CH 9 PDF

Question 1: Score 0/4
Your response Correct response
Exercise 9-1 Schedule of Expected Cash Collections [LO2] 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 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: shown in the company's sales budget for the second quarter given below:
April May June Total April May June Total

Budgeted sales (all on account) $ 300,000 $ 500,000 $ 200,000 $ 1,000,000 Budgeted sales (all on account) $ 300,000 $ 500,000 $ 200,000 $ 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 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 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. debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.
Requirement 1: Requirement 1:
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells
blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
April May June Total April May June Total

February sales $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) February sales $ 23,000 $ 0 $ 0 $ 23,000
March sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) March sales 182,000 26,000 0 208,000
April sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) April sales 60,000 210,000 30,000 300,000
May sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) May sales 0 100,000 350,000 450,000
June sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) June sales 0 0 40,000 40,000
Total cash collections $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) Total cash collections $ 265,000 $ 336,000 $ 420,000 $ 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%
Feedback:
April May June Total
February sales:
$230,000 × 10% $ 23,000 $ 23,000

March Sales:
$260,000 × 70%, 10% 182,000 $ 26,000 208,000

April sales:
$300,000 × 20%, 70%, 10% 60,000 210,000 $ 30,000 300,000

May sales:
$500,000 × 20%, 70% 100,000 350,000 450,000

June sales:
$200,000 × 20% 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.
Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that
date. (Omit the "$" sign in your response.) date. (Omit the "$" sign in your response.)
Accounts receivable $ 1 (0%) Accounts receivable $ 210,000
Total grade: 0.0×1/1 = 0%

Feedback:
Accounts receivable at June 30:
From May sales: $500,000 × 10% $ 50,000

From June sales: $200,000 × (70% + 10%) 160,000
Total accounts receivable at June 30 $ 210,000
Exercise 9-2 Production Budget [LO3] 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: Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales
Sales
in Units
in Units
April 50,000
May 75,000 April 50,000
June 90,000 May 75,000
July 80,000 June 90,000
July 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
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that
units.
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:
Required Show the number of units to be produced each month and for the quarter in total.
Production
April 1 (0%) Required
May 1 (0%) Production
June 1 (0%) April 52,500
Quarter 1 (0%)
May 76,500
June 89,000
Quarter 218,000
Total grade: 0.0×1/4 + 0.0×1/4 + 0.0×1/4 + 0.0×1/4 = 0% + 0% + 0% + 0%

Feedback:
April May June Quarter
Budgeted sales in units 50,000 75,000 90,000 215,000
Add desired ending inventory* 7,500 9,000 8,000 8,000
Total needs 57,500 84,000 98,000 223,000
Less beginning inventory 5,000 7,500 9,000 5,000
Required production 52,500 76,500 89,000 218,000
*10% of the following month's sales in units.
Exercise 9-3 Direct Materials Budget [LO4] 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
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
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:
rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
Year 2 Year 3
First Second Third Fourth First Year 2 Year 3
Budgeted production, in bottles 60,000 90,000 150,000 100,000 70,000 First Second Third Fourth First
Budgeted production, in bottles 60,000 90,000 150,000 100,000 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. 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
Required: following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2.
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.) 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
Year 2 amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)
First Second Third
Production needs—grams 1 (0%) 1 (0%) 1 (0%)
Less (0%) : desired ending inventory—grams 1 (0%) 1 (0%) 1 (0%) Year 2
Total needs—grams 1 (0%) 1 (0%) 1 (0%) First Second Third
Add (0%) : beginning inventory—grams 1 (0%) 1 (0%) 1 (0%)Production needs—grams 180,000 270,000 450,000
Raw materials to be purchased—grams 1 (0%) 1 (0%) 1 (0%)Add : desired ending
1 (0%)inventory—grams
1 (0%) 54,000 90,000 60,000 42,000
Cost of raw materials to be purchased 1 (0%) 1 (0%) 1 (0%)Total needs—grams
1 (0%) 1 (0%) 234,000 360,000 510,000 342,000
Less : beginning inventory—grams 36,000 54,000 90,000 60,000
Raw materials to be purchased—grams 198,000 306,000 420,000 282,000
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%
Feedback:
Year 2 Year 3
First Second Third Fourth First
70,00
Required production in bottles 60,000 90,000 150,000 100,000
0
Number of grams per bottle × 3 × 3 × 3 × 3 × 3
210,00
Total production needs—grams 180,000 270,000 450,000 300,000
0
Exercise 9-4 Direct Labor Budget [LO5] 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 production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for
the upcoming fiscal year: the upcoming fiscal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced 8,000 6,500 7,000 7,500 Units to be produced 8,000 6,500 7,000 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 $12.00 per hour.
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is
adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit
the "$" sign in your response.) the "$" sign in your response.)
Total direct Total

labor cost direct
1st Quarter $ 1 (0%) labor cost
2nd Quarter $ 1 (0%) 1st Quarter $ 33,600
3rd Quarter $ 1 (0%) 2nd Quarter $ 27,300
4th Quarter $ 1 (0%) 3rd Quarter $ 29,400
Year $ 1 (0%) 4th Quarter $ 31,500
Year $ 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%

Feedback:
Assuming that the direct labor workforce is adjusted each quarter, the direct labor budget is:
1st 2nd 3rd 4th

Quarter Quarter Quarter Quarter Year
Units to be produced 8,000 6,500 7,000 7,500 29,000
Direct labor time per unit (hours) × 0.35 × 0.35 × 0.35 × 0.35 × 0.35
Total direct labor hours needed 2,800 2,275 2,450 2,625 10,150
Direct labor cost per hour × $12.00 × $12.00 × $12.00 × $12.00 × $12.00
Total direct labor cost $ 33,600 $ 27,300 $ 29,400 $ 31,500 $ 121,800
Requirement 2:
Requirement 2:
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not
Compute the company's direct labor budget for the upcoming 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
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
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
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 "$" sign in your response.)
paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)
Total
Total direct
direct
labor cost
labor cost
1st Quarter $ 1 (0%)
1st Quarter $ 34,800
2nd Quarter $ 1 (0%)
2nd Quarter $ 31,200
3rd Quarter $ 1 (0%)
3rd Quarter $ 31,200
4th Quarter $ 1 (0%)
4th Quarter $ 31,650
Year $ 1 (0%)
Year $ 128,850
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%

Feedback:
Assuming that the direct labor workforce is not adjusted each quarter and that overtime wages are paid, the direct labor
budget is:
1st 2nd 3rd 4th

Units to be produced 8,000 6,500 7,000 7,500
Direct labor time per unit (hours) × 0.35 × 0.35 × 0.35 × 0.35
Total direct labor hours needed 2,800 2,275 2,450 2,625
Regular hours paid 2,600 2,600 2,600 2,600
Overtime hours paid 200 0 0 25
Wages for regular hours (@ $12.00 per hour) $ 31,200 $ 31,200 $ 31,200 $ 31,200 $ 124,800
Overtime wages (@ 1.5 hours × $12.00 per hour) 3,600 0 0 450 4,050
Exercise 9-5 Manufacturing Overhead Budget [LO6] Exercise 9-5 Manufacturing Overhead Budget [LO6]
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning
budgeted direct labor-hours: budgeted direct labor-hours:
Budgeted direct labor-hours 8,000 8,200 8,500 7,800 Budgeted direct labor-hours 8,000 8,200 8,500 7,800
The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing 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 overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is
$16,000 per quarter. $16,000 per quarter.
Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your
response.) response.)
Cash disbursements Cash disbursements

for manufacturing for manufacturing
overhead overhead
1st Quarter $ 1 (0%) 1st Quarter $ 58,000
2nd Quarter $ 1 (0%) 2nd Quarter $ 58,650
3rd Quarter $ 1 (0%) 3rd Quarter $ 59,625
4th Quarter $ 1 (0%) 4th Quarter $ 57,350
Year $ 1 (0%) Year $ 233,625
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%

