Question 1: Score 0/4
Your response
Correct response
Exercise 9-1 Schedule of Expected Cash Collections [LO2]
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as
shown in the company's sales budget for the second quarter given below:
Exercise 9-1 Schedule of Expected Cash Collections [LO2]
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as
shown in the company's sales budget for the second quarter given below:
Budgeted sales (all on account)
April
$ 300,000
May
$ 500,000
June
$ 200,000
Total
$ 1,000,000
Budgeted sales (all on account)
April
$ 300,000
May
$ 500,000
June
$ 200,000
Total
$ 1,000,000
From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another
70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad
debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.
From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another
70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad
debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.
Requirement 1:
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells
blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Requirement 1:
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells
blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
April
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$ 1 (0%)
February sales
March sales
April sales
May sales
June sales
Total cash collections
May
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$ 1 (0%)
June
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$ 1 (0%)
Total
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$ 1 (0%)
February sales
March sales
April sales
May sales
June sales
Total cash collections
April
23,000
182,000
60,000
0
0
$ 265,000
$
May
0
26,000
210,000
100,000
0
$ 336,000
$
June
0
0
30,000
350,000
40,000
$ 420,000
$
Total
23,000
208,000
300,000
450,000
40,000
$ 1,021,000
$
Total grade: 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24
+ 0.0×1/24 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
April
May
June
Total
February sales:
$230,000 × 10%
March Sales:
$260,000 × 70%, 10%
April sales:
$300,000 × 20%, 70%, 10%
May sales:
$500,000 × 20%, 70%
June sales:
$200,000 × 20%
$ 23,000
$
23,000
182,000
$ 26,000
208,000
60,000
210,000
$ 30,000
300,000
100,000
350,000
450,000
40,000
40,000
Total cash collections
$ 265,000
$ 336,000
$ 420,000
$ 1,021,000
Observe that even though sales peak in May, cash collections peak in June. This occurs because the bulk of the company's
customers pay in the month following sale. The lag in collections that this creates is even more pronounced in some
companies. Indeed, it is not unusual for a company to have the least cash available in the months when sales are greatest.
Your response
Correct response
Requirement 2:
Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that
date. (Omit the "$" sign in your response.)
Requirement 2:
Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that
date. (Omit the "$" sign in your response.)
$ 1 (0%)
Accounts receivable
$ 210,000
Accounts receivable
Total grade: 0.0×1/1 = 0%
Feedback:
Accounts receivable at June 30:
From May sales: $500,000 × 10%
From June sales: $200,000 × (70% + 10%)
Total accounts receivable at June 30
$ 50,000
160,000
$ 210,000
Question 2: Score 0/4
Your response
Exercise 9-2 Production Budget [LO3]
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April
May
June
July
Sales
in Units
50,000
75,000
90,000
80,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that
end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000
units.
Required:
Show the number of units to be produced each month and for the quarter in total.
Required
Production
Correct response
Exercise 9-2 Production Budget [LO3]
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April
May
June
July
Sales
in Units
50,000
75,000
90,000
80,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that
end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000
units.
Required:
Show the number of units to be produced each month and for the quarter in total.
April
May
June
Quarter
1
1
1
1
(0%)
(0%)
(0%)
(0%)
April
May
June
Quarter
Required
Production
52,500
76,500
89,000
218,000
Total grade: 0.0×1/4 + 0.0×1/4 + 0.0×1/4 + 0.0×1/4 = 0% + 0% + 0% + 0%
Feedback:
Budgeted sales in units
Add desired ending inventory*
Total needs
Less beginning inventory
Required production
April
50,000
7,500
57,500
5,000
52,500
May
75,000
9,000
84,000
7,500
76,500
June
90,000
8,000
98,000
9,000
89,000
Quarter
215,000
8,000
223,000
5,000
218,000
*10% of the following month's sales in units.
