3,200 5,300 6,400 830 850 20,580 $ 11,420

4,200 3,100 5,640 6,950 810 980 21,680 $ 13,520

Revenue and Spending Variances $ 3,200 F 200 100 340 550 20 130 1,100 $ 2,100

U F U U F U U F


Correct response

Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4] Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Planning Budget 50 $ 16,000

Flexible Budget 48 $ 15,360

Actual Budget 48 $ 13,650

8,100 1,150 2,550 350 290 12,440

7,936 1,104 2,474 336 286 12,136

8,430 1,260 2,350 336 460 12,836

Flights (q) Revenue ($320.00q) Expenses: Wages and salaries ($4,000 + $82.00q) Fuel ($23.00q) Airport fees ($650 + $38.00q) Aircraft depreciation ($7.00q) Office expenses ($190 + $2.00q) Total expense

Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4] Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Planning Budget 50 $ 16,000


Actual Budget 48 $ 13,650

8,100 1,150 2,550 350

7,936 1,104 2,474 336

8,430 1,260 2,350 336

Flights (q) Revenue ($320.00q) Expenses: Wages and salaries ($4,000 + $82.00q) Fuel ($23.00q) Airport fees ($650 + $38.00q) Aircraft depreciation ($7.00q)

Net operating income

$

3,560

$ 3,224

$

814

The company measures its activity in of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Revenue Expenses: Wages and salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income

$

1 1 1 1 1 1 1

(0%) U (0%) (0%) U (0%) (0%) F (3%) (0%) U (0%) (0%) F (3%) (0%) U (0%) (0%) U (3%)

$

$

(0%) None (0%) (0%) U (3%) (0%) U (0%) (0%) U (0%) (0%) None (0%) (0%) F (0%) (0%) F (0%)

286 12,136 $ 3,224

460 12,836 $ 814

Required: Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Revenue and Spending Variances 1 (0%) None (0%) 1 1 1 1 1 1 1

290 12,440 $ 3,560

The company measures its activity in of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required: Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Activity Variances 1 (0%) None (0%) $

Office expenses ($190 + $2.00q) Total expense Net operating income

Revenue Expenses: Wages and salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Activity Variances 640 U $

$

164 46 76 14 4 304 336

F F F F F F U

$

$

Revenue and Spending Variances 1,710 U 494 156 124 0 174 700 2,410

U U F None U U U

Total grade: 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 0.0×1/32 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% : Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31

Flights (q) Revenue ($320.00q) Expenses: Wages and salaries ($4,000 + $82.00q) Fuel ($23.00q) Airport fees ($650 + $38.00q) Aircraft depreciation ($7.00q)

Planning Budget 50 $ 16,000

8,100 1,150 2,550 350

Activity Variances $ 640 U

164 46 76 14

F F F F


7,936 1,104 2,474 336

Revenue and Spending Variances $ 1,710 U

494 156 124 0

U U F None

Actual Results 48 $ 13,650

8,430 1,260 2,350 336

Office expenses ($190 + $2.00q) Total expense Net operating income

290 12,440 $ 3,560

4 F 304 F $ 336 U

286 12,136 $ 3,224

174 U 700 U $ 2,410 U

460 12,836 $ 814


Correct response

Exercise 10-5 Prepare a Flexible Budget with More Than One Cost Driver [LO5] Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of engers—that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80 engers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Fixed Cost Per Month $ 5,200 $ 1,700 $ 4,300 $ 2,900

Vessel operating costs Advertising istrative costs Insurance

Cost per Cruise $ 480.00

Cost per enger $2.00

$ 24.00

$1.00

Exercise 10-5 Prepare a Flexible Budget with More Than One Cost Driver [LO5] Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of engers—that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80 engers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:

Vessel operating costs Advertising istrative costs Insurance

Fixed Cost Per Month $ 5,200 $ 1,700 $ 4,300 $ 2,900

Cost per Cruise $ 480.00

Cost per enger $ 2.00

$ 24.00

$ 1.00

For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per enger. The company's sales should average $25 per enger. The company's planning budget for July is based on 24 cruises and 1,400 engers.

For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per enger. The company's sales should average $25 per enger. The company's planning budget for July is based on 24 cruises and 1,400 engers.

Required: Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your response.)

Required: Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your response.)