Feedback:
Yuvwell Corporation
Manufacturing Overhead Budget
1st 2nd 3rd 4th
Budgeted direct labor-hours 8,000 8,200 8,500 7,800 32,500
Variable overhead rate $ × 3.25 $ × 3.25 $ × 3.25 $ × 3.25 $ × 3.25
Variable manufacturing overhead $ 26,000 $ 26,650 $ 27,625 $ 25,350 $ 105,625
Fixed manufacturing overhead 48,000 48,000 48,000 48,000 192,000
Total manufacturing overhead 74,000 74,650 75,625 73,350 297,625
Less depreciation 16,000 16,000 16,000 16,000 64,000
Cash disbursements for manufacturing overhead $ 58,000 $ 58,650 $ 59,625 $ 57,350 $ 233,625
Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the
upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" 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%

Feedback:
Total budgeted manufacturing overhead for the year (a) $ 297,625

Total budgeted direct labor-hours for the year (b) 32,500
Manufacturing overhead rate for the year (a) ÷ (b) $ 9.16
Exercise 9-6 Selling and Administrative Expense Budget [LO7] Exercise 9-6 Selling and Administrative Expense Budget [LO7]
The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below: The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:
Budgeted unit sales 15,000 16,000 14,000 13,000 Budgeted unit sales 15,000 16,000 14,000 13,000
The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include
advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. 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, 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. property taxes of $8,000 will be paid in the second quarter.
Required: Required:
Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive
values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Weller Company Weller Company

Selling and Administrative Expense Budget Selling and Administrative Expense Budget
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year Quarter Quarter Quarter Quarter Year
Variable expense $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)
Variable$expense 1 (0%) $ 37,500 $ 40,000 $ 35,000 $ 32,500 $ 14
Fixed selling and administrative expenses: Fixed selling and administrative expenses:
Advertising 1 (0%) 1 (0%) 1 (0%) 1 (0%)Advertising 1 (0%) 8,000 8,000 8,000 8,000 3
Executive salaries 1 (0%) 1 (0%) 1 (0%) 1 (0%)Executive salaries 1 (0%) 35,000 35,000 35,000 35,000 14
Insurance 1 (0%) 1 (0%) 1 (0%) 1 (0%)Insurance 1 (0%) 5,000 0 5,000 0 1
Property taxes 1 (0%) 1 (0%) 1 (0%) 1 (0%)Property taxes1 (0%) 0 8,000 0 0
Depreciation 1 (0%) 1 (0%) 1 (0%) 1 (0%)Depreciation 1 (0%) 20,000 20,000 20,000 20,000 8
Total fixed selling and administrative Total fixed selling and administrative
1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 68,000 71,000 68,000 63,000 27
expenses expenses
Total selling and administrative expenses 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)
Total selling and administrative expenses 105,500 111,000 103,000 95,500 41
Less depreciation 1 (0%) 1 (0%) 1 (0%) 1 (0%)
Less depreciation 1 (0%) 20,000 20,000 20,000 20,000 8
Cash disbursements for selling and Cash disbursements for selling and
$ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 85,500 $ 91,000 $ 83,000 $ 75,500 $ 33
administrative expenses administrative expenses
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%
Feedback:
1st 2nd 3rd 4th
Budgeted unit sales 15,000 16,000 14,000 13,000 58,000
Variable selling and administrative expense
$ × 2.50 $ × 2.50 $ × 2.50 $ × 2.50 $ × 2.50
per unit
Variable expense $ 37,500 $ 40,000 $ 35,000 $ 32,500 $ 145,000
Exercise 9-7 Cash Budget [LO8] Exercise 9-7 Cash Budget [LO8]
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following
summary of its budgeted cash flows: summary of its budgeted cash flows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total cash receipts $ 180,000 $ 330,000 $ 210,000 $ 230,000
Total cash disbursements $ 260,000 $ 230,000 $ 220,000 $ 240,000 Total cash receipts $ 180,000 $ 330,000 $ 210,000 $ 230,000
Total cash disbursements $ 260,000 $ 230,000 $ 220,000 $ 240,000
The company's beginning cash balance for the upcoming 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 The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash
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. balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company
Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any
quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not
Required: compounded.
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total
financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank
Required:
- be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total
Garden Depot financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells
Cash Budget blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Cash balance, beginning $ 1 (0%) $ 1 (0%) $ 1 (0%) $ Garden Depot
Total cash receipts 1 (0%) 1 (0%) 1 (0%) Cash Budget
Total cash available 1 (0%) 1 (0%) 1 (0%) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Less total cash disbursements 1 (0%) 1 (0%) 1 (0%) Cash balance, beginning $ 20,000 $ 10,000 $ 35,800 $ 25,800
Excess (deficiency) of cash available over disbursements 1 (0%) 1 (0%) 1 (0%) Total cash receipts 180,000 330,000 210,000 230,000
Financing:
Borrowings (at beginnings of quarters) 1 (0%) 1 (0%) 1 (0%) Total cash available 200,000 340,000 245,800 255,800
Repayments (at ends of quarters) 1 (0%) 1 (0%) 1 (0%) Less total cash disbursements 260,000 230,000 220,000 240,000
Interest 1 (0%) 1 (0%) 1 (0%) Excess (deficiency) of cash available over disbursements -60,000 110,000 25,800 15,800
Total financing 1 (0%) 1 (0%) 1 (0%) Financing:
Cash balance, ending $ 1 (0%) $ 1 (0%) $ 1 (0%) $ Borrowings (at beginnings of quarters) 70,000 0 0 0
Repayments (at ends of quarters) 0 -70,000 0 0
Interest 0 -4,200 0 0
Total financing 70,000 -74,200 0 0
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%
Feedback:
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
Exercise 9-8 Budgeted Income Statement [LO9] Exercise 9-8 Budgeted Income Statement [LO9]
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the
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:
following summary data to use in its annual budgeting process:
Budgeted unit sales 460
Selling price per unit $ 1,950 Budgeted unit sales 460
Cost per unit $ 1,575
Selling price per unit $ 1,950
Variable selling and administrative expenses (per unit) $ 75
Fixed selling and administrative expenses (per year) $ 105,000 Cost per unit $ 1,575
Interest expense for the year $ 14,000 Variable selling and administrative expenses (per unit) $ 75
Fixed selling and administrative expenses (per year) $ 105,000
Interest expense for the year $ 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 "$" sign in your response.)
Required:
Gig Harbor Boating Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts
Budgeted Income Statement as positive values. Omit the "$" sign in your response.)
Interest expense (0%) $ 1 (0%)
Selling and administrative expenses (0%) 1 (0%) Gig Harbor Boating
Gross profit (7%) 1 (0%) Budgeted Income Statement
Notes payable (0%) 1 (0%) Sales $ 897,000
Net operating loss (0%) 1 (0%) Cost of goods sold 724,500
Notes payable (0%) 1 (0%)
Gross profit 172,500
Net loss (0%) $ 1 (0%)
Selling and administrative expenses 139,500
Net operating income 33,000
Interest expense 14,000
Net income $ 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%
Feedback:
Sales (460 units × $1,950 per unit) = $897,000
Cost of goods sold (460 units × $1,575 per unit) = $724,500
Selling and administrative expenses (460 units × $75 per unit) + $105,000 = $139,500.
Exercise 9-9 Budgeted Balance Sheet [LO10] 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 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: in preparing its budgeted balance sheet for next year:
Ending
Ending
Balances
Balances
Cash ?
Accounts receivable $ 8,100 Cash ?
Supplies inventory $ 3,200 Accounts receivable $ 8,100
Equipment $ 34,000 Supplies inventory $ 3,200
Accumulated depreciation $ 16,000 Equipment $ 34,000
Accounts payable $ 1,800 Accumulated depreciation $ 16,000
Common stock $ 5,000 Accounts payable $ 1,800
Retained earnings ? Common stock $ 5,000
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.
The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted
Required: to be $4,800.
Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the
"$" sign in your response.) Required:
Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the
Mecca Copy "$" sign in your response.)
Budgeted Balance Sheet
Assets Liabilities and Stockholders' Equity
Current assets: Current liabilities: Mecca Copy
Cash (5%) $ 1 (0%) Accounts payable (5%) Budgeted Balance Sheet
Common stock (0%) 1 (0%) Stockholders' equity: Assets Liabilities and Stockholders' Equity
Retained earnings (0%) 1 (0%) Supplies inventory (0%) Current assets: Current liabilities:
Total current assets $ 1 (0%) Equipment (0%) Cash $ 12,200 Accounts payable
Plant and equipment: Total stockholders' equity Accounts receivable 8,100 Stockholders' equity:
Building (0%) 1 (0%) Supplies inventory 3,200 Common stock
Retained earnings (0%) 1 (0%)
Total current assets $ 23,500 Retained earnings
Plant and equipment, net 1 (0%)
Total assets $ 1 (0%) Total liabilities and stockholders' equity Plant and equipment: Total stockholders' equity
Equipment 34,000
Accumulated depreciation -16,000
Plant and equipment, net 18,000
Total assets $ 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%
Feedback:
Cash: Plug figure.
Retained earnings, beginning balance $ 28,000

