ACCT230 - Week 6 Homework
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ACCT230 – Week 6 Homework – Chapter 9
Objective: Preparing the revenue budget, professional labor budget, overhead budget, other
expenses budget, and budgeted income statement.
Information
Henry and Jones, partners in a sports management consulting firm, budgeted the following
professional labor hours for the year ended December 31, 20--:
Partners
.......................................................
4,000
Associates
....................................................
7,000
Staff
.............................................................
11,000
Partners have a billing rate of $200 per hour and actually earn $100 per hour. Associates bill out at
$120 per hour and earn $60 per hour. Staff has a billing rate of $80 an hour and earns $40 per hour.
Budgeted overhead and other expenses are as follows:
Overhead:
Depreciation—Equipment
.....................
$ 40,000
Depreciation—Building
........................
90,000
Fringe Benefits
......................................
190,000
Photocopying
........................................
22,000
Secretarial Support
................................
230,000
Telephone/Fax
.......................................
31,000
Utilities
.................................................
43,000
Other Direct Expenses:
Travel
....................................................
$ 54,000
Meals
....................................................
18,000
Directions:
1.
Using the schedule below, prepare a revenue budget for the year ended December 31, 20--.
Henry and Jones
Revenue Budget
For the Year Ended December 31, 20--
Item
Professional
Hours
Billing
Rate
Total
Revenues
Partners
.........................
4,000
$200
$800,000
Associates
......................
7,000
$120
$840,000
Staff
...............................
11,000
$80
$880,000
Total
..........................
22,000
$2,520,000
2.
Using the schedule below, prepare a professional labor budget for the year ended December 31,
20--.
Henry and Jones
Professional Labor Budget
For the Year Ended December 31, 20--
Item
Professional
Hours
Wage
Rate
Total Labor
Dollars
Partners
.........................
4,000
$100
$400,000
Associates
......................
7,000
$60
$420,000
Staff
...............................
11,000
$40
$440,000
Total
..........................
22,000
$1,260,000
3.
Using the schedule below, prepare an overhead budget for the year ended December 31, 20--.
Henry and Jones
Overhead Budget
For the Year Ended December 31, 20--
Item
Amount
Secretarial Support
..............................................................
$
230,000
Fringe Benefits
....................................................................
$190,000
Depreciation—Building
......................................................
$90,000
Utilities
...............................................................................
$43,000
Depreciation—Equipment
...................................................
$40,000
Telephone/Fax
.....................................................................
$31,000
Photocopying
......................................................................
$22,000
Total
................................................................................
$646,000
4.
Using the schedule below, prepare an other direct expenses budget for the year ended December
31, 20--.
Henry and Jones
Other Direct Expenses Budget
For the Year Ended December 31, 20--
Item
Amount
Travel
..................................................................................
$
54,000
Meals
..................................................................................
$18,000
Total
................................................................................
$72,000
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Professional Fees Earned Budget
Day & Spieth, CPAS, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the
following billable hours have been estimated for the year ending March 31, 20Y6:
Billable Hours
Audit Department:
Staff
27,300
Partners
4,100
Tax Department:
Staff
21,000
Partners
2,600
Small Business Accounting Department:
Staff
3,500
Partners
500
The average billing rate for staff is $105 per hour, and the average billing rate for partners is $225 per hour.
Prepare a professional fees earned budget for Day & Spieth, CPAS, for the year ending March 31, 20Y6.
DAY & SPIETH, CPAS
Professional Fees Earned Budget
For the Year Ending March 31, 20Y6
Sign out
O 11:09
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Flexible budget for selling and administrative expenses for a service company Social Media Inc. uses flexible budgets that are based on the following data: Sales commissions ............................................................ 15% of sales Advertising expense .......................................................... 20% of sales Miscellaneous administrative expenses ........................... $7,000 per month plus 10% of sales Office salaries expense ..................................................... $35,000 per month Customer support expenses ............................................. $11,000 per month plus 18% sales Research and development expense ................................ $35,000 per month Prepare a flexible selling and administrative expenses budget for June 2016 for sales volume $400,000, $500,000 and $600,000.
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Performance reportPrepare a performance report for the dining room of Leonardo’sItalian Cafe ́ for the month of February 2011, using the followingdata:Budgeted Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,300 $4,150Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,650 1,500Utilities ............................................... 2,200 2,050Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500Actual Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,700 $4,400Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 1,400Utilities ............................................... 2,350 2,100Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500
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Deleon Inc. is preparing its annual budgets for the year ending December 31, 2022. Accounting assistants furnish the data shown
below.
Sales budget:
Anticipated volume in units
Unit selling price
Production budget:
Desired ending finished goods units
Beginning finished goods units
Direct materials budget:
Direct materials per unit (pounds)
Desired ending direct materials pounds
Beginning direct materials pounds
Cost per pound
Direct labor budget:
Direct labor time per unit
Direct labor rate per hour
Budgeted income statement:
Total unit cost
Product
JB 50
400,000
$20
30,000
25,000
2
30,000
40,000
$3
0.4
$12
$13
Product
JB 60
200,000
$25
15,000
10,000
3
10,000
15,000
$4
0.6
$12
$20
An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget.
