(a)Prepare Bramble's flexible budget and actual income statement for the year.Sales volumePer unitActual51,700Flexible Budget51,700Per unitSalesVariable costs:$14.50$LA$13.90Direct materials3.403.30Direct labor1.701.75Variable-MOH1.601.60Variable SG&A0.400.40Contribution margin$7.40$6.85Fixed costs:Fixed-MOHFixed SG&AOperating income$ Managers at Bramble, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 9% meantbonuses for everyone. The production crew had been managing costs well but wasn't sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year.ActualMaster BudgetSales volume (units)51,70044,000Selling price$14.50$13.90DM cost/unit$3.40$3.30DL cost/unit$1.70$1.75Variable-MOH cost/unit$1.60$1.60Variable SG&A cost/unit$0.40$0.40Fixed-MOH cost$204,000$194,100Fixed SG&A cost$116,000$111,600

Bramble's Income Statements(a) Flexible Budget and Actual Income StatementFor the YearItem Units…

Answered: (a) Prepare Bramble's flexible budget…

PAYROLL ACCT.,2019 ED.(LL)-TEXT

19th Edition

ISBN:9781337619783

Author:BIEG

Publisher:BIEG

Chapter6: Analysing And Journalizing Payroll

Section: Chapter Questions

Problem 1CP: Frank Flynn is the payroll manager for Powlus Supply Company. During the budgeting process, Sam...