Question 3: Score 0/4
Your response
Correct response
Exercise 9-3 Direct Materials Budget [LO4]
Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in
western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the
rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
Budgeted production, in bottles
First
60,000
Year 2
Second
Third
90,000
150,000
Fourth
100,000
Exercise 9-3 Direct Materials Budget [LO4]
Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in
western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the
rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
Year 3
First
70,000
Budgeted production, in bottles
Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a
precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the
following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount
of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)
Production needs—grams
Less (0%) : desired ending inventory—grams
Total needs—grams
Add (0%) : beginning inventory—grams
First
1
1
1
1
(0%)
(0%)
(0%)
(0%)
Second
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Year 2
Third
1
1
1
1
First
60,000
Year 2
Second
Third
90,000
150,000
Fourth
100,000
Year 3
First
70,000
Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a
precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the
following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the
amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)
Fourth
Year
(0%)
1 (0%)
1 (0%)
Year 2
(0%)
1 (0%)
1 (0%)
First
Second
Third
(0%)
1 (0%)
1 (0%)
180,000
270,000
450,000
(0%)Production needs—grams
1 (0%)
1 (0%)
Fourth
300,000
1 (0%)
1 (0%)
Raw materials to be purchased—grams
Cost of raw materials to be purchased
1 (0%)
1 (0%)
1 (0%)Add : desired ending
1 (0%)inventory—grams
1 (0%)
1 (0%)Total needs—grams
1 (0%)
1 (0%)
Less : beginning inventory—grams
Raw materials to be purchased—grams
54,000
234,000
36,000
198,000
90,000
360,000
54,000
306,000
60,000
510,000
90,000
420,000
42,000
342,000
60,000
282,000
Cost of raw materials to be purchased
29,700
45,900
63,000
42,300
Total grade: 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 +
0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
+ 0%
Feedback:
Year 2
Second
First
Required production in bottles
Number of grams per bottle
Total production needs—grams
Third
60,000
90,000
150,000
× 3
× 3
× 3
180,000
270,000
450,000
Year 3
First
70,00
Fourth
100,000
0
× 3
300,000
× 3
210,00
0
Question 4: Score 0/4
Your response
Correct response
Exercise 9-4 Direct Labor Budget [LO5]
The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for
the upcoming fiscal year:
Exercise 9-4 Direct Labor Budget [LO5]
The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for
the upcoming fiscal year:
Units to be produced
1st Quarter
8,000
2nd Quarter
6,500
3rd Quarter
7,000
4th Quarter
7,500
Units to be produced
1st Quarter
8,000
2nd Quarter
6,500
3rd Quarter
7,000
4th Quarter
7,500
Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.
Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.
Requirement 1:
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is
adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit
the "$" sign in your response.)
Requirement 1:
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is
adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit
the "$" sign in your response.)
1st Quarter
2nd Quarter
3rd Quarter
Total direct
labor cost
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
1st Quarter
2nd Quarter
Total
direct
labor cost
$ 33,600
$ 27,300
4th Quarter
Year
$ 1 (0%)
$ 1 (0%)
3rd Quarter
4th Quarter
Year
$ 29,400
$ 31,500
$ 121,800
Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0%
Feedback:
Assuming that the direct labor workforce is adjusted each quarter, the direct labor budget is:
1st
Quarter
8,000
× 0.35
2,800
× $12.00
$ 33,600
Units to be produced
Direct labor time per unit (hours)
Total direct labor hours needed
Direct labor cost per hour
Total direct labor cost
2nd
Quarter
6,500
× 0.35
2,275
× $12.00
$ 27,300
3rd
Quarter
7,000
× 0.35
2,450
× $12.00
$ 29,400
4th
Quarter
7,500
× 0.35
2,625
× $12.00
$ 31,500
Year
29,000
× 0.35
10,150
× $12.00
$ 121,800
Your response
Correct response
Requirement 2:
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not
adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who
are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less
than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are
paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Total direct
labor cost
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0%
Feedback:
Assuming that the direct labor workforce is not adjusted each quarter and that overtime wages are paid, the direct labor
budget is:
Units to be produced
Direct labor time per unit (hours)
Total direct labor hours needed
Requirement 2:
Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not
adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who
are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less
than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are
paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)
1st
Quarter
8,000
× 0.35
2,800
2nd
Quarter
6,500
× 0.35
2,275
3rd
Quarter
7,000
× 0.35
2,450
4th
Quarter
7,500
× 0.35
2,625
Year
Total
direct
labor cost
$ 34,800
$ 31,200
$ 31,200
$ 31,650
$ 128,850
Regular hours paid
Overtime hours paid
Wages for regular hours (@ $12.00 per hour)
Overtime wages (@ 1.5 hours × $12.00 per hour)
Total direct labor cost
2,600
200
$ 31,200
3,600
$ 34,800
2,600
0
$ 31,200
0
$ 31,200
2,600
0
$ 31,200
0
$ 31,200
2,600
25
$ 31,200
450
$ 31,650
$ 124,800
4,050
$ 128,850
Question 5: Score 0/4
Your response
Correct response
Exercise 9-5 Manufacturing Overhead Budget [LO6]
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning
budgeted direct labor-hours:
Exercise 9-5 Manufacturing Overhead Budget [LO6]
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning
budgeted direct labor-hours:
Budgeted direct labor-hours
1st Quarter
8,000
2nd Quarter
8,200
3rd Quarter
8,500
4th Quarter
7,800
Budgeted direct labor-hours
1st Quarter
8,000
2nd Quarter
8,200
3rd Quarter
8,500
4th Quarter
7,800
The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing
overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is
$16,000 per quarter.