The latter shows selling expenses of $560,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of
$540,000 for product JB 50 and $340,000 for product…
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6) Some of the beginning and end of the period information of the production enterprise, which budgets the General Production Expenses on its products according to the Direct Labor Hours, are as follows.Budgeted General Production Expenses 20.000.-₺Actual Activity Volume 3,800 Direct labor hoursActual General Production Expenses 18.000.-₺Overload 1.000.-₺Desired: Calculate the "Budgeted Activity Volume" of the business.
A. 4,500 Direct labor hoursB. 4,000 Direct labor hoursC. 2,500 direct labor hoursD. 3,000 Direct labor hoursE. 5,000 Direct labor hours
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College Memories, Inc., publishes college yearbooks. A monthly flexible overhead budget for the firm follows.
Budgeted Cost 1,500 1,750 2,000
Variable costs:
Indirect material:
Glue .....................................$ 750 $ 875 $ 1,000
Tape ............................................300 350 400
Miscellaneous supplies ...............3,000 3,500 4,000
Indirect labor ..............................7,500 8,750 10,000
Utilities:
Electricity ..............................1,500 1,750 2,000
Natural gas ..................................450 525 600
Total variable cost $ 13,500 $ 15,750 $ 18,000
Fixed costs:
Supervisory labor.................. 12,500…
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College Memories, Inc., publishes college yearbooks. A monthly flexible overhead budget for the firm follows.
Budgeted Cost 1,500 1,750 2,000
Variable costs:
Indirect material:
Glue .....................................$ 750 $ 875 $ 1,000
Tape ............................................300 350 400
Miscellaneous supplies ...............3,000 3,500 4,000
Indirect labor ..............................7,500 8,750 10,000
Utilities:
Electricity ..............................1,500 1,750 2,000
Natural gas ..................................450 525 600
Total variable cost $ 13,500 $ 15,750 $ 18,000
Fixed costs:
Supervisory labor.................. 12,500…
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H1.
Account
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Arberg Company s controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin ......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required:
1. What is Arberg s variable cost ratio? What is its contribution margin ratio?
2. Suppose Arberg s actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement.
3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer.
4. What is Arberg s expected margin of safety?
5. What is Arberg s margin of safety if sales revenue is $380,000?
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Arberg Company s controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin ......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250
Required
4. What is Arberg s expected margin of safety?
5. What is Arberg s margin of safety if sales revenue is $380,000?
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Arberg Company's controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required: 1. What is Arberg's variable cost ratio? What is its Contribution marginratio? 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a Contribution marginincome statement to verify the accuracy of your answer. 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $380,000?
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H1.
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Cash budget—comprehensive Following are the budgeted income statements for the second quarter of 2013 for SeaTech, Inc.:April May JuneSales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000 $170,000 $190,000Cost of goods sold* . . . . . . . . . . . . . . . . . . . . . 96,000 114,000 126,000Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,000 $ 56,000 $ 64,000Operating expenses† . . . . . . . . . . . . . . . . . . . . 22,000 25,000 27,000Operating income . . . . . . . . . . . . . . . . . . . . . . . $ 22,000 $ 31,000 $ 37,000*Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead). †Includes all period costs (i.e., selling, general, and administrative expenses). The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collected in the first month after the sale is made, and 40% are expected to be collected in the second month after sale. Depreciation,…
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The following relationships pertain to a year's budgeted activity for ABC Company: High Low Direct labor hours.................................................................... 400,000 300,000Total costs................................................................................... $154,000 $129,000What are the budgeted fixed costs for the year?
a. $100,000
b. $25,000
c. $54,000
d. $75,000
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Cash receipts budget Scottsdale Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows:Actual:July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,000August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,000Forecast:September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,000October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,000November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,000Based on past experience, it is estimated that 30% of a month’s sales are collected in the month of sale, 55% are collected in the month following the sale, and 10% are collected in the second month following the sale.Required:Calculate the estimated cash receipts for September, October, and…
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The management of Mecca Copy, a photocopying center located on University Avenue, has compiled thefollowing data to use in preparing its budgeted balance sheet for next year:Ending BalancesCash ..................................................................... ?Accounts receivable ............................................. $8,100Supplies inventory ................................................ $3,200Equipment ............................................................ $34,000Accumulated depreciation .................................... $16,000Accounts payable ................................................. $1,800Common stock ...................................................... $5,000Retained 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.