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Managers at Marigold, Inc. were cautiously optimistic about receiving their bonuses at year-end. Periodic communications from the top noted that the sales team had been exceeding targets throughout the year, which led to steady production activity to keep pace. Managers knew that a company profit margin of 13% meant bonuses for everyone. The production crew had been managing costs well but wasn’t sure where final costs would land with the sales volume higher than planned. The following information outlines actual and budgeted results for the year. Actual Master Budget Sales volume (units) 51,800 44,400 Selling price $14.30 $13.90 DM cost/unit $2.80 $2.70 DL cost/unit $1.75 $1.80 Variable-MOH cost/unit $1.40 $1.40 Variable SG&A cost/unit $0.60 $0.60 Fixed-MOH cost $186,000 $176,100 Fixed SG&A cost $123,000 $118,100 (a) Prepare Marigold’s flexible budget and actual income…
Upon receipt of the budget, the team manager, June Jackson, has now informed you that, in keeping with industry players, the management of Pelican Merchandising have indicated an industry requirement to maintain a minimum cash balance of $185,000 each month. She has also noted that management is very keen on keeping the gearing ratio of the business as low as possible and would therefore prefer to cushion any gaps internally using equity financing.Based on the budget prepared, will the business be achieving this desired target? Suggest three (3) internal strategies that may be employed by management to improve the organization’s monthly cash flow and militate against or reduce any possible shortfall reflected in the budget prepared. Each strategy must be fully explained.
arrow_forward Question .(iii) To help achieve the budgeted sales for the year, Sampson is about to introduce bonuses for itssales staff. The bonuses will be an increasing percentage of the gross sales made, by eachsalesperson, above certain monthly targets.(iv) The company is using a new general ledger software package. The financial controller is impressedwith the new system, because management accounts are easily produced and allow detailedcomparisons with budgets and prior-period figures across product lines and geographical areas.The conversion to the new system occurred with a minimum of fuss. As it is a popular computerpackage, it required only minor modifications.(v) As part of the conversion, the position of systems administrator was created. This position isresponsible for all systems maintenance, including data backups and modifications. These taskswere the responsibility of the accountant.Required:For each of the scenarios above, explain how the components of…
How does the budgeting process translate long-term goals into operating objectives? Suppose Framecraft has an Information Processing Division that provides database management services for the professional photographers and artists who buy its frames. The division uses state-of-the-art equipment and employs five information specialists. Each specialist works an average of 160 hours a month. The division’s controller has com piled the following information: Actual Data for Past Year Forecasted Data for This Year November December January February March Client billings (sales) $25,000 $35,000 $25,000 $20,000 $40,000 Selling and administrative expenses 12,000 13,000 12,000 11,000 12,500 Operating supplies 2,500 3,500 2,500 2,500 4,000 Processing overhead 3,200 3,500 3,000 2,500 3,500 Of the client billings, 60 percent are cash sales collected during the month of sale, 30 per cent are collected in the first month following the sale, and 10 percent are collected in the second month…
You are the new managerial accountant for a company that awards its managers with a year-end bonus based on exceeding the target operating profit presented in the yearly budget proposal. The controller tells you that she believes the company will likely have operating profit of $120 million for the year, but asks you to prepare a proposal with projected operating profit of $100 million. She notes that "after all, it is only an estimate, and it would be a shame if the managers missed their bonus again this year after all their hard work." You realize that the only way to project operating profit of $100 million is to make unrealistically low sales estimates and unrealistically high cost estimates.Using the IMA's Statement of Ethical Professional Practice, what guidelines are violated and how should you handle this situation? Create a 100-word response.
In Blossom Corporation's first year of operations, inadequate budgeting led to significant cost overruns in multiple production areas. Direct materials needed to be express-delivered, and laborers needed to be paid overtime because reasonable budgets weren't in place, nor were managers properly trained on how to use them. If adequate budgeting had been done, the company might have achieved its objectives that year. As year one comes to a close, all managers are now committed to creating and using accurate budgets for next year so they can properly plan for the resources to support production. The following information is in place to assist the management team in budgeting for year 2. Budgeted sales volume Additional information: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. (a1) Sales Volume Selling Price Sales Revenue Q1 Q2 $ $ Year 2 Q3 Budgeted selling price is $82/unit. Desired ending FG Inventory is 25% of the following quarter's sales volume. Beginning FG Inventory on January 1 of Year 2 is…
Tyrone Fletcher, president of SoftGro, Incorporated, was looking forward to seeing the performance reports for November because he knew the company's sales for the month had exceeded budget by a considerable margin. SoftGro, a distributor of educational software packages, had been growing steadily for approximately two years. Fletcher's biggest challenge at this point was to ensure that the company did not lose control of expenses during this growth period. When Fletcher received the November reports, he was dismayed to see the large unfavorable variance in the company's Monthly Selling Expense Report that follows. Unit sales Dollar sales Orders processed Sales personnel per month Advertising Staff salaries Sales salaries Commissions SOFTGRO, INCORPORATED Monthly Selling Expense Report For the Month of November Annual Budget 2,100,000 $ 176,400,000 67,200 90 $ 37,200,000 3,120,000 2,268,000 7,056,000 $ 25,200,000 November Budget November Actual 300,000 November Variance 338,000 38,000…
Upon receipt of the budget, the team manager, has now informed you that, in keeping with industry players, that management has indicated an industry requirement to maintain a minimum cash balance of $155,000 each month. He has also noted that management is very keen on keeping the gearing ratio of the business as low as possible and would therefore prefer to cushion any gaps internally using equity financing. Based on the budget prepared, will the business be achieving this desired industry target? Suggest three (3) internal strategies that may be employed by management to improve the organization's monthly cash flow and militate against or reduce any possible shortfall reflected in the budget prepared. Each strategy must be fully explained.
On these Excel sheets, you will need to prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. The cells will be checked for appropriate formulas, when appropriate. Please highlight the specific answer to the question being posed. Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Sales (45,000 units at $15) Less cost of goods sold: Gross margin Less operating expenses Net loss Direct materials Direct labor Manufacturing overhead Carolina Manufacturing Company Income Statement For the Year Ended December 31 Selling expenses Variable Sales commissi Shipping Fixed (advertisi Administrative expenses Variable (billing Fixed (salaries 135,000 117,450 147,750 40,500 8,100 180,000 2,700 72.000 $675,000 400,200 274,800…
6. Person X has managed a downtown store in a major metropolitan city for several years. The firm has ten stores in varying locations. In the past, senior management noticed Person X's work and he has received very good annual evaluations for his management of the store. \\nThis year his store has generated steady growth in sales, but earnings have been deteriorating. After examining the monthly performance report generated by the company budgeting department, he noticed that increasing fixed costs is causing the decrease in earnings. \\nAdministrative corporate costs, primarily fixed costs, are allocated to individual stores each month based on actual sales for that month. Two of these stores are currently growing at a rapid pace, while four other stores are having operating difficulties. \\n\\nRequired:\\nFrom the information presented, what do you think is the cause of Person X's reported decrease in earnings? How can this be corrected?
Mark Fletcher, President of SoftGro, Inc., was looking forward to seeing the performance reports for November because he knew the company's sales for the month had exceeded budget by a considerable margin. SoftGro, a distributor of educational software packages, has been growing steadily for approximately two years. Fletcher's biggest challenge at this point was to ensure that the company did not lose control of expenses during this growth period. When Fletcher received the November reports, he was dismayed to see the large unfavorable variance in the company's Monthly Selling expense Report that follows: Annual Budget November Budget November Actual November Variance Unit sales 2,000,000 280,000 310,000 30,000 Dollar sales $ 80,000,000.00 $ 11,200,000.00 $ 12,400,000.00 $ 1,200,000.00 Orders processed 54,000 6,500 5,800 -700 Sales personnel per month 90 90 96 -6 Advertising $ 19,800,000.00 $…
As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) $ 100.00 70.00 1,200,000 Required: 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $300,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $70 variable cost per unit the labor-cost component is $25. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…

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