Fundamental Accounting Principles
23rd Edition
ISBN: 9781259536359
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 22, Problem 3BPSB
Problem 22-3B
Manufacturing: Preparation and analysis of
P3
HCS MFG. makes its product for $60 per unit and sells it for $130 per unit. The sales staff receives a commission of 10% of dollar sales. Its June income statement follows.
Management expects June’s results to be repeated in July, August, and September without any changes in strategy. Management, however, has another plan. It believes that unit sales will increase at a rate of 10% each month for the next three months (beginning with July) if the kern’s selling price is reduced to $115 per unit and advertising expenses are increased by 25% and remain at that level for all three months. The cost of its product will remain at $60 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same.
Required
- Prepare budgeted income statements for each of the months of July, August, and September that show the expected results from implementing the proposed changes. Use a three- column format, with one column for each month.
Check Budgeted net income: July, $102,500; August, $150,350; September, $202,985
Analysis Component
2. Use the budgeted income statements from part 1 to recommend whether management should implement the proposed plan. Explain.
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Question 1
Syntex Corporation has the following Production Budget data:
Expected Sales in Units Units
July
August
September
October
November
December
53,000
60,000
55,000
62,000
58,000
64,000
Additional Information:
• Units on hand at the end of June equaled 20,000 units
· Ending finished goods inventory should equal 20% of next month's expected sales
REQUIRED:
• What are the units for the Production Budget in JULY?
(Enter as a whole number without decimals, commas, or a dollar sign)
Question 2
Syntex Corporation has the following Production Budget data:
Expected Sales in Units Units
July
August
September
October
November
53,000
60,000
55,000
62,000
58,000
December
64,000
Additional Information:
• Units on hand at the end of June equaled 20,000 units
· Ending finished goods inventory should equal 20% of next month's expected sales
• It takes 3.25 hours of direct labor to produce each unit
• Direct Labor Wage Rate is $18.00 per Direct Labor Hour
REQUIRED:
• What is the dollar amount of…
52
APPLICATION EXERCISE
A manager is preparing a revenue budget for next month.
The following is the manager's current month actual oper-
ating results.
I
ACTUAL OPERATING RESULTS CURRENT MONTH
Revenue
Source
Restaurant
Lounge
Banquet room
Total
Number
of Guests
3,492
388
4,395
Average Sale
per Guest
$ 20.50
12.00
28.50
$20.21
Create the revenue forecast for next month based on the
following assumptions:
49
Sales
$ 71,586
6,180
11,058
$88,824
A. Restaurant guest counts will be 3,600 with an average
sale per guest of $21.00.
124
B. Lounge guests to be served are estimated at 525 with
a 10 percent increase in average sale per guest.
C. The banquet room will serve 425 customers and
generate $12.750 in sales.
NEXT MONTH BUDGET
Revenue
Source
Restaurant
Lounge
Banquet room
Total
Number
of Guests
Review Your Leaming
Average Sale
per Guest
Q A
1. What will be the manager's revenue forecast for next
month?
3. What is the overall percentage increase in the
revenue forecast when compared to the…
QUESTION 3
Parker Corp., which operates on a calendar year, expects to sell 5140 units in January and expects sales to increase 190
units each month thereafter. Sales price is expected to stay constant at $9 per unit. What are budgeted revenues for February?