Add net income 11,500
39,500
Deduct dividends 4,800
Retained earnings, ending balance $ 34,700

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
Exercise 9-10 Cash Budget Analysis [LO8] of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars.
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other
of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars. amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your
Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other response.)
amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your
response.)
Quarter
Quarter 1 2 3
1 2 3
Cash balance, 4
beginning Year $ 6 $ 5 $ 5 $
Cash balance, beginning $ 6 $ 1 (0%) Add 1 (0%) from
$ collections $ 1 customers
(0%) $ 1 (0%) 65 70 96
Add collections from customers 1 (0%) 1 (0%) 96 1 (0%) 323
Total cash available 71 75 101
Total cash available 71 1 (0%) 1 (0%) 1 (0%) 1 (0%)
Less disbursements: Less disbursements:
Purchases of inventory 35 45 Purchases
1 (0%) of inventory35 1 (0%) 35 45 48
Operating expenses 1 (0%) 30 Operating 1 (0%)
30 expenses 113 28 30 30
Equipment purchases 8 8 Equipment 1 (0%)
10 purchases 36 8 8 10
Dividends 2 2 Dividends2 2 1 (0%) 2 2 2
Total disbursements 1 (0%) 85 1 (0%) 1 (0%) 1 (0%)
Total disbursements 73 85 90
Excess (deficiency) of cash available over disbursements -2 1 (0%) 11 1 (0%) 1 (0%)
Excess (deficiency) of cash available over disbursements -2 -10 11
Financing:
Borrowings 1 (0%) 15 Financing:
1 (0%) 1 (0%) 1 (0%)
Repayments (including interest)* 1 (0%) 1 (0%) Borrowings
1 (0%) -17 1 (0%) 7 15 0
Total financing 1 (0%) 1 (0%) 1 (0%) (including
Repayments 1 (0%)interest)*
1 (0%) 0 0 -6
Cash balance, ending $ 1 (0%) 1 (0%) Total
$ 1financing
(0%) $ 1 (0%) $ 1 (0%) 7 15 -6
Cash balance, ending $ 5 5 $ 5 $
*Interest will total $1,000 for the year.
*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%
Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4] Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4]
The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year: The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year:
The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending 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 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. 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 In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 pounds and the beginning
accounts payable for the first quarter is budgeted to be $14,820. accounts 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 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 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 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. 25% in the following quarter.
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.) Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Gaeber Industries Gaeber Industries

Production Budget Production Budget
Budgeted unit sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) Budgeted unit sales 8,000 7,000 6,000 7,000
Add desired ending inventory 1 (0%) 1 (0%) 1 (0%) 1 (0%) Add desired ending inventory 1,400 1,200 1,400 1,700
Total units needed 1 (0%) 1 (0%) 1 (0%) 1 (0%) Total units needed 9,400 8,200 7,400 8,700
Less beginning inventory 1 (0%) 1 (0%) 1 (0%) 1 (0%) Less beginning inventory 1,600 1,400 1,200 1,400
Required production 1 (0%) 1 (0%) 1 (0%) 1 (0%) Required production 7,800 6,800 6,200 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%
(a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your (a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your

Direct Materials Budget Direct Materials Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Production needs 1 (0%) 1 (0%) 1 (0%) 1 (0%)
Production needs 1 (0%) 15,600 13,600 12,400 14,600
Add desired ending inventory 1 (0%) 1 (0%) 1 (0%) 1 (0%)ending inventory
Add desired 1 (0%) 2,720 2,480 2,920 3,140
Total needs 1 (0%) 1 (0%) 1 (0%) Total 1needs
(0%) 1 (0%) 18,320 16,080 15,320 17,740
Less beginning inventory 1 (0%) 1 (0%) 1 (0%) Less 1 (0%) inventory 1 (0%)
beginning 3,120 2,720 2,480 2,920
Raw materials to be purchased 1 (0%) 1 (0%) 1 (0%) 1 (0%) to be purchased
Raw materials 1 (0%) 15,200 13,360 12,840 14,820
Cost of raw materials to be purchased $ 1 (0%) $ 1 (0%) $ 1 (0%) 1 raw
$ Cost of (0%)materials 1 purchased
$ to be (0%) $ 60,800 $ 53,440 $ 51,360 $ 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%
Feedback:
1st 2nd 3rd 4th
Required production 7,800 6,800 6,200 7,300 28,100
Raw materials per unit ×2 ×2 ×2 ×2 ×2
Production needs 15,600 13,600 12,400 14,600 56,200
(b) Prepare the schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. (Leave (b) Prepare the schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. (Leave
no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Schedule of Expected Cash Disbursements for Materials Schedule of Expected Cash Disbursements for Materials
st
1 Quarter 2nd Quarter 3rd Quarter th
4 Quarter Year st
1 Quarter 2nd Quarter 3rd Quarter 4th Quarter
Accounts payable, beginning balance $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)
Accounts payable, 1 (0%)
$ beginning balance $ 14,820 $ 0 $ 0 $ 0
1st Quarter purchases 1 (0%) 1 (0%) 1 (0%) 1st Quarter
1 (0%)purchases 1 (0%) 45,600 15,200 0 0
2nd Quarter purchases 1 (0%) 1 (0%) 1 (0%) 2nd Quarter
1 (0%) purchases 1 (0%) 0 40,080 13,360 0
3rd purchases 1 (0%) 1 (0%) 1 (0%) 3rd purchases
1 (0%) 1 (0%) 0 0 38,520 12,840
4th Quarter purchases 1 (0%) 1 (0%) 1 (0%) 4th Quarter
1 (0%)purchases 1 (0%) 0 0 0 44,460
Total cash disbursements for materials $ 1 (0%) $ 1 (0%) $ 1 (0%) $ Total 1cash
(0%)
disbursements
$ 1for(0%)
materials $ 60,420 $ 55,280 $ 51,880 $ 57,300
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%
Exercise 9-14 Direct Labor and Manufacturing Overhead Budgets [LO5, LO6] 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 The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter
for the upcoming fiscal year: for the upcoming fiscal year:
Units to be produced 12,000 14,000 13,000 11,000 Units to be produced 12,000 14,000 13,000 11,000
Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour. 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 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. $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.
Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted
each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$"
sign in your response.) sign in your response.)
Raredon Corporation Raredon Corporation