The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing
overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is
$16,000 per quarter.
Requirement 1:
Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your
response.)
Requirement 1:
Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your
response.)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Cash disbursements
for manufacturing
overhead
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
$ 1 (0%)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0%
Feedback:
Budgeted direct labor-hours
Variable overhead rate
Variable manufacturing overhead
Yuvwell Corporation
Manufacturing Overhead Budget
1st
2nd
Quarter
Quarter
8,000
8,200
$ × 3.25 $ × 3.25
$ 26,000 $ 26,650
3rd
Quarter
8,500
$ × 3.25
$ 27,625
4th
Quarter
7,800
$ × 3.25
$ 25,350
Year
32,500
$ × 3.25
$ 105,625
Cash disbursements
for manufacturing
overhead
$ 58,000
$ 58,650
$ 59,625
$ 57,350
$ 233,625
Fixed manufacturing overhead
Total manufacturing overhead
Less depreciation
Cash disbursements for manufacturing overhead
48,000
74,000
16,000
$ 58,000
48,000
74,650
16,000
$ 58,650
48,000
75,625
16,000
$ 59,625
48,000
73,350
16,000
$ 57,350
192,000
297,625
64,000
$ 233,625
Your response
Correct response
Requirement 2:
Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the
upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Requirement 2:
Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the
upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Manufacturing overhead rate for the year
$ 1 (0%)
Manufacturing overhead rate for the year
$
9.16
Total grade: 0.0×1/1 = 0%
Feedback:
Total budgeted manufacturing overhead for the year (a)
Total budgeted direct labor-hours for the year (b)
Manufacturing overhead rate for the year (a) ÷ (b)
$ 297,625
32,500
$
9.16
Question 6: Score 0/4
Your response
Correct response
Exercise 9-6 Selling and Administrative Expense Budget [LO7]
The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:
Budgeted unit sales
1st Quarter
15,000
2nd Quarter
16,000
3rd Quarter
14,000
4th Quarter
13,000
The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include
advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter.
In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally,
property taxes of $8,000 will be paid in the second quarter.
Exercise 9-6 Selling and Administrative Expense Budget [LO7]
The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:
Budgeted unit sales
1st Quarter
15,000
2nd Quarter
16,000
3rd Quarter
14,000
4th Quarter
13,000
The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include
advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter.
In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally,
property taxes of $8,000 will be paid in the second quarter.
