savita BE6.3 -Using Excel to Create a Production BudgetPROBLEMFilling in for his supervisor, who suddenly left the company, Harvey quicklyevaluated the situation to wrap up his department's production budget. Thedepartment currently holds enough inventory to be in compliance with itsstandard which is based on the following month's budgeted sales. From thesales and previous budgets, he learned the budgeted unit sales for the next 4months and the standard for holding inventory at month end which are bothpresented here.Unit sales per monthMonth 1Month 2Month 3Month 4Ending inventory standardMaterials held at month end5,0004,5006,0006,50010%Student Work AreaRequired: Provide input into cells shaded in yellow in this template. Input the requiredmathematical formulas or functions with cell references to the Problem area or work area asindicated.Show the production budget that Harvey would assemble for the next quarter.Month 3Month 15,000Month 24,500Budgeted sales volumeTarget ending FG InventoryTotal units neededBeginning FG InventoryBudgeted units to be produced▼▼6,000▼Quarter▼▼

It has been given that a finished goods inventory at the end of the month have to be 10% of the next…

Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Show the production budget that Harvey would assemble for the next quarter. Budgeted sales volume Target ending FG Inventory Total units needed Beginning FG Inventory Budgeted units to be produced Month 1 5,000 Month 2 4,500 Month 3 6,000 Quarter

Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Show the production budget that Harvey would assemble for the next quarter. Budgeted sales volume Target ending FG Inventory Total units needed Beginning FG Inventory Budgeted units to be produced Month 1 5,000 Month 2 4,500 Month 3 6,000 Quarter

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...

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Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
Before the year began, the following static budget was developed for the estimated sales of 50,000. Sales are higher than expected and management needs to revise its budget. Prepare a flexible budget for 100,000 and 110,000 units of sales.
Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales.
Friendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?
Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for the upcoming year. Past trends have indicated the following dollars were spent at three different levels of output: In establishing a budget for 14,000 units, Taylor should treat A, B, and C costs as: a. semivariable, fixed, and variable, respectively. b. variable, fixed, and variable, respectively. c. semivariable, semivariable, and semivariable, respectively. d. variable, semivariable, and semivariable, respectively.
Norton Company, a manufacturer of infant furniture and carriages, is in the initial stages of preparing the annual budget for the coming year. Scott Ford has recently joined Nortons accounting staff and is interested in learning as much as possible about the companys budgeting process. During a recent lunch with Marge Atkins, sales manager, and Pete Granger, production manager, Ford initiated the following conversation. FORD: Since Im new around here and am going to be involved with the preparation of the annual budget, Id be interested in learning how the two of you estimate sales and production numbers. ATKINS: We start out very methodically by looking at recent history, discussing what we know about current accounts, potential customers, and the general state of consumer spending. Then, we add that usual dose of intuition to come up with the best forecast we can. GRANGER: I usually take the sales projections as the basis for my projections. Of course, we have to make an estimate of what this years closing inventories will be, which is sometimes difficult. FORD: Why does that present a problem? There must have been an estimate of closing inventories in the budget for the current year. GRANGER: Those numbers arent always reliable since Marge makes some adjustments to the sales numbers before passing them on to me. FORD: What kind of adjustments? ATKINS: Well, we dont want to fall short of the sales projections so we generally give ourselves a little breathing room by lowering the initial sales projection anywhere from 5 to 10 percent. GRANGER: So, you can see why this years budget is not a very reliable starting point. We always have to adjust the projected production rates as the year progresses, and of course, this changes the ending inventory estimates. By the way, we make similar adjustments to expenses by adding at least 10 percent to the estimates; I think everyone around here does the same thing. Required: 1. Marge Atkins and Pete Granger have described the use of budgetary slack. a. Explain why Atkins and Granger behave in this manner, and describe the benefits they expect to realize from the use of budgetary slack. b. Explain how the use of budgetary slack can adversely affect Atkins and Granger. 2. As a management accountant, Scott Ford believes that the behavior described by Marge Atkins and Pete Granger may be unethical and that he may have an obligation not to support this behavior. By citing the specific standards of competence, confidentiality, integrity, and/or credibility from the Statement of Ethical Professional Practice (in Chapter 1), explain why the use of budgetary slack may be unethical. (CMA adapted)
Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a flexible selling and administrative expenses budget for October for sales volumes of 500,000, 750,000, and 1,000,000.
Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
PROBLEM Filling in for his supervisor, who suddenly left the company, Harvey quickly evaluated the situation to wrap up his department's production budget. The department currently holds enough inventory to be in compliance with its standard which is based on the following month's budgeted sales. From the sales and previous budgets, he learned the budgeted unit sales for the next 4 months and the standard for holding inventory at month end which are both presented here. Unit sales per month Month 1 Month 2 Month 3 Month 4 Ending inventory standard Materials held at month end 5,000 4,500 6,000 6,500 10% Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Show the production budget that Harvey would assemble for the next quarter. Budgeted sales volume Target ending FG Inventory Total units needed Beginning FG Inventory Budgeted units to be produced…
Regal Furnitures produces and sells high-quality reading tables. One of the very popular models in the reading table lineup is RT360. The management accountant of the company is in the process of preparing its Selling and Administrative Expense Budget for the first quarter of the year. The following budget data are available: Assume that all of these expenses (except depreciation) are paid in cash in the month they are incurred. Answer the following questions:a) If Regal Furnitures has budgeted to sell 19,000 RT360 tables in January, then what will be the total budgeted selling and administrative expenses for January?b) If the company has budgeted to sell 16,000 RT360 tables in February, then what will be the budgeted total cash disbursements for selling and administrative expenses for February?c) If the budgeted total cash disbursements for selling and administrative expenses for March total Tk. 459,200, then how many RT360 table does the company plan to sell in March?
Helen is working on her department's budgeted annual income statement. In the process, she needs to determine the budgeted amount for selling, general, and administrative (SG&A) expenses in order to complete her budget. Sales Variable SG&A cost 11500 units $0.20 per unit Advertising expense $6200 per year Depreciation on office equipment $8600 per year Other fixed SG&A costs $24800 On the basis of the given data, what are total budgeted selling, general, and administrative (SG&A) expenses of the department? ○ $35700 O $33300 O $17100 O $41900
You have just been hired into a management position which requires the application of your budgeting skills. You find out that budgeting has not been a priority of the company. You have contacted various areas on the organization and have accumulated the information below to assist you in preparing a comprehensive budget. Manufacturing Inc. produces a part used in the production of engines. Actual Sales and Projected sales in units: March (Actual) 38,000 April 40,000 May 42,000 June 45,000 July 44,000 Sales are the following type: 51% Cash sales collected in month of sale 49% Credit sales collected in the following month of sale…