Rainbow Inc. recently appointed Margaret Joyce as vice president of finance and asked her to design a new budgeting system. Joyce has changed to a monthly budgeting system by dividing the company's annualbudget by twelve. Joyce then prepared monthly budgets for each department and asked the managers to submit monthly reports comparing actual to budget. A sample monthly report for Department A is shownbelow.RAINBOW INC.Monthly Report for Department AUnitsVariable production costsActual1,000Budget Variance900100FDirect material$2,800 $2,700 $100UDirect laborVariable factory overhead4,800 4,5004,250 4,050300U200UFixed costsDepreciation3,000 2,700300UTaxes1,000900110UInsurance1,5001,350150UAdministration1,100990110UMarketing1,000900100UTotal costs$19,450 $18,090 $1,360UThis monthly budget has been imposed from the top and will create behavior problems. All of the following are causes of such problems excepta. the use of a flexible budget rather than a fixed budget.Ob. top management authoritarian attitude toward the budget process.Oc. the inclusion of non-controllable costs such as depreciation.Od. the lack of consideration for factors such as seasonality.

answer is a. the use of a flexible budget rather than a fixed budget. The given monthly budget…

Answered: Rainbow Inc. recently appointed…

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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I am taking TCA 221 class. I am in Ch.2 now, which is Accounting for Business Transactions. The question ask me to make T-account for every item - "Paid $100 on account to Edgar's Food Supply". How many items on this question? What are the items? It's that cash or account payable?
Bobs Consult, uses flexible budgeting for cost review purposes. The company’s master/static budget for the entire year includes $324,000 for fixed supervisory salaries for 180,000 client service hours. Supervisor salaries are expected to be incurred uniformly throughout the year (i.e., per the budget, each month is expected to have identical Supervisor salary expense). During the month of September, 15,750 client service hours were provided and supervisory salaries incurred were $28,000. A performance report for September would reflect a flexible budget variance related to supervisor salaries of: Choose one below: $350 Favorable $1,000 Favorable $0 $350 Unfavorable $1,000 Unfavorable
Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system. A report for the company's Assembly Department for the month of March follows: Assembly DepartmentCost ReportFor the Month Ended March 31 Actual Results Planning Budget Variances Machine-hours 15,000 20,000 Variable costs: Supplies $ 11,400 $ 12,000 $ 600 F Scrap 42,000 45,000 3,000 F Indirect materials 119,000 142,500 23,500 F Fixed costs: Wages and salaries 85,900 80,000 5,900 U Equipment depreciation 110,000 110,000 0 Total cost $ 368,300 $ 389,500 $ 21,200 F After receiving a copy of this cost report, the supervisor of the Assembly Department stated, “These reports are super. It makes me feel really good to see how well things are…
Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,500 units. PHOENIX COMPANY Fixed Budget For Year Ended December 31 Sales $ 3,100,000 Costs Direct materials 992,000 Direct labor 232,500 Sales staff commissions 62,000 Depreciation—Machinery 295,000 Supervisory salaries 198,000 Shipping 217,000 Sales staff salaries (fixed annual amount) 251,000 Administrative salaries 498,500 Depreciation—Office equipment 199,000 Income $ 155,000 Problem 23-2A (Algo) Preparing a flexible budget performance report LO P1 Phoenix Company reports the following actual results. Actual sales were 18,500 units. Sales (18,500 units) $ 3,746,250 Costs Direct materials $ 1,198,800 Direct labor 284,900 Sales staff commissions 64,750…
. Flexible budget for selling and administrative expenses for a service company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions 15% of sales 18% of sales $5,000 per month plus 12% of sales $28,000 per month $12,000 per month plus 20% of sales $30,000 per month Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Line Item Description Total sales Variable cost: Total variable cost Fixed cost: Total fixed cost Total selling and administrative expenses Amount Amount Amount $400,000 $500,000 $600,000 $ $ $ $ $
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 for budgeting purposes and the actual results for May as shown below: Fixed Element per Month Variable Element per Customer Served Actual Total for May Revenue $ 5,600 $ 182,000 Employee salaries and wages $ 55,000 $ 1,600 $ 110,300 Travel expenses $ 850 $ 27,200 Other expenses $ 34,000 $ 32,600 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. REQUIRED QUESTIONS 12. What amount of travel expenses would be included in Adger’s planning budget for May? 8. What is Adger’s travel expenses spending variance for May? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as…
Refer to the picture for the problem and template.
) Flexible Budget for Selling and Administrative Expenses for a Service Company Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 14% of sales 18% of sales $6,000 per month plus 12% of sales $30,000 per month $12,000 per month plus 20% of sales $31,000 per month Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 $400000 Total sales Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost Fixed cost: Miscellaneous administrative expense 56,000 Total fixed cost $500000 $600000 70,000 $ Fixed cost: Miscellaneous…
Your managerial accountant provided you with information comparing the actual results to the budgeted amounts for the period: Static Flexible Actual Quantity 3,200 DL hours 2,900 hours 2,900 hours Price $15 per hour $15 per hour $18 per hour Total Costs $48,000 $43,500 $52,200 Based on the information provided, select all of the true statements from the following options: Your managerial accountant provided you with information comparing the actual results to the budgeted amounts for the period: Static Flexible Actual Quantity 3,200 DL hours 2,900 hours 2,900 hours Price $15 per hour $15 per hour $18 per hour Total Costs $48,000 $43,500 $52,200 Based on the information provided, select all of the true statements from the following options: The price variance is $8,700, favorable The price variance is $8,700, unfavorable The total budget variance is $42,000, favorable The price variance is $3.00, favorable The…
Leist Clinic uses client-visits as its measure of activity. During September, the clinic budgeted for 2,200 client-visits, but its actual level of activity was 2,170 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per client-visit Revenue $ 0 $ 50.80 Personnel expenses $ 26,600 $ 15.60 Medical supplies 1,400 9.40 Occupancy expenses 7,600 2.40 Administrative expenses 5,300 0.10 Total expenses $ 40,900 $ 27.50 The occupancy expenses in the flexible budget for September would be closest to: Multiple Choice A. $13,215 B. 12,808 C. $13,583 D. $12,880
Using a flexible budgeting approach how do I prepare a performance report for the passion department for April 2016, compare an actual overhead cost for 4600 hours. Separate overhead cost into variable and fixed components and show the amounts of any variances between actual budgeted amounts.
The following is monthly budgeted cost and activity information for two activities in the purchasing department of X Company: Activity Variable Costs Fixed Costs Cost Driver Supplier relations $9,500 $16,900 380 suppliers Invoicing $11,700 $26,300 780 invoices In November, actual costs and activity were as follows: Activity Total Costs Driver Amount Supplier relations $28,555 430 suppliers Invoicing $38,115 806 invoices What was the flexible budget variance for the invoicing activity for November (assume that favorable variances are positive numbers and unfavorable variances are negative numbers)? A: $-26,415 B: $-26,025 C: $-11,815 D: $-115 E: $0 OF: $275

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