Direct Labor Budget Direct Labor Budget
1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter 4th quarter
Total direct labor-hours needed 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) needed
Total direct labor-hours 8,400 9,800 9,100 7,700 35,000
Total direct labor cost $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)
Total $ 1 (0%)
direct labor cost $ 88,200 $ 102,900 $ 95,550 $ 80,850 $ 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%
Feedback:
Raredon Corporation
Direct Labor Budget
1st 3rd 4th
Year
quarter 2nd quarter quarter quarter
Units to be produced 12,000 14,000 13,000 11,000 50,000
Direct labor time per unit (hours) ×0.70 ×0.70 ×0.70 ×0.70 ×0.70
Total direct labor-hours needed 8,400 9,800 9,100 7,700 35,000
Direct labor cost per hour $ 10.50 $ 10.50 $ 10.50 $ 10.50 $ 10.50
Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.) Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.)
Raredon Corporation Raredon Corporation

Manufacturing Overhead Budget Manufacturing Overhead Budget
1st quarter 2nd quarter 3rd quarter 4th quarter Year 1st quarter 2nd quarter 3rd quarter 4th quarter Year
Variable manufacturing overhead $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 Variable
(0%) manufacturing
$ 1 (0%)overhead $ 12,600 $ 14,700 $ 13,650 $ 11,550 $ 52,50
Fixed manufacturing overhead 1 (0%) 1 (0%) 1 (0%) 1 Fixed
(0%) manufacturing
1 (0%)
overhead 80,000 80,000 80,000 80,000 320,00
Total manufacturing overhead 1 (0%) 1 (0%) 1 (0%) 1 Total
(0%) manufacturing
1 (0%)
overhead 92,600 94,700 93,650 91,550 372,50
Cash disbursements for Cash disbursements for
manufacturing overhead $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)manufacturing
$ 1overhead
(0%) $ 70,600 $ 72,700 $ 71,650 $ 69,550 $ 284,50
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%
Feedback:
Raredon Corporation
Manufacturing Overhead Budget
1st 2nd 3rd 4th
Year
quarter quarter quarter quarter
Budgeted direct labor-hours 8,400 9,800 9,100 7,700 35,000
Variable overhead rate $ ×1.50 $ ×1.50 $ ×1.50 $ ×1.50 $ ×1.50
Variable manufacturing overhead $ 12,600 $ 14,700 $ 13,650 $ 11,550 $ 52,500
Fixed manufacturing overhead 80,600 80,000 80,000 80,000 320,000
Total manufacturing overhead 92,600 94,700 93,650 91,550 372,500
Less depreciation 22,000 22,000 22,000 22,000 88,000
Cash disbursements for $ 70,600 $ 72,700 $ 71,650 $ 69,550 $ 284,500
manufacturing overhead
Exercise 9-12 Sales and Production Budgets [LO2, LO3] Exercise 9-12 Sales and Production Budgets [LO2, LO3]
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales
are on account): are on account):
The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in 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 which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning
balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200. balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200.
The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending
finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods
inventory for the fourth quarter is 1,850 units. inventory for the fourth quarter is 1,850 units.
(a) Calculate the company's total sales. (Omit the "$" sign in your response.) (a) Calculate the company's total sales. (Omit the "$" sign in your response.)
Total sales $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) Total sales $ 198,000 $ 216,000 $ 252,000 $ 234,000
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%

Feedback:
Jessi Corporation
Sales Budget
1st 2nd 3rd 4th
Budgeted unit sales 11,000 12,000 14,000 13,000 50,000
Selling price per unit × $18.00 × $18.00 × $18.00 × $18.00 × $18.00
Total sales $ 198,000 $ 216,000 $ 252,000 $ 234,000 $ 900,000

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

Schedule of Expected Cash Collections Schedule of Expected Cash Collections
st
1 Quarter 2nd Quarter rd
3 Quarter th
4 Quarter Year st
1 Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Accounts receivable, beginning balance $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)
Accounts receivable, beginning balance $ 70,200 $ 0 $ 0 $ 0 $ 70,200
1st Quarter sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1st Quarter
1 (0%)sales 128,700 59,400 0 0 188,100
2nd Quarter sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) 2nd Quarter
1 (0%) sales 0 140,400 64,800 0 205,200
3rd Quarter sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) rd
1 (0%)
3 Quarter sales 0 0 163,800 75,600 239,400
4th Quarter sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) 4th Quarter
1 (0%)sales 0 0 0 152,100 152,100
Total cash collections $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1cash
Total (0%)
collections $ 198,900 $ 199,800 $ 228,600 $ 227,700 $ 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%
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.) Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Jessi Corporation Jessi Corporation

Production Budget Production Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Budgeted unit sales 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)unit sales
Budgeted 11,000 12,000 14,000 13,000 50,000
Add desired ending inventory 1 (0%) 1 (0%) 1 (0%) 1 (0%) Add1desired
(0%) ending inventory 1,800 2,100 1,950 1,850 1,850
Total units needed 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 units
Total (0%)needed 12,800 14,100 15,950 14,850 51,850
Less beginning inventory 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 beginning
Less (0%) inventory 1,650 1,800 2,100 1,950 1,650
Required production 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)
Required production 11,150 12,300 13,850 12,900 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%
Exercise 10-1 Prepare a Flexible Budget [LO1] 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 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: area. The company's planning budget for May appears below:
Puget Sound Divers
Planning Budget Puget Sound Divers
For the Month Ended May 31 Planning Budget
Budgeted diving-hours (q) 100 For the Month Ended May 31
Revenue ($365.00q) $ 36,500 Budgeted diving-hours (q) 100
Expenses: Revenue ($365.00q) $ 36,500
Wages and salaries ($8,000 + $125.00q) 20,500
Supplies ($3.00q) 300 Expenses:
Equipment rental ($1,800 + $32.00q) 5,000 Wages and salaries ($8,000 + $125.00q) 20,500
Insurance ($3,400) 3,400 Supplies ($3.00q) 300
Miscellaneous ($630 + $1.80q) 810 Equipment rental ($1,800 + $32.00q) 5,000
Total expense 30,010 Insurance ($3,400) 3,400
Net operating income $ 6,490 Miscellaneous ($630 + $1.80q) 810
Total expense 30,010
Net operating income $ 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 "$" sign in your response.)
Required:
Puget Sound Divers
During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity. (Input all
Flexible Budget
amounts as positive values. Omit the "$" sign in your response.)
For the Month Ended May 31
Revenue $ 1 (0%)
Expenses: Puget Sound Divers
Wages and salaries 1 (0%) Flexible Budget
Supplies 1 (0%) For the Month Ended May 31
Equipment rental 1 (0%) Revenue $ 38,325
Insurance 1 (0%) Expenses:
Miscellaneous 1 (0%) Wages and salaries 21,125
Total expense 1 (0%) Supplies 315
Net operating income $ 1 (0%) Equipment rental 5,160
Insurance 3,400
Miscellaneous 819
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%
Feedback:
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

