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ACC/400 Week 4 Assignment from Textbook: Chapter 23 & 24 - Cloud Essays

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ACC/400 Week 4 Assignment from Textbook: Chapter 23 & 24

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Brief Exercise 23.6 – Elements of the Budget

Identify the budgets in Column B from which dollar amounts are transferred directly in constructing the budgets listed in Column A

Exercise 23.1 – Budgeting Purchases and Cash Payment

The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication:

Direct materials inventory Jan.1…….……………………………………. $73,000

Direct materials inventory Dec.31………………………………………       85,000

Direct materials budgeted for use during the year……………………… 264,000

Accounts payable to suppliers of materials Jan.1………………………    46,000

Accounts payable to suppliers of materials Dec.31……………………… 77,000

Compute the budgeted amounts for:

  1. Purchases of direct materials during the year
  2. Cash payments during the year to suppliers of materials

Exercise 23.8 – Budgeting Cash Receipts

Sales on account for the first two months of the current  year  are  budgeted as follows: Jan………………………………………  $800,000

Feb………………………………………     880,000

All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by

30 days);  collection on accounts receivable are  typically made as follows: Collections with the month of sale:

Within discount period…………………………………..   70% After discount period…………………………………….   10

Collections within the month following sale:

Within the discount period……………………………       12

After the discount period……………………………..         6

Returns, allowances, and uncollectibles……………………        2

Total………………………………………………………  100

Compute the estimated cash collections on accounts receivable for the month of

Exercise 23.9 – Budgeting an Ending  Cash Balance

On March 1 of the current  year,  Spicer Corporation compiled information to prepare a cash budget for March, April, and  May.  All of the company’s sales are made on account. The following information has been provided by Spicer’s management:

Month                                                                     Credit Sales Jan……………………………………… $300,000 (actual) Feb………………………………………      800,000 (actual) Mar………………………………………     600,000 (estimated) Apr………………………………………     700,000 (estimated) May………………………………………    800,000 (estimated)

The company’s collection activity on credit sales historically has been as follows: Collections in the month of the sale………………………………………  50%

Collections one month after the sale……………………………………… 30

Collections two months after the sale…………………………………….  15

Uncollectible accounts……………………………………………………..     5

Spicer’s total cash expenditures for March, April and May have  been estimated at $1,200,000 (an average of $400,000 per month).   Its cash balance on March 1 of the current  year  is $500,000.  No financing or investing activities are  anticipated during the second quarter. Compute Spicer’s budgeted cash balance at the ends of March, April and May.

Exercise 24.2 – Relationships among Standard Costs, Actual Costs and Cost Variances

The standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows:

Variances

Standard Cost      Unfavorable    Favorable

Direct Materials                              $85,000

Price Variance $5,000
Quantity Variance $3,000
Direct Labor $150,000
Rate  variance $2,700
Efficiency variance $6,200
Manufacturing

Overhead

$300,000
Spending variance $4,000
Volume variance $5,000

Determine the actual costs incurred during the month of May for direct materials, direct labor, and  manufacturing overhead.

Exercise 24.4 – Computing Materials Cost Variances and Volume  Variance

Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current  month:

Standard price per gram  of materials…….……………………………………. $4

Standard quantity of materials per amalgam florostat..………………   5 grams Actual materials purchased and  used in production……………… 6,000  grams Actual amalgam florostats produced during the months…………… 1,000  units Actual cost of materials purchased………………………………………  $18,000

Normal monthly output…………………………………………………..   900 units a.    Determine Gumchara’s materials price variance.

  1. Determine Gumchara’s materials quantity variance.
  2. Will Gumchara’s overhead volume variance be favorable or unfavorable? Why?

Exercise 24.6 – Computing Labor Cost Variances

Marlo Enterprises produces radon  mitigation pumps.  Information pertaining to the company’s monthly direct labor usages is provided below:

Standard labor rate per hour…….…………………………………..………. $16

Standard hours  allowed per radon  mitigation pump..………………  0.5 hours Actual pumps produced during the current  month…………..……  9,000  units Actual labor hours  worked during the current  month……………. 3,600  hours Actual labor cost for the current  month…..……………………………  $64,800

  1. Compute the company’s labor rate variance.
  2. Compute the company’s labor efficiency variance.
  3. An extremely large order of radon  mitigation pumps was filled during the month for exportation to Saudi Arabia.  Filing this order  resulted in extended hours  for many of the company’s workers.   Which labor variance reflects the extra hours  worked by Marlo’s employees?  Was their time utilized? Explain.
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Brief Exercise 23.6 – Elements of the Budget