Alyeski Tours Planning Budget For the Month Ended July 31 Revenue Expenses: Vessel operating costs Advertising istrative costs Insurance Total expense Net operating income

$ 1 (0%) 1 1 1 1 1 $ 1

(0%) (0%) (0%) (0%) (0%) (0%)

Total grade: 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 = 0% + 0% + 0% + 0% + 0% + 0% + 0% :

Alyeski Tours Planning Budget For the Month Ended July 31 Revenue Expenses: Vessel operating costs Advertising istrative costs Insurance Total expense Net operating income

$ 35,000 19,520 1,700 6,276 2,900 30,396 $ 4,604

Revenue ($25.00 × 1,400) = $35,000 Vessel operating costs ($5,200 + ($480.00 × 24) + ($2.00 × 1,400)) = $19,520 istrative costs ($4,300 + ($24.00 × 24) + ($1.00 × 1,400)) = $6,276


Exercise 10-8 Flexible Budget [LO1] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000

Cost per Car Washed $ 0.80 $ 0.15 $ 0.20 $ 0.30

$ 0.10

Correct response Exercise 10-8 Flexible Budget [LO1] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ $ $ $

5,000 6,000 8,000 4,000


$ 0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

Required: Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your response.)

Required: Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your response.)

Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

$ 1 (0%) 1 1 1 1 1 1 1 1 $ 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%)

Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

$ 44,100 7,200 2,550 1,800 7,700 6,000 8,000 4,900 38,150 $ 5,950

Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Revenue ($4.90 × 9,000) = $44,100 Cleaning supplies ($0.80 × 9,000) = $7,200 Electricity ($1,200 + ($0.15 × 9,000)) = $2,550 Maintenance ($0.20 × 9,000) = $1,800 Wages and salaries ($5,000 + ($0.30 × 9,000)) = $7,700 istrative expenses ($4,000 + ($0.10 × 9,000)) = $4,900


Correct response

Exercise 10-9 Flexible Budget [LO1] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs:

Exercise 10-9 Flexible Budget [LO1] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs:

Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000


$ 0.10


$ 1,200 $ $ $ $

5,000 6,000 8,000 4,000


$ 0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company actually washed 8,800 cars in August and to collect an average of $4.90 per car washed. Required: Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your response.) Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

$ 1 (0%) 1 1 1 1 1 1 1 1 $ 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%)

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company actually washed 8,800 cars in August and to collect an average of $4.90 per car washed. Required: Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your response.) Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent

$ 43,120 7,040 2,520 1,760 7,640 6,000 8,000

4,880 37,840 $ 5,280

istrative expenses Total expense Net operating income

Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% : Revenue ($4.90 × 8,800) = $43,120 Cleaning supplies ($0.80 × 8,800) = $7,040 Electricity ($1,200 + ($0.15 × 8,800)) = $2,520 Maintenance ($0.20 × 8,800) = $1,760 Wages and salaries ($5,000 + ($0.30 × 8,800)) = $7,640 istrative expenses ($4,000 + ($0.10 × 8,800)) = $4,880

Question 21: Score 0.4/4 Your response Exercise 10-10 Prepare a Report Showing Activity Variances [LO2] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000


$ 0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appears below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent

8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 8,000

Correct response Exercise 10-10 Prepare a Report Showing Activity Variances [LO2] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ $ $ $

5,000 6,000 8,000 4,000


$ 0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appears below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity

8,800 $ 43,080 7,560 2,670

istrative expenses Total expense Net operating income

4,950 39,940 $ 3,140

Required: Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Lavage Rapide Activity Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

$

Activity Variances 1 (0%) U (5%)

$

1 1 1 1 1 1 1 1 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%)

Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140

Required: Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Lavage Rapide Activity Variances For the Month Ended August 31 Activity Variances 980 U $

None (0%) None (0%) U (0%) U (0%) F (0%) U (0%) U (0%) U (0%) U (5%)

Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

160 30 40 60 0 0 20 $

F F F F None None F

310 F 670 U

Total grade: 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 = 0% + 5% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 5% : Lavage Rapide Activity Variances For the Month Ended August 31 Planning Flexible Budget Budget 9,000 8,800 $ 44,100 $ 43,120

Cars washed (q) Revenue ($4.90q) Expenses: Cleaning supplies ($0.80q) Electricity ($1,200 + $0.15q) Maintenance ($0.20q) Wages and salaries ($5,000 + $0.30q)