Chapter 22 Solutions
Fundamental Accounting Principles
Ch. 22 - Prob. 1DQCh. 22 - Prob. 2DQCh. 22 - Prob. 3DQCh. 22 - Prob. 4DQCh. 22 - Prob. 5DQCh. 22 - Prob. 6DQCh. 22 - Prob. 7DQCh. 22 - Prob. 8DQCh. 22 - Prob. 9DQCh. 22 - Prob. 10DQ
Ch. 22 - Apple regularly uses budgets. What is the...Ch. 22 - Prob. 12DQCh. 22 - Prob. 13DQCh. 22 - Prob. 14DQCh. 22 - Prob. 15DQCh. 22 - Prob. 1QSCh. 22 - Prob. 2QSCh. 22 - Components of a master budget C2 Identify which of...Ch. 22 - Prob. 4QSCh. 22 - Prob. 5QSCh. 22 - Prob. 6QSCh. 22 - Prob. 7QSCh. 22 - Prob. 8QSCh. 22 - Prob. 9QSCh. 22 - Prob. 10QSCh. 22 - Prob. 11QSCh. 22 - Prob. 12QSCh. 22 - Prob. 13QSCh. 22 - Prob. 14QSCh. 22 - Prob. 15QSCh. 22 - Prob. 16QSCh. 22 - Prob. 17QSCh. 22 - Prob. 18QSCh. 22 - Prob. 19QSCh. 22 - Prob. 20QSCh. 22 - Prob. 21QSCh. 22 - Prob. 22QSCh. 22 - Prob. 23QSCh. 22 - Prob. 24QSCh. 22 - Prob. 25QSCh. 22 - Prob. 26QSCh. 22 - Prob. 27QSCh. 22 - Prob. 28QSCh. 22 - Prob. 29QSCh. 22 - Prob. 30QSCh. 22 - Activity-based budgeting Activity-based budgeting...Ch. 22 - Prob. 32QSCh. 22 - Prob. 33QSCh. 22 - Exercise 22-1 Budget consequences C1 Participatory...Ch. 22 - Exercise 22-2 Master budget definitions C2 Match...Ch. 22 - Prob. 3ECh. 22 - Prob. 4ECh. 22 - Prob. 5ECh. 22 - Prob. 6ECh. 22 - Prob. 7ECh. 22 - Prob. 8ECh. 22 - Prob. 9ECh. 22 - Prob. 10ECh. 22 - Prob. 11ECh. 22 - Prob. 12ECh. 22 - Prob. 13ECh. 22 - Prob. 14ECh. 22 - Prob. 15ECh. 22 - Prob. 16ECh. 22 - Prob. 17ECh. 22 - Prob. 18ECh. 22 - Prob. 19ECh. 22 - Prob. 20ECh. 22 - Prob. 21ECh. 22 - Prob. 22ECh. 22 - Prob. 23ECh. 22 - Prob. 24ECh. 22 - Prob. 25ECh. 22 - Prob. 26ECh. 22 - Prob. 27ECh. 22 - Prob. 28ECh. 22 - Prob. 29ECh. 22 - Prob. 30ECh. 22 - Prob. 31ECh. 22 - Prob. 32ECh. 22 - Prob. 33ECh. 22 - Prob. 34ECh. 22 - Exercise 22-35
Activity-based budgeting
A1
Render...Ch. 22 - Prob. 1APSACh. 22 - Prob. 2APSACh. 22 - Problem 22-3A Manufacturing: Preparation and...Ch. 22 - Prob. 4APSACh. 22 - Prob. 5APSACh. 22 - Prob. 6APSACh. 22 - Prob. 7APSACh. 22 - Prob. 8APSACh. 22 - Problem 22-1B Manufacturing: Preparing production...Ch. 22 - Problem 22-2B
Manufacturing: Cash budget
P2
A1...Ch. 22 - Problem 22-3B Manufacturing: Preparation and...Ch. 22 - Prob. 4BPSBCh. 22 - Prob. 5BPSBCh. 22 - Prob. 6BPSBCh. 22 - Prob. 7BPSBCh. 22 - Prob. 8BPSBCh. 22 - Prob. 22SPCh. 22 - Prob. 1BTNCh. 22 - Prob. 2BTNCh. 22 - Both the budget process and budgets themselves can...Ch. 22 - The sales budget is usually the first and most...Ch. 22 - Prob. 5BTNCh. 22 - Prob. 6BTNCh. 22 - Marilyn and Michelle sells a foam mattress cover...Ch. 22 - To help understand the factors impacting a sales...Ch. 22 - Prob. 9BTN
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