Exercise 10-2 Prepare a Report Showing Activity Variances [LO2] 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 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: planning budget for July appears below:
Flight Café
Flight Café
Planning Budget
Planning Budget
For the Month Ended July 31
Budgeted meals (q) 18,000
Revenue ($4.50q) $ 81,000 Budgeted meals (q) 18,000
Raw materials ($2.40q) 43,200 Expenses:
Wages and salaries ($5,200 + $0.30q) 10,600 Raw materials ($2.40q) 43,200
Utilities ($2,400 + $0.05q) 3,300 Wages and salaries ($5,200 + $0.30q) 10,600
Facility rent ($4,300) 4,300
Utilities ($2,400 + $0.05q) 3,300
Insurance ($2,300) 2,300
Miscellaneous ($680 + $0.10q) 2,480 Facility rent ($4,300) 4,300
Total expense 66,180 Insurance ($2,300) 2,300
Net operating income $ 14,820 Miscellaneous ($680 + $0.10q) 2,480
In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below:
Flight Café
Flexible Budget In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below:
Budgeted meals (q) 17,800 Flight Café
Revenue ($4.50q) $ 80,100 Flexible Budget
Expenses: For the Month Ended July 31
Raw materials ($2.40q) 42,720 Budgeted meals (q) 17,800
Wages and salaries ($5,200 + $0.30q) 10,540 Revenue ($4.50q) $ 80,100
Utilities ($2,400 + $0.05q) 3,290
Facility rent ($4,300) 4,300 Expenses:
Insurance ($2,300) 2,300 Raw materials ($2.40q) 42,720
Miscellaneous ($680 + $0.10q) 2,460 Wages and salaries ($5,200 + $0.30q) 10,540
Total expense 65,610 Utilities ($2,400 + $0.05q) 3,290
Net operating income $ 14,490 Facility rent ($4,300) 4,300
Insurance ($2,300) 2,300
Miscellaneous ($680 + $0.10q) 2,460
Required: Total expense 65,610
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" Net operating income $ 14,490
for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Flight Café Required:

Activity Variances
For the Month Ended July 31 Prepare a report showing the company's activity variances for July. (Leave no cells blank - be certain to enter "0" wherever
Activity Variances required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U"
Revenue $ 1 (0%) U (6%) for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Expenses:
Raw materials 1 (0%) F (6%) Flight Café
Wages and salaries 1 (0%) None (0%) Activity Variances
Utilities 1 (0%) None (0%) For the Month Ended July 31
Facility rent 1 (0%) None (6%) Activity Variances
Insurance 1 (0%) None (6%) Revenue $ 900 U
Miscellaneous 1 (0%) F (6%) Expenses:
Total expense 1 (0%) U (0%) Raw materials 480 F
Net operating income $ 1 (0%) U (6%) Wages and salaries 60 F
Utilities 10 F
Facility rent 0 None
Insurance 0 None
Miscellaneous 20 F
Total expense 570 F
Net operating income $ 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%
Feedback:
Flight Café
Activity Variances
Planning Flexible
Budget Budget Activity Variances
Meals 18,000 17,800
Revenue ($4.50q) $ 81,000 $ 80,100 $ 900 U
Expenses:
Raw materials ($2.40q) 43,200 42,720 480 F
Wages and salaries ($5,200 + $0.30q) 10,600 10,540 60 F
Utilities ($2,400 + $0.05q) 3,300 3,290 10 F
Facility rent ($4,300) 4,300 4,300 0 None
Insurance ($2,300) 2,300 2,300 0 None
Miscellaneous ($680 + $0.10q) 2,480 2,460 20 F
Total expense 66,180 65,610 570 F
Net operating income $ 14,820 $ 14,490 $ 330 U
Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3] 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 Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters
August. The company's flexible budget for August appears below: in August. The company's flexible budget for August appears below:
Quilcene Oysteria
Flexible Budget Quilcene Oysteria
For the Month Ended August 31 Flexible Budget
Actual pounds (q) 8,000 For the Month Ended August 31
Revenue ($4.00q) $ 32,000 Actual pounds (q) 8,000
Packing supplies ($0.50q) 4,000 Expenses:
Oyster bed maintenance ($3,200) 3,200 Packing supplies ($0.50q) 4,000
Wages and salaries ($2,900 +$0.30q) 5,300 Oyster bed maintenance ($3,200) 3,200
Shipping ($0.80q) 6,400
Utilities ($830) 830 Wages and salaries ($2,900 +$0.30q) 5,300
Other ($450 + $0.05q) 850 Shipping ($0.80q) 6,400
Total expense 20,580 Utilities ($830) 830
Net operating income $ 11,420 Other ($450 + $0.05q) 850
The actual results for August appear below:
Quilcene Oysteria
Income Statement The actual results for August appear below:
For the Month Ended August 31
Actual pounds 8,000 Quilcene Oysteria
Revenue $ 35,200 Income Statement
Expenses: For the Month Ended August 31
Packing supplies 4,200 Actual pounds 8,000
Oyster bed maintenance 3,100 Revenue $ 35,200
Wages and salaries 5,640
Shipping 6,950 Expenses:
Utilities 810 Packing supplies 4,200
Other 980 Oyster bed maintenance 3,100
Total expense 21,680 Wages and salaries 5,640
Net operating income $ 13,520 Shipping 6,950
Utilities 810
Other 980
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., Net operating income $ 13,520
zero variance). Omit the "$" sign in your response.)
Quilcene Oysteria
Required:
Revenue and Spending Variances
For the Month Ended August 31 Prepare a report showing the company's revenue and spending variances for August. (Input all amounts as positive values.
Revenue and Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
Spending Variances zero variance). Omit the "$" sign in your response.)
Revenue $ 1 (0%) F (6%)
Expenses: Quilcene Oysteria
Packing supplies 1 (0%) F (0%) Revenue and Spending Variances
Oyster bed maintenance 1 (0%) U (0%) For the Month Ended August 31
Wages and salaries 1 (0%) None (0%) Revenue and
Shipping 1 (0%) F (0%) Spending Variances
Utilities 1 (0%) None (0%) Revenue $ 3,200 F
Other 1 (0%) U (6%)
Expenses:
Total expense 1 (0%) U (6%)
Packing supplies 200 U
Net operating income $ 1 (0%) F (6%)
Oyster bed maintenance 100 F
Wages and salaries 340 U
Shipping 550 U
Utilities 20 F
Other 130 U
Total expense 1,100 U
Net operating income $ 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%
Feedback:
Quilcene Oysteria
Flexible Actual Revenue and
Budget Result Spending Variances
Pounds 8,000 8,000
Revenue ($4.00q) $ 32,000 $ 35,200 $ 3,200 F
Expenses:
Packing supplies ($0.50q) 4,000 4,200 200 U
Oyster bed maintenance ($3,200) 3,200 3,100 100 F
Wages and salaries ($2,900 + $0.30q) 5,300 5,640 340 U
Shipping ($0.80q) 6,400 6,950 550 U
Utilities ($830) 830 810 20 F
Other ($450 + $0.05q) 850 980 130 U
Total expense 20,580 21,680 1,100 U
Net operating income $ 11,420 $ 13,520 $ 2,100 F
Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4] 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. Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in
Data concerning the company's operations in July appear below: 1982. Data concerning the company's operations in July appear below:
Vulcan Flyovers
Operating Data Vulcan Flyovers
For the Month Ended July 31 Operating Data
Planning Flexible Actual For the Month Ended July 31
Budget Budget Budget Planning Flexible Actual
Flights (q) 50 48 48 Budget Budget Budget
Revenue ($320.00q) $ 16,000 $ 15,360 $ 13,650 Flights (q) 50 48 48
Expenses: Revenue ($320.00q) $ 16,000 $ 15,360 $ 13,650
Wages and salaries ($4,000 + $82.00q) 8,100 7,936 8,430
Expenses:
Fuel ($23.00q) 1,150 1,104 1,260
Airport fees ($650 + $38.00q) 2,550 2,474 2,350 Wages and salaries ($4,000 + $82.00q) 8,100 7,936 8,430
Aircraft depreciation ($7.00q) 350 336 336 Fuel ($23.00q) 1,150 1,104 1,260
Office expenses ($190 + $2.00q) 290 286 460 Airport fees ($650 + $38.00q) 2,550 2,474 2,350
Total expense 12,440 12,136 12,836 Aircraft depreciation ($7.00q) 350 336 336
Net operating income $ 3,560 $ 3,224 $ 814 Office expenses ($190 + $2.00q) 290 286 460
Total expense 12,440 12,136 12,836
Net operating income $ 3,560 $ 3,224 $ 814
The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane
for an overflight at a discount.
Required: The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane
Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be for an overflight at a discount.
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 "$" sign in your response.) Required:
Vulcan Flyovers Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be
Flexible Budget Performance Report certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for
For the Month Ended July 31 unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Activity Variances Revenue and Spending Variances
Revenue $ 1 (0%) None (0%) $ 1 (0%) None (0%) Vulcan Flyovers
Expenses: Flexible Budget Performance Report
Wages and salaries 1 (0%) U (0%) 1 (0%) None (0%) For the Month Ended July 31
Fuel 1 (0%) U (0%) 1 (0%) U (3%) Activity Variances Revenue and Spending Variances
Airport fees 1 (0%) F (3%) 1 (0%) U (0%) Revenue $ 640 U $ 1,710 U
Aircraft depreciation 1 (0%) U (0%) 1 (0%) U (0%) Expenses:
Office expenses 1 (0%) F (3%) 1 (0%) None (0%)
Wages and salaries 164 F 494 U
Total expense 1 (0%) U (0%) 1 (0%) F (0%)
Fuel 46 F 156 U
Net operating income $ 1 (0%) U (3%) $ 1 (0%) F (0%)
Airport fees 76 F 124 F
Aircraft depreciation 14 F 0 None
Office expenses 4 F 174 U
Total expense 304 F 700 U
Net operating income $ 336 U $ 2,410 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%
Feedback:
Vulcan Flyovers
Flexible Budget Performance Report
Revenue and
Planning Activity Flexible Spending Actual
Budget Variances Budget Variances Results
Flights (q) 50 48 48
Revenue ($320.00q) $ 16,000 $ 640 U $ 15,360 $ 1,710 U $ 13,650
Expenses:
Wages and salaries
($4,000 + $82.00q) 8,100 164 F 7,936 494 U 8,430
Fuel ($23.00q) 1,150 46 F 1,104 156 U 1,260
Airport fees ($650 + $38.00q) 2,550 76 F 2,474 124 F 2,350
Aircraft depreciation ($7.00q) 350 14 F 336 0 None 336
Office expenses ($190 + $2.00q) 290 4 F 286 174 U 460
Total expense 12,440 304 F 12,136 700 U 12,836
Net operating income $ 3,560 $ 336 U $ 3,224 $ 2,410 U $ 814
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
Exercise 10-5 Prepare a Flexible Budget with More Than One Cost Driver [LO5] cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to
cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The 80 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80
passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
Fixed Cost Cost per Cost per
Fixed Cost Cost per Cost per Per Month Cruise Passenger
Per Month Cruise Passenger Vessel operating costs $ 5,200 $ 480.00 $ 2.00
Vessel operating costs $ 5,200 $ 480.00 $2.00 Advertising $ 1,700
Advertising $ 1,700 Administrative costs $ 4,300 $ 24.00 $ 1.00
Administrative costs $ 4,300 $ 24.00 $1.00 Insurance $ 2,900
Insurance $ 2,900
For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's
sales should average $25 per passenger. The company's planning budget for July is based on 24 cruises and 1,400 sales should average $25 per passenger. The company's planning budget for July is based on 24 cruises and 1,400
passengers. passengers.
Required: Required:
Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your
Alyeski Tours
Planning Budget Alyeski Tours
For the Month Ended July 31 Planning Budget
Revenue $ 1 (0%) For the Month Ended July 31
Expenses: Revenue $ 35,000
Vessel operating costs 1 (0%) Expenses:
Advertising 1 (0%) Vessel operating costs 19,520
Administrative costs 1 (0%) Advertising 1,700
Insurance 1 (0%)
Administrative costs 6,276
Total expense 1 (0%)
Insurance 2,900
Net operating income $ 1 (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%