Required:
Required:
Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive
values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Weller Company
Selling and Administrative Expense Budget
Weller Company
Selling and Administrative Expense Budget
1st
Variable expense
Fixed selling and administrative expenses:
Advertising
Executive salaries
Insurance
Property taxes
Depreciation
Total fixed selling and administrative
expenses
Total selling and administrative expenses
Less depreciation
Cash disbursements for selling and
administrative expenses
2nd
Quarter
1 (0%)
$
1
1
1
1
1
Quarter
1 (0%)
(0%)
(0%)
(0%)
(0%)
(0%)
1
1
1
1
1
$
(0%)
(0%)
(0%)
(0%)
(0%)
4th
Quarter
1 (0%)
1
1
1
1
1
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
1 (0%)
$
$
(0%)
(0%)
(0%)
(0%)
(0%)
1 (0%)
1 (0%)
$
$
3rd
1 (0%)
$
1st
Year
Quarter
1 (0%)
Variable$expense 1 (0%)
Fixed selling and administrative expenses:
1 (0%)Advertising 1 (0%)
1 (0%)Executive salaries
1 (0%)
1 (0%)Insurance
1 (0%)
1 (0%)Property taxes1 (0%)
1 (0%)Depreciation 1 (0%)
Total fixed selling and administrative
1 (0%)
1 (0%)
expenses
1 (0%)
1 (0%)
Total selling and administrative
expenses
1 (0%)
Less depreciation 1 (0%)
Cash disbursements for selling and
1 (0%)
1 (0%)
$
administrative expenses
$
$
2nd
Quarter
37,500
$
3rd
Quarter
40,000
$
4th
Quarter
35,000
$
Quarter
32,500
$
8,000
35,000
5,000
0
20,000
8,000
35,000
0
8,000
20,000
8,000
35,000
5,000
0
20,000
8,000
35,000
0
0
20,000
3
14
1
68,000
71,000
68,000
63,000
27
105,500
20,000
111,000
20,000
103,000
20,000
95,500
20,000
41
8
85,500
$
91,000
$
83,000
$
75,500
8
$
Total grade: 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 +
0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 +
0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
+ 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Budgeted unit sales
Variable selling and administrative expense
per unit
Variable expense
1st
Quarter
15,000
2nd
Quarter
16,000
3rd
Quarter
14,000
4th
Quarter
13,000
Year
58,000
$ × 2.50
$
× 2.50
$ × 2.50
$ × 2.50
$
$ 37,500
$ 40,000
$ 35,000
$ 32,500
$ 145,000
× 2.50
Question 7: Score 0/4
Your response
Correct response
Exercise 9-7 Cash Budget [LO8]
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following
summary of its budgeted cash flows:
Exercise 9-7 Cash Budget [LO8]
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following
summary of its budgeted cash flows:
Total cash receipts
Total cash disbursements
1st Quarter
$ 180,000
$ 260,000
2nd Quarter
$ 330,000
$ 230,000
3rd Quarter
$ 210,000
$ 220,000
4th Quarter
$ 230,000
$ 240,000
The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash
balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may
Total cash receipts
Total cash disbursements
1st Quarter
$ 180,000
$ 260,000
Year
14
2nd Quarter
$ 330,000
$ 230,000
3rd Quarter
$ 210,000
$ 220,000
4th Quarter
$ 230,000
$ 240,000
The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash
33
borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter.
Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total
financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank
- be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Cash balance, beginning
Total cash receipts
Total cash available
Less total cash disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings (at beginnings of quarters)
Repayments (at ends of quarters)
Interest
Total financing
Cash balance, ending
Garden Depot
Cash Budget
1st Quarter
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
2nd Quarter
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
3rd Quarter
$ 1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company
may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any
quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not
compounded.
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total
financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells
blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
4th Quarter
Year
$ 1 (0%)
$ 1 (0%)
Garden Depot
1 (0%)
1 (0%)
Cash Budget
1 (0%)
1 (0%)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
1 Cash
(0%) balance,1beginning
(0%)
$ 20,000
$ 10,000
$ 35,800
$ 25,800
1 Total
(0%)cash receipts
1 (0%)
180,000
330,000
210,000
230,000
200,000
340,000
245,800
255,800
1 Total
(0%)cash available
1 (0%)
260,000
230,000
220,000
240,000
Less
total
cash
disbursements
1 (0%)
1 (0%)
1 Excess
(0%) (deficiency)
1 (0%)
-60,000
110,000
25,800
15,800
of cash available over disbursements
1 Financing:
(0%)
1 (0%)
$ 1 (0%)
$ 1(at(0%)
70,000
0
0
0
Borrowings
beginnings of quarters)
0
-70,000
0
0
Repayments (at ends of quarters)
0
-4,200
0
0
Interest
70,000
-74,200
0
0
Total financing
Cash balance, ending
$ 10,000
$ 35,800
$ 25,800
$ 15,800
Total grade: 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 +
0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 + 0.0×1/50 +
0.0×1/50 + 0.0×1/50 + 0.0×1/50 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% +
0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Borrowings (at beginnings of quarters):
Since the deficiency of cash available over disbursements is $60,000, the company must borrow $70,000 to maintain the
desired ending cash balance of $10,000.
