4.Clarke Inc. operates the Patio Furniture Division as a profit center. Operating datafor this division for the year ended December 31, 202o, are as shown below.Difference fromBudgetBudgetSales$2,500,000$50,000 FCost of goods soldVariable1,300,00041,000 FControllable fixed200,0003,000 USelling and administrativeVariable220,0006,000 UControllable fixed50,0002,000 UNoncontrollable fixeddirect oy70,0004,000 UcostsIn addition, Clarke incurs $180,000 of indirect fixed costs that were budgeted at$175,000. Twenty percent (20%) of these costs are allocated to the Patio FurnitureDivision.Instructionsa.Prepare a responsibility report for the Patio Furniture Division for the year.b.Comment on the manager's performance in controlling revenues and costs.C.Identify any costs excluded from the responsibility report and explain why they wereexcluded.

a. Prepare a responsibility report for patio furniture division for the year as shown below:

Answered: 4. Clarke Inc. operates the Patio…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A. The South Department of ABC Corporation is a cost center. The budget for the month of March 20X2 is as follows: Sales salaries 406,725 System support salaries 222, 502 Customer relation salaries 75,975 Accounting salaries 48,345 Depreciation of plant and equipment 45,700 Repairs and maintenance 134,200 Insurance and property taxes 20,245 During March 20X2 the following costs were incurred by South Department: Sales salaries 406,205 System support salaries 222, 450 Customer relation salaries 80,120 Accounting salaries 48,245 Depreciation of plant and equipment 45,700 Repairs and maintenance 138,950 Insurance and property taxes 20,500 REQUIRED: Prepare a performance report for the manager of South Dept for March 20x2. Explain which costs the manager might be expected to request additional reports.
Assume the following information for a merchandising company: Number of units sold 20,000 Selling price per unit $ 30 Variable selling expense per unit $ 3.60 Variable administrative expense per unit $ 3.10 Fixed administrative expenses $ 50,000 Beginning merchandise inventory $ 24,000 Ending merchandise inventory $ 19,000 Merchandise purchases $ 340,000 What is the contribution margin?
Searchlight, Inc. uses ROI to evaluate operations and requires the return on its operating units to be 9%. Operating data for the Western division is shown below: Sales $1,000,000 Controllable margin 120,000 Total average assets 600,000 Fixed costs 60,000 How much is ROI for the year? A. 20% B. 17% C. 10% D. 30%
6
Two articles A and B are manufactured in a department. Sales for the year 2021 were planned as follows: Product 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter (Units) (Units) (Units) (Units) Product 50,000 60,000 65,000 75,000 A Product 25,000 22,500 20,000 19,000 B Selling price were sh. 40 per unit for A and sh. 20 per unit for B respectively. Average sales return is 5 % of sales. What is the annual sales budget for the year 2021? Select one: Sh 11,730,000 O Sh 11,143,500 Sh 9,500,000 O Sh 10,750,000
Product Costs using Activity Rates Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is $121,100, and 17,300 orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity.$ per sales order b. Determine the amount of sales order processing cost that Nozama.com would receive if it had 9,900 sales orders.$
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $950 Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. Amount of employees salaries and wages included in the planning budget 11. What amount of employee salaries and wages would be included in Adger's planning budget for May?
6. Using a responsibility income statement Shown below is the current monthly income statement of Metro Video, by profit centers: Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Dollars % $560,000 100 (268,800) (48) $291,200 52 (67,200) (12) $224,000 (61,600) $162,400 40 29 Equipment Sales Dollars $280,000 (198,800) $ 81,200 (25,200) Segments $56,000 % 100 71) 29 (09) Video Rentals Dollars $280,000 (70,000) $210,000 (42,000) 20 $168,000 % 100 (25) 75 (15) 60 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: (a) Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $_ (b) Closing the Equipment Sales Department and allowing the…
The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2 $3,000,000 1,950,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 3. 600,000 5,000,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $150,000. Reduce average operating assets by 6.25%. (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%)
4
Required information Eckert Company uses the absorption costing approach to cost plus pricing to set prices for its products. Based on budgeted sales of 18.000 units next year, the unit product cost of a particular product is $60.40. The company's selling general, and administrative expenses for this product are budgeted to be $370.800 in total for the year. The company has invested $260.000 in this product and expects a return on investment of T (Appendix 12A) The markup on absorption cost for this product would be closest to which of the following O O O M4T 36.74 ALIK HON 3 Save & Submit
QUESTION 2: ABSORPTION AND VARIABLE COSTING AND BUDGETING ( Good Toys Company produces a toy product. Data concerning the company’s operations last year appear below: Units in beginning inventory 0 Units produced 15,000 Units sold 12,000 Selling price per unit $110 Variable cost per unit: Direct materials $30 Direct labour $20 Variable manufacturing overhead $10 Variable selling and administrative costs $8 Fixed costs in total: Fixed manufacturing overhead $225,000 Fixed selling and administrative costs $280,000 Required (show your calculations):Prepare a variable costing income statement for the year. Type in answers to Question 2. a. (expand the space as needed) Client Solutions is working on its direct labour…

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