Fundamentals of Cost Accounting
6th Edition
ISBN: 9781260708783
Author: LANEN, William
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 56P
Flexible Budget
Oak Hill Township operates a motor pool with 20 vehicles. The motor pool furnishes gasoline, oil, and other supplies for the cars and hires one mechanic who does routine maintenance and minor repairs. Major repairs are done at a nearby commercial garage. A supervisor manages the operations.
Each year, the supervisor prepares a
The following schedule presents the master budget for the year and for the month of July.
The annual budget was based on the following assumptions:
- 1. Automobiles in the pool: 20.
- 2. Miles per year per automobile: 45,000.
- 3. Miles per gallon per automobile: 20.
- 4. Gas per gallon: $1.80.
- 5. Oil, minor repairs, parts, and supplies per mile: $0,008.
- 6. Outside repairs per automobile per year: $270.
The supervisor is unhappy with the monthly report, claiming that it unfairly presents his performance for July. His previous employer used flexible budgeting to compare actual costs to budgeted amounts.
Required
- a. What is the gasoline monthly flexible budget and the resulting amount over-or under-budget? (Use miles as the activity base.)
- b. What is the monthly flexible budget for the oil, minor repairs, parts, and supplies and the amount over-or underbudget? (Use miles as the activity base.)
- c. What is the monthly flexible budget for salaries and benefits and the resulting amount over-or underbudget?
- d. What is the major reason for the cost per mile to decrease from S0.2427 budgeted to $0.2121 actual?
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owa Imaging Center provided the financial information in Exhibit 5.15 below. Prepare a cash budget for the quarter ending March 20X1. For Blackboard you will enter your ENDING cash balance for the months of January 20X1, February 20X1, March 20X1, and the Quarter ending March 20X1. I want you to submit your work for this problem by email so I can review the entire document.
Exhibit 5-15 Iowa Imaging Center
Givens
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Patient Revenues, 20X0
Estimated Patient Revenues, 20X1
Given 1
October
$4,000,000
Given 2
January
$4,300,000
November
$4,200,000
February
$4,350,000
December
$4,300,000
March
$4,400,000
Other Revenues, 20X1
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January
$90,000
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Chapter 17 Solutions
Fundamentals of Cost Accounting
Ch. 17 - What complication arises in variance analysis when...Ch. 17 - Variance analysis can be useful in a manufacturing...Ch. 17 - How would you recommend accounting for variances...Ch. 17 - What does a manager learn by computing an industry...Ch. 17 - Why is there no efficiency variance for revenues?Ch. 17 - For what decisions would a manager want to know...Ch. 17 - If the sales activity or materials efficiency...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - What is the advantage of recognizing materials...
Ch. 17 - How could a professional sports firm use the mix...Ch. 17 - Prob. 12CADQCh. 17 - How could a hospital firm use the mix variance to...Ch. 17 - Prob. 14CADQCh. 17 - There is no reason to investigate favorable...Ch. 17 - Prob. 16CADQCh. 17 - Consider a firm in the sharing economy, such as...Ch. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Prob. 22ECh. 17 - Industry Volume and Market Share Variances DB Ice...Ch. 17 - Olive Tree Products sold 72,000 units during the...Ch. 17 - Prob. 25ECh. 17 - Sales Mix and Quantity Variances A-Zone Media...Ch. 17 - Prob. 27ECh. 17 - Sales Mix and Quantity Variances The restaurant at...Ch. 17 - Sales Mix and Quantity Variances Chow-4-Hounds...Ch. 17 - Materials Mix and Yield Variances Stacy, Inc.,...Ch. 17 - Materials Mix and Yield Variances Johns...Ch. 17 - Labor Mix and Yield Variances Matts Eat N Run has...Ch. 17 - Flexible Budgeting, Service Organization KB is a...Ch. 17 - Prob. 34ECh. 17 - Prob. 35ECh. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Write a memo to the senior manager of EZ-Tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Refer to the information in Exercise...Ch. 17 - Prob. 40PCh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances:...Ch. 17 - Industry Volume and Market Share: Missing Data The...Ch. 17 - Sales Mix and Quantity Variances Lake Cellars...Ch. 17 - Analyze Performance for a Restaurant Dougs Diner...Ch. 17 - Nonmanufacturing Cost Variances FSBCU is a...Ch. 17 - Performance Evaluation in Service Industries Bay...Ch. 17 - Refer to the information in Problem...Ch. 17 - Prob. 49PCh. 17 - Refer to the data for the Peninsula Candy Company...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Pinnuck Products makes a liquid solvent using two...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Refer to the information in Problem...Ch. 17 - Derive Amounts for Profit Variance Analysis...Ch. 17 - Flexible Budget Oak Hill Township operates a motor...
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