7,200 2,550 1,800 7,700

7,040 2,520 1,760 7,640

Activity Variances $ 980 U 160 30 40 60

F F F F

Depreciation ($6,000) Rent ($8,000) istrative expenses ($4,000 + $0.10q) Total expense Net operating income

6,000 8,000

6,000 8,000

4,900 38,150 $ 5,950

4,880 37,840 $ 5,280

0 None 0 None 20 F 310 F $ 670 U

Question 22: Score 0.8/4 Your response Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000


$ 0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appears below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140

Required: Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Correct response Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses

$ 1,200 $ $ $ $

5,000 6,000 8,000 4,000


$ 0.10


8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140

Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue and Spending Variances 1 (0%) U (5%) $


$

1 1 1 1 1 1 1 1 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%)

Required: Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue and Spending Variances 40 U $

F (0%) None (0%) U (5%) None (0%) F (0%) None (5%) None (0%) U (5%) F (0%)


520 150 500 860 0 0 70 $

U U U U None None U

2,100 U 2,140 U

Total grade: 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 = 0% + 5% + 0% + 0% + 0% + 0% + 0% + 5% + 0% + 0% + 0% + 0% + 0% + 5% + 0% + 0% + 0% + 5% + 0% + 0% :

Cars washed (q) Revenue ($4.90q) Expenses: Cleaning supplies ($0.80q) Electricity ($1,200 + $0.15q) Maintenance ($0.20q) Wages and salaries ($5,000 + $0.30q) Depreciation ($6,000) Rent ($8,000) istrative expenses ($4,000 + $0.10q) Total expense Net operating income

Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Flexible Actual Budget Results 8,800 8,800 $ 43,120 $ 43,080

Revenue and Spending Variances $

40 U

7,040 2,520 1,760

7,560 2,670 2,260

520 U 150 U 500 U

7,640 6,000 8,000

8,500 6,000 8,000

860 U 0 None 0 None

4,880 37,840 $ 5,280

4,950 39,940 $ 3,140

70 U 2,100 U $ 2,140 U


Correct response

Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs:

Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4] Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs:


$ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000



$ 0.10


8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140

Required: Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Revenue Expenses:

Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Activity Variances 1 (0%) F (0%) $

$ 1,200 $ $ $ $

5,000 6,000 8,000 4,000


$ 0.10


8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140

Required: Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., Revenue and Spending Variances zero variance). Omit the "$" sign in your response.) 1 (0%) F (0%) $

Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent istrative expenses Total expense Net operating income

$

1 1 1 1 1 1 1 1 1

(0%) F (3%) (0%) F (3%) (0%) U (0%) (0%) F (3%) (0%) F (0%) (0%) None (3%) (0%) F (3%) (0%) None (0%) (0%) U (3%)

1 1 1 1 1 1 1 1 1

$

(0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%) (0%)

U (3%) U (3%) None (0%) U (3%) U (0%) F (0%) U (3%) None (0%) None (0%)


Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Activity Variances 980 U $

$

160 30 40 60 0 0 20 310 670

F F F F None None F F U

$

$

Revenue and Spending Variances 40 U 520 150 500 860 0 0 70 2,100 2,140

U U U U None None U U U

Total grade: 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 = 0% + 0% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% : Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31

Cars washed (q) Revenue ($4.90q) Expenses: Cleaning supplies ($0.80q) Electricity ($1,200 + $0.15q) Maintenance ($0.20q) Wages and salaries ($5,000 + $0.30q) Depreciation ($6,000) Rent ($8,000) istrative expenses ($4,000 + $0.10q) Total expense Net operating income


Planning Budget 9,000 $ 44,100

$ 980 U

Flexible Budget 8,800 $ 43,120

7,200 2,550 1,800

160 F 30 F 40 F

7,700 6,000 8,000 4,900 38,150 $ 5,950

Activity Variances

60 F 0 None 0 None 20 F 310 F $ 670 U

Revenue and Spending Variances 40 U

Actual Results 8,800 $ 43,080

7,040 2,520 1,760

520 U 150 U 500 U

7,560 2,670 2,260

7,640 6,000 8,000

860 U 0 None 0 None

8,500 6,000 8,000

4,880 37,840 $ 5,280

$

70 U 2,100 U $ 2,140 U

4,950 39,940 $ 3,140

Your response

Correct response Exercise 10-13 Flexible Budget [LO1] Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:

Exercise 10-13 Flexible Budget [LO1] Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs: Fixed Cost Per Month Direct materials Direct labor Supplies Utilities Depreciation Insurance

Cost per Machine-Hour $ 4.25

$ 36,800 $ 0.30 $ 0.05

$ 1,400 $ 16,700 $ 12,700

Fixed Cost Per Month Direct materials Direct labor Supplies Utilities Depreciation Insurance

Cost per Machine-Hour $ 4.25

$ 36,800 $ 1,400 $ 16,700 $ 12,700

$ 0.30 $ 0.05

For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machinehours in June. Note that the company's direct labor is a fixed cost.

For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machinehours in June. Note that the company's direct labor is a fixed cost.

Required: Prepare the company's planning budget for manufacturing costs for June. (Omit the "$" sign in your response.)

Required: Prepare the company's planning budget for manufacturing costs for June. (Omit the "$" sign in your response.)

Wyckam Manufacturing Inc. Planning Budget for Manufacturing Cost For the Month Ended June 30 Direct materials $ Direct labor Supplies Utilities Depreciation Insurance Total manufacturing cost $

1 1 1 1 1 1 1

(0%) (0%) (0%) (0%) (0%) (0%) (0%)

Wyckam Manufacturing Inc. Planning Budget for Manufacturing Cost For the Month Ended June 30 Direct materials $ Direct labor Supplies Utilities Depreciation Insurance Total manufacturing cost $

21,250 36,800 1,500 1,650 16,700 12,700 90,600

Total grade: 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 = 0% + 0% + 0% + 0% + 0% + 0% + 0% : Direct materials ($4.25 × 5,000) = $21,250 Supplies ($0.30 × 5,000) = 1,500 Utilities ($1,400 + ($0.05 × 5,000)) = 1,650


Correct response

Exercise 10-14 Flexible Budgets and Activity Variances [LO1, LO2] Jake's Roof Repair has provided the following data concerning its costs: Exercise 10-14 Flexible Budgets and Activity Variances [LO1, LO2] Jake's Roof Repair has provided the following data concerning its costs:

Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent istrative expenses

Fixed Cost Per Month $ 23,200 $ $ $ $

Cost per Repair-Hour $ 16.30 $ 8.60 $ 0.40 $ 1.70

1,600 6,400 3,480 4,500

Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent istrative expenses

$ $ $ $

1,600 6,400 3,480 4,500

Cost per Repair-Hour $ 16.30 $ 8.60 $ 0.40 $ 1.70 $ 0.80

$ 0.80

For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repairhours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour. Required: Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)

For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repairhours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour. Required: Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)

Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses: Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent istrative expenses Total expense Net operating income

Fixed Cost Per Month $ 23,200

$

Activity Variances 1 (0%) F (6%)

$

1 1 1 1 1 1 1 1

Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue

(0%) F (0%) (0%) U (6%) (0%) None (0%) (0%) U (6%) (0%) U (0%) (0%) F (0%) (0%) None (0%) (0%) F (6%)

$

Expenses: Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent istrative expenses Total expense Net operating income

Activity Variances 4,450 F 1,630 860 40 170 0 80 2,780

$

U U U U None U U

1,670 F

Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 0% + 0% + 6% + 0% + 0% + 0% + 6% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 6% : Jake's Roof Repair Activity Variances For the Month Ended May 31 Planning Flexible Budget Budget

Activity Variances

Repair-hours (q)

2,800

2,900

$ 124,600

$ 129,050

$ 4,450 F

Wages and salaries ($23,200 + $16.30q)

68,840

70,470

1,630 U

Parts and supplies ($8.60q)

24,080

24,940

860 U

2,720

2,760

40 U

11,160

11,330

170 U

3,480

3,480

Revenue ($44.50q) Expenses:

Equipment depreciation ($1,600 + $0.40q) Truck operating expenses ($6,400 + $1.70q) Rent ($3,480) istrative expenses ($4,500 + $0.80q) Total expense Net operating income

$

0 None

6,740

6,820

80 U

117,020

119,800

2,780 U

9,250

$ 1,670 F

7,580

$

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