Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2017, the following data are available. 1. Sales: 20,800 units quarter 1; 22,100 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,900, office salaries $6,160, depreciation $4,490, insurance $2,080, utilities $880, and repairs expense $670. 4. Unit selling price: $24. Prepare a selling and administrative expense budget by quarters for the first 6 months of 2017. KIRKLAND COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2017 : Quarter Budgeted Sales in Units Variable Expenses Sales Commissions Delivery Expense Advertising Total Variable Fixed Expenses Sales Salaries Office Salaries Depreciation Insurance Utilities Repairs Expense Total Fixed Total Selling and Administrative Expenses • 0000 40 0000 0000000 0000 00000000 Six Months

Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2017, the following data are available. 1. Sales: 20,800 units quarter 1; 22,100 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,900, office salaries $6,160, depreciation $4,490, insurance $2,080, utilities $880, and repairs expense $670. 4. Unit selling price: $24. Prepare a selling and administrative expense budget by quarters for the first 6 months of 2017. KIRKLAND COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2017 : Quarter Budgeted Sales in Units Variable Expenses Sales Commissions Delivery Expense Advertising Total Variable Fixed Expenses Sales Salaries Office Salaries Depreciation Insurance Utilities Repairs Expense Total Fixed Total Selling and Administrative Expenses • 0000 40 0000 0000000 0000 00000000 Six Months

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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Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,400 units. Sales Costa PHOENIX COMPANY Fixed Budget For Year Ended December 31 Direct materials Direct labor Sales staff commissions Depreciation-Machinery Supervisory salaries Shipping Sales staff salaries (fixed annual amount) Administrative salaries Depreciation-office equipment Income $ 3,234,000 1,001,000 246,400 46,200 295,000 198,000 231,000 251,000 610,700 193,000 $ 161,700
Arberg Company’s controller prepared the following budgeted income statement for the coming year: Sales $417,000 Variable cost 287,730 Contribution margin $129,270 Fixed cost 75,950 Operating income $53,320 2. Suppose Arberg’s actual revenues are $29,900 more than budgeted. By how much will operating income increase?
Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture operations follows. The $157,830 budgeted expenses include $109,350 in variable expenses for desks and $18,480 in variable expenses for chairs, as well as $30,000 of fixed expenses. Actual fixed expenses total $31,800. Desk sales (in units) Chair sales (in units); Desk sales Chair sales Total expenses Income For Quarter Ended June 30 Desk sales Chair sales Variable expenses Contribution margin Fixed Budget Fixed expenses Income Actual Results Variances 135 141 56 64 Dok 28,560 33,600 157,830 167,530 $ 176,850 $ 183,300 $ 6,450 P 5,040 P 9,700 U Required: Prepare a flexible budget performance report that shows variances between budgeted results and actual results. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. $ 47,580 $ 49,370 $ 1,790 F BUSINESS SOLUTIONS Flexible Budget Performance Report Flexible Budget Actual Results Variance Favorable…
The Year 1 selling expense budget for Apple Corporation is as follows. Miscellaneous expenses are mixed costs that include fixed costs of $2,000. The rest of miscellaneous expenses vary proportionately with budgeted sales in dollars. The budgeted sales for Year 2 are $330,000. What will be the value of miscellaneous expenses in the Year 2 selling expense budget? Budgeted sales $275,000 Selling costs: Delivery expenses Commission expenses Advertising expenses Office expenses Miscellaneous expenses Total $5,960 $4,200 $3,600 $6.200 $2,750 5,500 2,500 1,500 5.300 $ 17,550
Print Item The Operating Budgets: Marketing and Administrative Expense Budgets The marketing expense budget can be prepared in much the same way as the overhead budget. That is, variable expenses and fixed expenses are budgeted and then totaled. Suppose that a company has variable marketing expense consisting of a sales commission equal to 5% of sales revenue. Sales revenue for the first three months of the quarter equals $560,000, $580,000, and $600,000. Fixed marketing expense consists of the following monthly costs: depreciation $3,500, salaries $12,000, and advertising $5,000. Prepare a marketing expense budget for the first quarter, by month and in total. Budgeted sales revenue x Sales commission rate Budgeted variable marketing expense $ Fixed marketing expense: Depreciation Salaries January 560,000 5 X 28,000 3,500 12,000 5,000 February 580,000 20,500 48,500 ✔ 5.2 X 29,000 3,500 12,000 5,000 20,500 49,500 $ $ March 600,000 5.3 X 30,000 3,500 12,000 5,000 20,500 50,500 Total…
In Paige Company, direct labor is $20 per hour. The company expects to operateat 10,000 direct labor hours each month. In January 2014, direct labor totaling $204,000is incurred in working 10,400 hours. Prepare (a) a static budget report and (b) a fl exiblebudget report. Evaluate the usefulness of each report.
a) $18,400 b) $101,600 c) $19,600 d) $16,800
Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 22,000 23,000 20,000 20,000 The company’s variable selling and administrative expense per unit is $2.10. Fixed selling and administrative expenses include advertising expenses of $15,000 per quarter, executive salaries of $41,000 per quarter, and depreciation of $21,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,400 will be paid in the second quarter. Required: Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. Note: Round "Per Unit" answers to 2 decimal places.
(1) Compute the total variable cost per unit.(2) Compute the total fixed costs.(3) Compute the income from operations for sales volume of 12,000 units.(4) Compute the income from operations for sales volume of 16,000 units.
Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture operations follows. The $179,710 budgeted expenses include $122.010 in variable expenses for desks and $20,700 in variable expenses for chairs, as well as $37,000 of fixed expenses. Actual fixed expenses total $38,300. Desk sales (in units) Chair sales (in units) Desk sales Chair sales Total expenses Income For Quarter Ended June 30 Desk sales Chair sales Variable expenses Contribution margin Fixed Budget 147 69 Fixed expenses Income Actual Results 153 77 Variances $ 188,160 37,950 179,718 $ 46,400 $ 48,975 $ 2,575 F $ 194,310 43,505 188,840 Required: Prepare a flexible budget performance report that shows variances between budgeted results and actual results. (Indicate the effect of each varlance by selecting favorable, unfavorable, or no variance.) $ 6,150 F 5,555 F 9,130 U BUSINESS SOLUTIONS Flexible Budget Performance Report Flexible Budget Actual Results Variance…