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Given below the 2PM’s Hairstyling information for the month ended June 30:
a) Revenue and cost formula
Budgeted client-visits q
Revenue RM180q
Wages and salaries RM65,000 + RM37q
Hairstyling supplies RM1.50q
Client gratuities RM4.10q
Electricity RM1500 + RM0.10q
Rent RM28,500
Liability insurance RM2,800
Employee health insurance RM21,300
Miscellaneous RM1,200 + RM0.20q
b) The budgeted client-visits were 1,000.
c) Income statement for the month ended June 30:
2PM’s Hairstyling Income Statement For the month ended June 30
Actual client-visits
1100
RM
Revenue
194,200
Expenses:
Wages and salaries
106,900
Hairstyling supplies
1,620
Client gratuities
6,870
Electricity
1,550
Rent
28,500
Employee health insurance
22,600…
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3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
PR 22-3A
Budgeted income statement and supporting budgets
/4. Total direct
labor cost in
Fabrication Dept.,
$29,216
The budget director of Feathered Friends Inc.., with the assistance of the controller, trea-
surer, production manager, and sales manager, has gathered the following data for use
in developing the budgeted income statement for December 2016:
OBJ. 4
a.
Estimated sales for December:
Bird house....
3,200 units at $50 per unit
3,000 units at $70 per unit
Bird feeder....
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8. Concord corporation provides…
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task 1
Prepare the following budgets for the year 2021: -
a. Sales budget. Show total sales by quarter and in total for the year.
b. Production budget. Show total production unit by quarter and in total for the year.
c. Direct material usage and purchase budget.
d. Direct labour budget.
task 2
Based Jaka’s experience, fifty percent (50%) of sales are paid in cash. Of the sales on account, seventy percent (70%) are collected in the quarter of sale; the remaining thirty percent (30%) are collected in the quarter following the sale. Total sales for the fourth quarter of 2020 totaled RM2,000,000.
Required:
Refer to the sales budget prepared in Task 1. Construct a cash receipts budget including an accounts receivable aging schedule for Jaka Sdn Bhd for each quarter of year 2021.
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Exercise 7 (Cash Budget Analysis)
A cash budget, by quarters, is given below for a retail company. (000 omitted).
The company requires a minimum cash balance of P5,000 to start each quarter.
Quarter
1 2 3 4 Year
Cash balance, beginning..................... P9 P? P? P? P?
Add collections from customers….. ? ? 125 ? 391
Total cash available………………. 85 ? ? ? ?
Less disbursements:
Purchase of inventory….................. 40 58 ? 32 ?
Operating expenses…………... ? 42 54 ? 180
Equipment purchases…................ 10 8 8 ? 36
Dividends…………………….. 2 2 2 2 ?
Total disbursement………………..…
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Customers
balance December 31, 2023
om customers
e balance, March 31, 2024:
cted in 2nd Ot
2024
Data table
Total sales
Budgeted purchases of direct matenal
Budgeted direct labor cost
Budgeted manufacturing overhead costs
Variable manufacturing overhead
Depreciation
Insurance and property taxes
Budgeted selling and administrative expenses
Salaries expense
Rent expense
Insurance experese
Depreciation experie
Supples expense
Print
Done
208.000
40,900
37,500
1,100
1.200
6,700
4,000
1,000
1,400
6.240
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Q5
A budget is 'accepted' by managers when they______.
Select one:
a. relates it to their own personal objectives
b. receive the budget in writing
c. are consulted by top management
d. agree to it verbally
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Requirement:
Show your working
Thank you will learn a lot from this
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- eBook Print Item Professional Fees Earned Budget Day & Spieth, CPAS, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending March 31, 20Y6: Billable Hours Audit Department: Staff 27,300 Partners 4,100 Tax Department: Staff 21,000 Partners 2,600 Small Business Accounting Department: Staff 3,500 Partners 500 The average billing rate for staff is $105 per hour, and the average billing rate for partners is $225 per hour. Prepare a professional fees earned budget for Day & Spieth, CPAS, for the year ending March 31, 20Y6. DAY & SPIETH, CPAS Professional Fees Earned Budget For the Year Ending March 31, 20Y6 Sign out O 11:09arrow_forwardFlexible budget for selling and administrative expenses for a service company Social Media Inc. uses flexible budgets that are based on the following data: Sales commissions ............................................................ 15% of sales Advertising expense .......................................................... 20% of sales Miscellaneous administrative expenses ........................... $7,000 per month plus 10% of sales Office salaries expense ..................................................... $35,000 per month Customer support expenses ............................................. $11,000 per month plus 18% sales Research and development expense ................................ $35,000 per month Prepare a flexible selling and administrative expenses budget for June 2016 for sales volume $400,000, $500,000 and $600,000.arrow_forwardPerformance reportPrepare a performance report for the dining room of Leonardo’sItalian Cafe ́ for the month of February 2011, using the followingdata:Budgeted Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,300 $4,150Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,650 1,500Utilities ............................................... 2,200 2,050Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500Actual Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,700 $4,400Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 1,400Utilities ............................................... 2,350 2,100Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500arrow_forward
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- Arberg Company s controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin ......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required 4. What is Arberg s expected margin of safety? 5. What is Arberg s margin of safety if sales revenue is $380,000?arrow_forwardArberg Company's controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required: 1. What is Arberg's variable cost ratio? What is its Contribution marginratio? 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a Contribution marginincome statement to verify the accuracy of your answer. 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $380,000?arrow_forwardH1.arrow_forward
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