You are working as Executive Assistant to the Chairman in Bharat Gears, an automotive company in Chennai. The following data has been presented to you for interpretation to be given to the Chairman explaining to him the department's responsibility for deviation of performance. Prepare a Flexible budget and show who is responsible for deviation of performance. This is one month's data. Static Budget in Output Units Actual Output Units produced and sold. Budgeted Selling Price per unit of Output Budgeted Variable Costs per unit of Output Budgeted Fixed Costs Per Month Actual Revenue Actual Variable Costs Favorable Variance in Fixed Costs 25,000 23,000 Rs 40.00 Rs 25.00 Rs 2,00,000.00 Rs 8,74,000.00 Rs 6,30,000.00 Rs 5,000.00 Although output units sold exceeded expectations, operating income did not. Assume that there was no beginning or ending inventory. You thought to analyze the situation. Use F for Favourable and U for Unfavourable

You are working as Executive Assistant to the Chairman in Bharat Gears, an automotive company in Chennai. The following data has been presented to you for interpretation to be given to the Chairman explaining to him the department's responsibility for deviation of performance. Prepare a Flexible budget and show who is responsible for deviation of performance. This is one month's data. Static Budget in Output Units Actual Output Units produced and sold. Budgeted Selling Price per unit of Output Budgeted Variable Costs per unit of Output Budgeted Fixed Costs Per Month Actual Revenue Actual Variable Costs Favorable Variance in Fixed Costs 25,000 23,000 Rs 40.00 Rs 25.00 Rs 2,00,000.00 Rs 8,74,000.00 Rs 6,30,000.00 Rs 5,000.00 Although output units sold exceeded expectations, operating income did not. Assume that there was no beginning or ending inventory. You thought to analyze the situation. Use F for Favourable and U for Unfavourable

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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Marigold Company has two production departments, Fabricating and Assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain total budgeted costs. A separate graph based on direct labor hours is used for each department. The graphs show the following. 1. 2. (a) $ $ At zero direct labor hours, the total budgeted cost line and the fixed-cost line intersect the vertical axis at $47,000 in the Fabricating Department and $37,600 in the Assembling Department. State the total budgeted cost equation for each department. (Round cost per direct labor hour to 2 decimal places, e.g. 1.25.) (b). At normal capacity of 47,000 direct labor hours, the line drawn from the total budgeted cost line intersects the vertical axis at $159,800 in the Fabricating Department and $112,800 in the Assembling Department. Your answer is correct. 47,000 total Fixed Costs 37,600 total Fixed Costs eTextbook and Media The total budgeted cost Fabricating Department + Variable Costs…
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! Required information [The following information applies to the questions displayed below.] 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 that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $950 Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. Amount of employees salaries and wages included in the planning budget 11. What amount of employee salaries and wages would be included in Adger's planning budget for May?
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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…
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Marigold Company has two production departments, Fabricating and Assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain total budgeted costs. A separate graph based on direct labor hours is used for each department. The graphs show the following. 1. 2. (a) At zero direct labor hours, the total budgeted cost line and the fixed-cost line intersect the vertical axis at $47,000 in the Fabricating Department and $37,600 in the Assembling Department. At normal capacity of 47,000 direct labor hours, the line drawn from the total budgeted cost line intersects the vertical axis at $159,800 in the Fabricating Department and $112,800 in the Assembling Department. State the total budgeted cost equation for each department. (Round cost per direct labor hour to 2 decimal places, e.g. 1.25.) total total + + of $ of $ per direct labor hour per direct labor hour
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