Feedback:
Revenue ($25.00 × 1,400) = $35,000
Vessel operating costs ($5,200 + ($480.00 × 24) + ($2.00 × 1,400)) = $19,520
Administrative 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
Exercise 10-8 Flexible Budget [LO1] table provides data concerning the company's costs:
table provides data concerning the company's costs: Fixed Cost Cost per
Per Month Car Washed
Fixed Cost Cost per Cleaning supplies $ 0.80
Per Month Car Washed
Electricity $ 1,200 $ 0.15
Cleaning supplies $ 0.80
Electricity $ 1,200 $ 0.15 Maintenance $ 0.20
Maintenance $ 0.20 Wages and salaries $ 5,000 $ 0.30
Wages and salaries $ 5,000 $ 0.30 Depreciation $ 6,000
Depreciation $ 6,000 Rent $ 8,000
Rent $ 8,000 Administrative expenses $ 4,000 $ 0.10
Administrative expenses $ 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 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. August and to collect an average of $4.90 per car washed.
Required: Required:
Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your
Lavage Rapide
Planning Budget Lavage Rapide
For the Month Ended August 31 Planning Budget
Revenue $ 1 (0%) For the Month Ended August 31
Expenses: Revenue $ 44,100
Cleaning supplies 1 (0%) Expenses:
Electricity 1 (0%) Cleaning supplies 7,200
Maintenance 1 (0%) Electricity 2,550
Wages and salaries 1 (0%)
Maintenance 1,800
Depreciation 1 (0%)
Rent 1 (0%) Wages and salaries 7,700
Administrative expenses 1 (0%) Depreciation 6,000
Total expense 1 (0%) Rent 8,000
Net operating income $ 1 (0%) Administrative expenses 4,900
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%
Feedback:
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
Administrative expenses ($4,000 + ($0.10 × 9,000)) = $4,900
Exercise 10-9 Flexible Budget [LO1] 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 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: table provides data concerning the company's costs:
Fixed Cost Cost per
Per Month Car Washed Fixed Cost Cost per
Cleaning supplies $ 0.80 Per Month Car Washed
Electricity $ 1,200 $ 0.15 Cleaning supplies $ 0.80
Maintenance $ 0.20 Electricity $ 1,200 $ 0.15
Wages and salaries $ 5,000 $ 0.30 Maintenance $ 0.20
Depreciation $ 6,000 Wages and salaries $ 5,000 $ 0.30
Rent $ 8,000
Depreciation $ 6,000
Rent $ 8,000
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.
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company actually washed 8,800 cars in
Required: August and to collect an average of $4.90 per car washed.
Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Required:
Lavage Rapide Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your
Flexible Budget response.)
Revenue $ 1 (0%) Lavage Rapide
Expenses: Flexible Budget
Cleaning supplies 1 (0%) For the Month Ended August 31
Electricity 1 (0%) Revenue $ 43,120
Maintenance 1 (0%)
Expenses:
Wages and salaries 1 (0%)
Depreciation 1 (0%) Cleaning supplies 7,040
Rent 1 (0%) Electricity 2,520
Administrative expenses 1 (0%) Maintenance 1,760
Total expense 1 (0%) Wages and salaries 7,640
Net operating income $ 1 (0%) Depreciation 6,000
Rent 8,000
Administrative expenses 4,880
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%
Feedback:
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
Administrative expenses ($4,000 + ($0.10 × 8,800)) = $4,880
Exercise 10-10 Prepare a Report Showing Activity Variances [LO2] 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 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: table provides data concerning the company's costs:
Fixed Cost Cost per
Wages and salaries $ 5,000 $ 0.30 Maintenance $ 0.20
Wages and salaries $ 5,000 $ 0.30
Rent $ 8,000
Administrative expenses $ 4,000 $ 0.10 Depreciation $ 6,000
Rent $ 8,000
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
The actual operating results for August appears below. For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
Lavage Rapide
Income Statement The actual operating results for August appears below.
Actual cars washed 8,800 Lavage Rapide
Cleaning supplies 7,560 Actual cars washed 8,800
Electricity 2,670 Revenue $ 43,080
Maintenance 2,260
Expenses:
Wages and salaries 8,500
Depreciation 6,000 Cleaning supplies 7,560
Rent 8,000 Electricity 2,670
Administrative expenses 4,950 Maintenance 2,260
Net operating income $ 3,140 Depreciation 6,000
Rent 8,000
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 Net operating income $ 3,140
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Required:
Activity Variances
For the Month Ended August 31 Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0"
Activity Variances wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for
Revenue $ 1 (0%) U (5%) favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Expenses:
Cleaning supplies 1 (0%) None (0%) Lavage Rapide
Electricity 1 (0%) None (0%) Activity Variances
Maintenance 1 (0%) U (0%) For the Month Ended August 31
Wages and salaries 1 (0%) U (0%) Activity Variances
Depreciation 1 (0%) F (0%) Revenue $ 980 U
Rent 1 (0%) U (0%)
Expenses:
Administrative expenses 1 (0%) U (0%)
Total expense 1 (0%) U (0%) Cleaning supplies 160 F
Net operating income $ 1 (0%) U (5%) Electricity 30 F
Maintenance 40 F
Wages and salaries 60 F
Depreciation 0 None
Rent 0 None
Administrative expenses 20 F
Total expense 310 F
Net operating income $ 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%
Feedback:
Lavage Rapide
Activity Variances
Planning Flexible
Budget Budget Activity Variances
Cars washed (q) 9,000 8,800
Revenue ($4.90q) $ 44,100 $ 43,120 $ 980 U
Expenses:
Cleaning supplies ($0.80q) 7,200 7,040 160 F
Electricity ($1,200 + $0.15q) 2,550 2,520 30 F
Maintenance ($0.20q) 1,800 1,760 40 F
Wages and salaries ($5,000 + $0.30q) 7,700 7,640 60 F
Depreciation ($6,000) 6,000 6,000 0 None
Rent ($8,000) 8,000 8,000 0 None
Administrative expenses
($4,000 + $0.10q) 4,900 4,880 20 F
Total expense 38,150 37,840 310 F
Net operating income $ 5,950 $ 5,280 $ 670 U
Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3]
Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3]
table provides data concerning the company's costs: 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 Cost per
Maintenance $ 0.20
Electricity $ 1,200 $ 0.15
Depreciation $ 6,000 Maintenance $ 0.20
Rent $ 8,000 Wages and salaries $ 5,000 $ 0.30
Rent $ 8,000
The actual operating results for August appears below.
Lavage Rapide August and to collect an average of $4.90 per car washed.
Electricity 2,670
Revenue $ 43,080
Maintenance 2,260
Wages and salaries 8,500 Expenses:
Rent 8,000
Required:
Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to Total expense 39,940
enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" Net operating income $ 3,140
for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Revenue and Spending Variances Required:
For the Month Ended August 31 Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to
Revenue and Spending enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F"
Variances for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Revenue $ 1 (0%) U (5%)
Expenses:
Lavage Rapide
Cleaning supplies 1 (0%) F (0%)
Electricity 1 (0%) None (0%)
Maintenance 1 (0%) U (5%)
Wages and salaries 1 (0%) None (0%) Revenue and Spending
Depreciation 1 (0%) F (0%) Variances
Rent 1 (0%) None (5%) Revenue $ 40 U
Administrative expenses 1 (0%) None (0%) Expenses:
Total expense 1 (0%) U (5%) Cleaning supplies 520 U
Net operating income $ 1 (0%) F (0%) Electricity 150 U
Maintenance 500 U
Wages and salaries 860 U
Depreciation 0 None
Rent 0 None
Administrative expenses 70 U
Net operating income $ 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%
Feedback:
Lavage Rapide
Flexible Actual Revenue and
Budget Results Spending Variances
Cars washed (q) 8,800 8,800
Revenue ($4.90q) $ 43,120 $ 43,080 $ 40 U
Expenses:
Cleaning supplies ($0.80q) 7,040 7,560 520 U
Electricity ($1,200 + $0.15q) 2,520 2,670 150 U
Maintenance ($0.20q) 1,760 2,260 500 U
Wages and salaries
($5,000 + $0.30q) 7,640 8,500 860 U
Depreciation ($6,000) 6,000 6,000 0 None
Rent ($8,000) 8,000 8,000 0 None
($4,000 + $0.10q) 4,880 4,950 70 U
Total expense 37,840 39,940 2,100 U
Net operating income $ 5,280 $ 3,140 $ 2,140 U
Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4] Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4]
Fixed Cost Cost per Car
Per Month Washed Fixed Cost Cost per Car
Cleaning supplies $ 0.80 Per Month Washed
Maintenance $ 0.20
Rent $ 8,000 Wages and salaries $ 5,000 $ 0.30
Rent $ 8,000
The actual operating results for August appears below.
Lavage Rapide August and to collect an average of $4.90 per car washed.
Electricity 2,670 Revenue $ 43,080
Maintenance 2,260
Wages and salaries 8,500 Expenses:
Rent 8,000
Required:
Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances Total expense 39,940
for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Net operating income $ 3,140
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 Required:

