GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
8th Edition
ISBN: 9781260259179
Author: BREWER
Publisher: MCG
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Chapter 9, Problem 1E
Prepare a Flexible Budget
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area The company’s planning budget for May appears below:
During May, the company’s actual activity was 105 diving-hours.
Required:
Using Exhibit 9−5 as your guide, prepare a flexible budget for May.
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Prepare a Flexible Budget Performance Report
Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:
The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.
Required:
1. Using Exhibit 9–8 as your guide, prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances.
2. Which of the variances should be of concern to management? Explain.
Exhibit 9–8 Performance Report Combining Activity Variances with Revenue and Spending Variances
Exercise 9-1 (Algo) Prepare a Flexible Budget [LO9-1]
Puget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May
appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (g)
Revenue ($460.00g)
Expenses:
Wages and salaries ($11,200 + $128.00q)
Supplies ($4.00q)
Equipment rental ($2,400 + $22.00q)
Insurance ($3,900)
Miscellaneous ($500 + $1.44q)
Total expenses
Net operating income
250
$ 115,000
43,200
1,000
7,900
3,900
860
56,860
$ 58,140
During May, the company's actual activity was 240 diving-hours.
Preparing a flexible budget and performance report
This continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:
During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets;
Requirements
Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.
Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.
What insights can the management of Piedmont Computer Company draw from the performance report?
Chapter 9 Solutions
GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
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