You are required to complete the last column of the flexed budget by calculating the variance amount; state whether the variance is favourable or unfavourable; and the causal factor for each variance. ( Flexed Budget Actual Flexed Budget Variances amounts, (Favourable, F) or Unfavourable (U) and the causal factor for the variance Sales 1,500 units $2200 = $3,300,000 1,500 units $2500 = $3,750,000 Direct material costs 1,500 units *$800 = $1,230,000 $1,200,000 Direct labour cost 1,500 units *$190 = $270,000+ $285,000+ Salaries $450,000 $440,000€ $425,000+¹ Rent and depreciation $420,000 Insurance and rates $108,000 $100,000+ t J tt 14
You are required to complete the last column of the flexed budget by calculating the variance amount; state whether the variance is favourable or unfavourable; and the causal factor for each variance. ( Flexed Budget Actual Flexed Budget Variances amounts, (Favourable, F) or Unfavourable (U) and the causal factor for the variance Sales 1,500 units $2200 = $3,300,000 1,500 units $2500 = $3,750,000 Direct material costs 1,500 units *$800 = $1,230,000 $1,200,000 Direct labour cost 1,500 units *$190 = $270,000+ $285,000+ Salaries $450,000 $440,000€ $425,000+¹ Rent and depreciation $420,000 Insurance and rates $108,000 $100,000+ t J tt 14
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
please help me to solve this problem and please do not give answer in image formate
![You are required to complete the last column of the flexed budget by calculating the variance amount; state
whether the variance is favourable or unfavourable; and the causal factor for each variance.
(
Flexed Budget
Actual
Flexed Budget
Variances amounts,
(Favourable, F) or
Unfavourable (U) and
the causal factor for
the variance
Sales
(
1,500 units *$2200 =
$3,300,000€
1,500 units*$2500 =
$3,750,000
Direct material costs 1,500 units *$800 =
$1,230,000
$1,200,000€
Direct labour cost
$270,000
1,500 units *$190 =
$285,000
Salaries
$450,000€
$440,000+¹
Rent and depreciation
P
2
$420,000
$425,000€
Insurance and rates
$108,000€
$100,000€¹
J
Part B: Cash Budgets
You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following
information:
1. Opening cash as of 1st June 2022 is $4,000 in balance.
2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+
3. Sales are made up of 50% cash and 50% on credit.
4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following
month.
5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500.
7.
6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July.
Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made
in the same month of purchase and the remainder 40% in the following month. The inventory purchased in
May was $190,000.
8.
Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of
$10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July.
9.
Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years.
Depreciate using straight line basis.
10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000
with an accumulated depreciation of $16,000.
4
Required:
Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for
these two periods.
4
له
J
16
E
T₁
T. T. T.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d5f8213-f0c5-4e87-a7d9-c1456c841a74%2F007bdfd8-3b78-42d6-9f92-809e48210f31%2F1gxziui_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You are required to complete the last column of the flexed budget by calculating the variance amount; state
whether the variance is favourable or unfavourable; and the causal factor for each variance.
(
Flexed Budget
Actual
Flexed Budget
Variances amounts,
(Favourable, F) or
Unfavourable (U) and
the causal factor for
the variance
Sales
(
1,500 units *$2200 =
$3,300,000€
1,500 units*$2500 =
$3,750,000
Direct material costs 1,500 units *$800 =
$1,230,000
$1,200,000€
Direct labour cost
$270,000
1,500 units *$190 =
$285,000
Salaries
$450,000€
$440,000+¹
Rent and depreciation
P
2
$420,000
$425,000€
Insurance and rates
$108,000€
$100,000€¹
J
Part B: Cash Budgets
You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following
information:
1. Opening cash as of 1st June 2022 is $4,000 in balance.
2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+
3. Sales are made up of 50% cash and 50% on credit.
4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following
month.
5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500.
7.
6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July.
Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made
in the same month of purchase and the remainder 40% in the following month. The inventory purchased in
May was $190,000.
8.
Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of
$10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July.
9.
Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years.
Depreciate using straight line basis.
10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000
with an accumulated depreciation of $16,000.
4
Required:
Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for
these two periods.
4
له
J
16
E
T₁
T. T. T.
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