Interest:
$70,000 × 3% × 2 = $4,200.
Question 8: Score 0.28/4
Your response
Exercise 9-8 Budgeted Income Statement [LO9]
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the
following summary data to use in its annual budgeting process:
Correct response
Exercise 9-8 Budgeted Income Statement [LO9]
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the
following summary data to use in its annual budgeting process:
$
$
Year
20,000
950,000
970,000
950,000
20,000
70,000
-70,000
-4,200
-4,200
15,800
Budgeted unit sales
Selling price per unit
Cost per unit
Variable selling and administrative expenses (per unit)
Fixed selling and administrative expenses (per year)
Interest expense for the year
460
$ 1,950
$ 1,575
$
75
$ 105,000
$ 14,000
Required:
Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts
as positive values. Omit the "$" sign in your response.)
Gig Harbor Boating
Budgeted Income Statement
Interest expense (0%)
Selling and administrative expenses (0%)
Gross profit (7%)
Notes payable (0%)
Net operating loss (0%)
Notes payable (0%)
Net loss (0%)
$
$
1
1
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Budgeted unit sales
Selling price per unit
Cost per unit
Variable selling and administrative expenses (per unit)
Fixed selling and administrative expenses (per year)
Interest expense for the year
460
$ 1,950
$ 1,575
$
75
$ 105,000
$ 14,000
Required:
Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts
as positive values. Omit the "$" sign in your response.)
Gig Harbor Boating
Budgeted Income Statement
Sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Net operating income
Interest expense
Net income
$
$
897,000
724,500
172,500
139,500
33,000
14,000
19,000
Total grade: 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 1.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 + 0.0×1/14 = 0% + 0% + 0% + 0% + 7% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Sales (460 units × $1,950 per unit) = $897,000
Cost of goods sold (460 units × $1,575 per unit) = $724,500
Selling and administrative expenses (460 units × $75 per unit) + $105,000 = $139,500.
Question 9: Score 0.38/4
Your response
Exercise 9-9 Budgeted Balance Sheet [LO10]
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use
in preparing its budgeted balance sheet for next year:
Cash
Accounts receivable
Supplies inventory
Equipment
Accumulated depreciation
Accounts payable
Ending
Balances
?
$ 8,100
$ 3,200
$ 34,000
$ 16,000
$ 1,800
Correct response
Exercise 9-9 Budgeted Balance Sheet [LO10]
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use
in preparing its budgeted balance sheet for next year:
Cash
Accounts receivable
Supplies inventory
Equipment
Accumulated depreciation
Ending
Balances
?
$ 8,100
$ 3,200
$ 34,000
$ 16,000
Common stock
Retained earnings
$ 5,000
?
Accounts payable
Common stock
Retained earnings
The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to
be $4,800.
Required:
Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the
"$" sign in your response.)
Assets
Current assets:
Cash (5%)
Common stock (0%)
Retained earnings (0%)
Total current assets
Plant and equipment:
Building (0%)
Retained earnings (0%)
Plant and equipment, net
Total assets
$
1 (0%)
1 (0%)
1 (0%)
$
Mecca Copy
Budgeted Balance Sheet
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable (5%)
Stockholders' equity:
Supplies inventory (0%)
1 (0%)
Equipment (0%)
Total stockholders' equity
1 (0%)
1 (0%)
$
1 (0%)
1 (0%)
Total liabilities and stockholders' equity
$ 1,800
$ 5,000
?
The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted
to be $4,800.
Required:
Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the
"$" sign in your response.)
1 (0%)
Assets
1 (0%)
$ assets:
Current
1 (0%)
Cash
Accounts receivable
Supplies inventory
Total current assets
Plant and equipment:
$
Equipment
Accumulated depreciation
Plant and equipment, net
Total assets
$
1 (0%)
12,200
8,100
3,200
$
1 (0%)
Mecca Copy
Budgeted Balance Sheet
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Stockholders' equity:
Common stock
23,500
Retained earnings
Total stockholders' equity
$
34,000
-16,000
$
18,000
41,500
Total liabilities and stockholders' equity
Total grade: 1.0×1/21 + 0.0×1/21 + 1.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 + 0.0×1/21 = 5% + 0% + 5% + 0% + 0%
+ 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Cash: Plug figure.
