Variance $35,000 F 2,400 F 9,500 F Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Actual Costs Static Budget $473,000 Direct materials Direct manufacturing labor Direct marketing (distribution) labor $438,000 63,600 133,500 66,000 143,000 Required Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

Variance $35,000 F 2,400 F 9,500 F Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Actual Costs Static Budget $473,000 Direct materials Direct manufacturing labor Direct marketing (distribution) labor $438,000 63,600 133,500 66,000 143,000 Required Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

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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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…
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Reliance, Inc, utilizes a standard cost system for budget and control purposes. Flexible budgets are determined and all overbead cost items are assigned on the basis of standard direct labor hours. The following standard cost per finished unit was determined on the basis of a projected monthly normal production for 2020: Direct materials (3 pounds @ P6.00) Direct labor (0.30 hour @P40.00) Variable overhead (0.30 hour @P10) Fixed overhead (0.30 hour @ P6-2/3) P18.00 12.00 3.00 2.00 Total P35.00 You have just received the condensed performance report for the month of Sept., 2020. VARIANCE ANALYSIS Price or Quantity or time or Standard Сарacity Costs Rate Variances Direct materials used Direct labor costs Applied P162,000 108,000 Efficiency P6,000 U 1,200 U P14,000 F *18,200 U 5,250 U 1,500 U Variable overhead 27,000 18,000 300 U Fixed overhead P4,000* U * Includes labor joint variance. ** Includes overhead capacity variance & fixed overhead efficiency variance
Sunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin quantity…
Use the given data shown in the graph. A. What is the budgeted fixed cost per period? B. What is the budgeted variance cost per unit? C. What is the value of F (that is, the flexible budget for an activity of 8,000 units)? D. What is the flexible budget cost amount if the actual activity had been 16,000 units?
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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) Required: $ 100.00 60.00 1,113,040 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 $316,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $60 variable cost per unit the labor-cost component is $27. 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…
Sunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin price…
These are True/False questions. ____ 6. If the total unit cost of manufacturing Product Y is currently $36 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation is $12. ____ 7. A process whereby the effect of fluctuations in level of activity is built into the budgeting system is referred to as flexible budgeting. ____ 8. In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center. ____ 9. The capital expenditures budget summarizes future plans for acquisition of fixed assets. ____ 10. The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis.
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