Identify the budgets in Column B from which dollar amounts are transferred directly in constructing the budgets listed in Column A

Exercise 23.1 – Budgeting Purchases and Cash Payment

The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication:

Direct materials inventory Jan.1…….……………………………………. $73,000

Direct materials inventory Dec.31………………………………………       85,000

Direct materials budgeted for use during the year……………………… 264,000

Accounts payable to suppliers of materials Jan.1………………………    46,000

Accounts payable to suppliers of materials Dec.31……………………… 77,000

Compute the budgeted amounts for:

  1. Purchases of direct materials during the year
  2. Cash payments during the year to suppliers of materials

Exercise 23.8 – Budgeting Cash Receipts

Sales on account for the first two months of the current  year  are  budgeted as follows: Jan………………………………………  $800,000

Feb………………………………………     880,000

All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by

30 days);  collection on accounts receivable are  typically made as follows: Collections with the month of sale:

Within discount period…………………………………..   70% After discount period…………………………………….   10

Collections within the month following sale:

Within the discount period……………………………       12

After the discount period……………………………..         6

Returns, allowances, and uncollectibles……………………        2

Total………………………………………………………  100

Compute the estimated cash collections on accounts receivable for the month of

Exercise 23.9 – Budgeting an Ending  Cash Balance

On March 1 of the current  year,  Spicer Corporation compiled information to prepare a cash budget for March, April, and  May.  All of the company’s sales are made on account. The following information has been provided by Spicer’s management:

Month                                                                     Credit Sales Jan……………………………………… $300,000 (actual) Feb………………………………………      800,000 (actual) Mar………………………………………     600,000 (estimated) Apr………………………………………     700,000 (estimated) May………………………………………    800,000 (estimated)

The company’s collection activity on credit sales historically has been as follows: Collections in the month of the sale………………………………………  50%

Collections one month after the sale……………………………………… 30

Collections two months after the sale…………………………………….  15

Uncollectible accounts……………………………………………………..     5

Spicer’s total cash expenditures for March, April and May have  been estimated at $1,200,000 (an average of $400,000 per month).   Its cash balance on March 1 of the current  year  is $500,000.  No financing or investing activities are  anticipated during the second quarter. Compute Spicer’s budgeted cash balance at the ends of March, April and May.

Exercise 24.2 – Relationships among Standard Costs, Actual Costs and Cost Variances

The standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows:

Variances

Standard Cost      Unfavorable    Favorable

Direct Materials                              $85,000

Price Variance   $5,000  
Quantity Variance     $3,000
Direct Labor $150,000    
Rate  variance     $2,700
Efficiency variance   $6,200  
Manufacturing

Overhead

 

$300,000

   
Spending variance     $4,000
Volume variance     $5,000

Determine the actual costs incurred during the month of May for direct materials, direct labor, and  manufacturing overhead.

Exercise 24.4 – Computing Materials Cost Variances and Volume  Variance

Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current  month:

Standard price per gram  of materials…….……………………………………. $4

Standard quantity of materials per amalgam florostat..………………   5 grams Actual materials purchased and  used in production……………… 6,000  grams Actual amalgam florostats produced during the months…………… 1,000  units Actual cost of materials purchased………………………………………  $18,000

Normal monthly output…………………………………………………..   900 units a.    Determine Gumchara’s materials price variance.

  1. Determine Gumchara’s materials quantity variance.
  2. Will Gumchara’s overhead volume variance be favorable or unfavorable? Why?

Exercise 24.6 – Computing Labor Cost Variances

Marlo Enterprises produces radon  mitigation pumps.  Information pertaining to the company’s monthly direct labor usages is provided below:

Standard labor rate per hour…….…………………………………..………. $16

Standard hours  allowed per radon  mitigation pump..………………  0.5 hours Actual pumps produced during the current  month…………..……  9,000  units Actual labor hours  worked during the current  month……………. 3,600  hours Actual labor cost for the current  month…..……………………………  $64,800

  1. Compute the company’s labor rate variance.
  2. Compute the company’s labor efficiency variance.
  3. An extremely large order of radon  mitigation pumps was filled during the month for exportation to Saudi Arabia.  Filing this order  resulted in extended hours  for many of the company’s workers.   Which labor variance reflects the extra hours  worked by Marlo’s employees?  Was their time utilized? Explain.

 

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