Retained earnings, beginning balance
Add net income
Deduct dividends
Retained earnings, ending balance
$ 28,000
11,500
39,500
4,800
$ 34,700
Question 10: Score 0/4
Your response
Correct response
5,000
34,700
Exercise 9-10 Cash Budget Analysis [LO8]
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance
of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars.
Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other
amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your
response.)
1
Cash balance, beginning
Add collections from customers
Total cash available
Less disbursements:
Purchases of inventory
Operating expenses
Equipment purchases
Dividends
Total disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments (including interest)*
Total financing
Cash balance, ending
$
6
1 (0%)
71
35
1 (0%)
8
2
1 (0%)
-2
1
1
1
$ 1
(0%)
(0%)
(0%)
(0%)
Exercise 9-10 Cash Budget Analysis [LO8]
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance
of at least $5,000 to start each quarter. Fill in the missing amounts in the table. (Enter your answers in thousands of dollars.
Show deficiencies, repayments, and total financing preceded by a minus sign when appropriate. Enter all other
amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your
response.)
Quarter
Quarter
2
3
4
Year
Cash balance,
beginning
1 (0%) from
(0%) $ 1 (0%)
$ 1 (0%) Add
$ collections
$ 1 customers
1 (0%)
1 (0%)
96
323
Total cash available
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Less disbursements:
Purchases
1 (0%) of inventory35
1 (0%)
45
1 (0%)
30
Operating
30 expenses
113
1 (0%)
8
10 purchases
36
Equipment
1 (0%)
2
2
Dividends2
1 (0%)
1 (0%)
1 (0%)
85
Total disbursements
1 (0%)
1 (0%)
1 (0%)
11
Excess (deficiency) of cash available over disbursements
1 (0%)
1 (0%)
1 (0%)
15 Financing:
Borrowings
1 (0%)
1 (0%)
1 (0%)
-17
1 (0%)
1 (0%) (including
1 (0%)interest)*
1 (0%)
Repayments
1 (0%) Total
(0%) $ 1 (0%) $ 1 (0%)
$ 1financing
1
$
Cash balance, ending
*Interest will total $1,000 for the year.
$
2
6
65
71
$
3
5
70
75
$
35
28
8
2
73
-2
45
30
8
2
85
-10
48
30
10
2
90
11
7
0
7
5
15
0
15
5
0
-6
-6
5
$
*Interest will total $1,000 for the year.
Total grade: 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 +
0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 + 0.0×1/42 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% +
0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Question 11: Score 0/4
Your response
Correct response
Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4]
The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year:
Budgeted unit sales
1st Quarter
8,000
2nd Quarter
7,000
3rd Quarter
6,000
4th Quarter
7,000
The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending
finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished
Exercise 9-11 Production and Direct Materials Budgets [LO3, LO4]
The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year:
Budgeted unit sales
1st Quarter
8,000
2nd Quarter
7,000
3rd Quarter
6,000
5
96
101
4th Quarter
7,000
The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending
finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished
$
$
goods inventory for the fourth quarter is 1,700 units.
In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 pounds and the beginning
accounts payable for the first quarter is budgeted to be $14,820.
Each unit requires 2 pounds of raw material that costs $4.00 per pound. Management desires to end each quarter with
an inventory of raw materials equal to 20% of the following quarter's production needs. The desired ending inventory for the
fourth quarter is 3,140 pounds. Management plans to pay for 75% of raw material purchases in the quarter acquired and
25% in the following quarter.
goods inventory for the fourth quarter is 1,700 units.
In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,120 pounds and the beginning
accounts payable for the first quarter is budgeted to be $14,820.
Each unit requires 2 pounds of raw material that costs $4.00 per pound. Management desires to end each quarter with
an inventory of raw materials equal to 20% of the following quarter's production needs. The desired ending inventory for the
fourth quarter is 3,140 pounds. Management plans to pay for 75% of raw material purchases in the quarter acquired and
25% in the following quarter.