Flexible Budget Performance Report Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances
For the Month Ended August 31 for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required.
Activity Variances Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
Revenue $ 1 (0%) F (0%) $ 1 (0%) F (0%) zero variance). Omit the "$" sign in your response.)
Expenses:
Cleaning supplies 1 (0%) F (3%) 1 (0%) U (3%) Lavage Rapide
Electricity 1 (0%) F (3%) 1 (0%) U (3%) Flexible Budget Performance Report
Maintenance 1 (0%) U (0%) 1 (0%) None (0%) For the Month Ended August 31
Wages and salaries 1 (0%) F (3%) 1 (0%) U (3%) Activity Variances Revenue and Spending Variances
Depreciation 1 (0%) F (0%) 1 (0%) U (0%)
Revenue $ 980 U $ 40 U
Rent 1 (0%) None (3%) 1 (0%) F (0%)
Administrative expenses 1 (0%) F (3%) 1 (0%) U (3%) Expenses:
Total expense 1 (0%) None (0%) 1 (0%) None (0%) Cleaning supplies 160 F 520 U
Net operating income $ 1 (0%) U (3%) $ 1 (0%) None (0%) Electricity 30 F 150 U
Maintenance 40 F 500 U
Wages and salaries 60 F 860 U
Depreciation 0 None 0 None
Rent 0 None 0 None
Administrative expenses 20 F 70 U
Total expense 310 F 2,100 U
Net operating income $ 670 U $ 2,140 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%
Feedback:
Lavage Rapide
Flexible Budget Performance Report
Revenue and
Planning Activity Flexible Spending Actual
Budget Variances Budget Variances Results
Cars washed (q) 9,000 8,800 8,800
Revenue ($4.90q) $ 44,100 $ 980 U $ 43,120 $ 40 U $ 43,080
Expenses:
Cleaning supplies ($0.80q) 7,200 160 F 7,040 520 U 7,560
Electricity ($1,200 + $0.15q) 2,550 30 F 2,520 150 U 2,670
Maintenance ($0.20q) 1,800 40 F 1,760 500 U 2,260
Wages and salaries
($5,000 + $0.30q) 7,700 60 F 7,640 860 U 8,500
Depreciation ($6,000) 6,000 0 None 6,000 0 None 6,000
Rent ($8,000) 8,000 0 None 8,000 0 None 8,000
($4,000 + $0.10q) 4,900 20 F 4,880 70 U 4,950
Total expense 38,150 310 F 37,840 2,100 U 39,940
Net operating income $ 5,950 $ 670 U $ 5,280 $ 2,140 U $ 3,140


Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs: Fixed Cost Cost per
Fixed Cost Cost per Per Month Machine-Hour
Per Month Machine-Hour Direct materials $ 4.25
Direct materials $ 4.25 Direct labor $ 36,800
Direct labor $ 36,800 Supplies $ 0.30
Supplies $ 0.30 Utilities $ 1,400 $ 0.05
Utilities $ 1,400 $ 0.05 Depreciation $ 16,700
Insurance $ 12,700 Insurance $ 12,700
For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machine- For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machine-
hours in June. Note that the company's direct labor is a fixed cost. hours in June. Note that the company's direct labor is a fixed cost.
Required: Required:
Prepare the company's planning budget for manufacturing costs for June. (Omit the "$" sign in your response.) 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 Wyckam Manufacturing Inc.
For the Month Ended June 30 Planning Budget for Manufacturing Cost
Direct materials $ 1 (0%) For the Month Ended June 30
Direct labor 1 (0%) Direct materials $ 21,250
Supplies 1 (0%) Direct labor 36,800
Utilities 1 (0%) Supplies 1,500
Depreciation 1 (0%)
Utilities 1,650
Insurance 1 (0%)
Total manufacturing cost $ 1 (0%) Depreciation 16,700
Insurance 12,700
Total manufacturing cost $ 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%

Feedback:
Direct materials ($4.25 × 5,000) = $21,250
Supplies ($0.30 × 5,000) = 1,500
Utilities ($1,400 + ($0.05 × 5,000)) = 1,650

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: Fixed Cost Cost per
Per Month Repair-Hour
Fixed Cost Cost per Wages and salaries $ 23,200 $ 16.30
Per Month Repair-Hour
Parts and supplies $ 8.60
Parts and supplies $ 8.60 Equipment depreciation $ 1,600 $ 0.40
Equipment depreciation $ 1,600 $ 0.40 Truck operating expenses $ 6,400 $ 1.70
Truck operating expenses $ 6,400 $ 1.70 Rent $ 3,480
Rent $ 3,480 Administrative expenses $ 4,500 $ 0.80
For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repair-
For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repair-
hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required: Required:
Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F"
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
the "$" sign in your response.) Omit the "$" sign in your response.)
Jake's Roof Repair

Jake's Roof Repair
Activity Variances
Activity Variances
Activity Variances
Revenue $ 1 (0%) F (6%) Activity Variances
Expenses: Revenue $ 4,450 F
Wages and salaries 1 (0%) F (0%) Expenses:
Parts and supplies 1 (0%) U (6%) Wages and salaries 1,630 U
Equipment depreciation 1 (0%) None (0%) Parts and supplies 860 U
Truck operating expenses 1 (0%) U (6%)
Equipment depreciation 40 U
Rent 1 (0%) U (0%)
Administrative expenses 1 (0%) F (0%) Truck operating expenses 170 U
Total expense 1 (0%) None (0%) Rent 0 None
Net operating income $ 1 (0%) F (6%) Administrative expenses 80 U
Net operating income $ 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%
Feedback:
Jake's Roof Repair
Activity Variances
Planning Flexible Activity
Budget Budget Variances
Repair-hours (q) 2,800 2,900
Revenue ($44.50q) $ 124,600 $ 129,050 $ 4,450 F
Expenses:
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
Equipment depreciation
($1,600 + $0.40q) 2,720 2,760 40 U
Truck operating expenses
($6,400 + $1.70q) 11,160 11,330 170 U
Rent ($3,480) 3,480 3,480 0 None
($4,500 + $0.80q) 6,740 6,820 80 U
Total expense 117,020 119,800 2,780 U
Net operating income $ 7,580 $ 9,250 $ 1,670 F

CH 9 PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

CH 9 PDF

Hochgeladen von

Copyright:

Verfügbare Formate

Question 1: Score 0/4

Your response Correct response

April May June Total April May June Total

April May June Total April May June Total

$230,000 × 10% $ 23,000 $ 23,000

$260,000 × 70%, 10% 182,000 $ 26,000 208,000

$300,000 × 20%, 70%, 10% 60,000 210,000 $ 30,000 300,000

$500,000 × 20%, 70% 100,000 350,000 450,000

$200,000 × 20% 40,000 40,000

Your response Correct response

Accounts receivable $ 1 (0%) Accounts receivable $ 210,000

Total grade: 0.0×1/1 = 0%

From May sales: $500,000 × 10% $ 50,000

Question 2: Score 0/4

Your response Correct response

Total grade: 0.0×1/4 + 0.0×1/4 + 0.0×1/4 + 0.0×1/4 = 0% + 0% + 0% + 0%

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

Question 3: Score 0/4

Your response Correct response

Question 4: Score 0/4

Your response Correct response

Total direct Total

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%

1st 2nd 3rd 4th

Your response Correct response

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%

1st 2nd 3rd 4th

Question 5: Score 0/4

Your response Correct response

Cash disbursements Cash disbursements

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%

Your response Correct response

Total grade: 0.0×1/1 = 0%

Total budgeted manufacturing overhead for the year (a) $ 297,625

Question 6: Score 0/4

Your response Correct response

Weller Company Weller Company

Question 7: Score 0/4

Your response Correct response

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

Question 8: Score 0.28/4

Your response Correct response

Question 9: Score 0.38/4

Your response Correct response

Retained earnings, beginning balance $ 28,000

Question 10: Score 0/4

Your response Correct response

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

Question 11: Score 0/4

Your response Correct response

Gaeber Industries Gaeber Industries

Your response Correct response

Gaeber Industries Gaeber Industries

Your response Correct response

Gaeber Industries Gaeber Industries

Question 12: Score 0/4

Your response Correct response

Raredon Corporation Raredon Corporation

Your response Correct response

Raredon Corporation Raredon Corporation

Question 13: Score 0/4

Your response Correct response

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%