(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.
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.
Assume that you manage one store in a chain of sporting goods retailers. Each month, your store is evaluated by comparing actual operating results to budgeted results. During December of the current year, your store's sales were up 25% from sales projected on the budget. As a result of this increase in sales, would you expect any other items to come in over (or under) their budgeted amounts? If so, list the items and describe why they would vary from the budget.
The accounting team at Kingbird Corp. plans to get a jump-start on its budget for the second quarter, since the first quarter is going well. Team members want to make sure to determine the cash effects of the company’s sales as well as its biggest production-related cash expenditure, direct materials. The team has gathered the following information: 1. The budgeted selling price for the year is $4.00 per unit. Sales volumes are budgeted as follows for the last month of quarter 1, for all of quarter 2, and for part of quarter 3. March April May June July August 23,800 22,000 25,500 27,800 23,500 23,300 2. Historically, 25% of Kingbird’s sales are cash sales. Of the remaining credit sales, 40% are collected in the month of sale, while 56% are collected the following month. The remainder is deemed uncollectible. 3. Management sets its ending FG Inventory goal at 10% of the following month’s sales volume. The accounting team expects…
The accounting team at Kingbird Corp. plans to get a jump-start on its budget for the second quarter, since the first quarter is going well. Team members want to make sure to determine the cash effects of the company’s sales as well as its biggest production-related cash expenditure, direct materials. The team has gathered the following information: 1. The budgeted selling price for the year is $4.00 per unit. Sales volumes are budgeted as follows for the last month of quarter 1, for all of quarter 2, and for part of quarter 3. March April May June July August 23,800 22,000 25,500 27,800 23,500 23,300 2. Historically, 25% of Kingbird’s sales are cash sales. Of the remaining credit sales, 40% are collected in the month of sale, while 56% are collected the following month. The remainder is deemed uncollectible. 3. Management sets its ending FG Inventory goal at 10% of the following month’s sales volume. The accounting team expects…
A company's sales for the nine months to 30 September are $2.5m. The sales forecast for the next three months is $500,000 in total. The company's budgeted sales for the year are $3.4m The company's CEO has a meeting with the sales manager to discuss plans to close the gap between the forecast and the original budgeted sales for the next quarter. What is this process an example of? Feedback control An activity-based budget A rolling budget Feed-forward control
Legal Corporation offers a wide range of legal services to its customers. Each of the firm's attorneys can negotiate billing rates with their clients. Legal Corporation set a budget at the start of the year to better manage its operations. Total billed hours, amount billed per hour, and variable expense per hour were all included in the budget. Unfortunately, the firm failed to meet its budgeted goals for last year. The results are shown below. Actual Budget Total hours billed 5,800 6,100 Amount billed/hour $375 $425 The hourly variable expense was estimated at $60, but the total variable expense was $295,000. The reasons for the firm's failure to fulfill its budgeted targets are a source of contention among the attorneys. Calculate the variance in variable expenses. Make your computations visible.
using the cash budget Upon receipt of the budget, the team manager, Dannie Bruce, has now informed you that, inkeeping with industry players, the management of Sallat Household Furnishings haveindicated 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.

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