Requirement 1:
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Requirement 1:
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Gaeber Industries
Production Budget
1st Quarter
2nd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Budgeted unit sales
Add desired ending inventory
Total units needed
Less beginning inventory
Required production
3rd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
4th Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Year
1 (0%)
Budgeted
unit sales
1 (0%)ending inventory
Add desired
(0%)
Total 1units
needed
(0%) inventory
Less 1beginning
1 (0%)
Required
production
Gaeber Industries
Production Budget
1st Quarter
2nd Quarter
8,000
7,000
1,400
1,200
9,400
8,200
1,600
1,400
7,800
6,800
3rd Quarter
6,000
1,400
7,400
1,200
6,200
4th Quarter
7,000
1,700
8,700
1,400
7,300
Year
28,000
1,700
29,700
1,600
28,100
Total grade: 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 +
0.0×1/25 + 0.0×1/25 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Your response
Correct response
Requirement 2:
(a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Gaeber Industries
Direct Materials Budget
1st Quarter
2nd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
$
Production needs
Add desired ending inventory
Total needs
Less beginning inventory
Raw materials to be purchased
Cost of raw materials to be purchased
3rd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
Requirement 2:
(a) Prepare the company's direct materials budget. (Input all amounts as positive values. Omit the "$" sign in your
response.)
4th Quarter
Year
1 (0%)
1 (0%)
Production
needs
1 (0%)ending inventory
1 (0%)
Add desired
(0%)
1 (0%)
Total 1needs
(0%) inventory 1 (0%)
Less 1
beginning
1 (0%) to be purchased
1 (0%)
Raw materials
1 raw
(0%)
(0%)
$ Cost of
materials
$ to be1 purchased
Gaeber Industries
Direct Materials Budget
1st Quarter
2nd Quarter
15,600
13,600
2,720
2,480
18,320
16,080
3,120
2,720
15,200
13,360
60,800
53,440
$
$
3rd Quarter
12,400
2,920
15,320
2,480
12,840
51,360
$
4th Quarter
14,600
3,140
17,740
2,920
14,820
59,280
$
Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30
+ 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Required production
Raw materials per unit
1st
Quarter
7,800
×2
2nd
Quarter
6,800
×2
3rd
Quarter
6,200
×2
4th
Quarter
7,300
×2
Year
28,100
×2
Production needs
15,600
13,600
12,400
14,600
56,200
Your response
Correct response
(b) Prepare the schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. (Leave
no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Accounts payable, beginning balance
1st Quarter purchases
2nd Quarter purchases
3rd purchases
4th Quarter purchases
Total cash disbursements for materials
(b) Prepare the schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. (Leave
no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Gaeber Industries
Schedule of Expected Cash Disbursements for Materials
st
1 Quarter
2nd Quarter
3rd Quarter
1 (0%) $
1 (0%) $
1 (0%)
$
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%) $
1 (0%) $
1 (0%)
$
th
4 Quarter
Year
1 (0%)
1 (0%)
Accounts
payable,
$ beginning
balance
1 (0%)
1 (0%)
1st Quarter
purchases
1 (0%)
1 (0%)
2nd Quarter
purchases
1 (0%)
1 (0%)
3rd purchases
1 (0%)
1 (0%)
4th Quarter
purchases
(0%)
1for(0%)
$ Total 1cash
disbursements
$
materials
$
Gaeber Industries
Schedule of Expected Cash Disbursements for Materials
st
1 Quarter
2nd Quarter
3rd Quarter
14,820
0
0
$
$
$
45,600
15,200
0
0
40,080
13,360
0
0
38,520
0
0
0
60,420
55,280
51,880
$
$
$
4th Quarter
$
$
0
0
0
12,840
44,460
57,300
Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 +
0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Question 12: Score 0/4
Your response
Correct response
Exercise 9-14 Direct Labor and Manufacturing Overhead Budgets [LO5, LO6]
The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter
for the upcoming fiscal year:
Exercise 9-14 Direct Labor and Manufacturing Overhead Budgets [LO5, LO6]
The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter
for the upcoming fiscal year:
Units to be produced
1st Quarter
12,000
2nd Quarter
14,000
3rd Quarter
13,000
4th Quarter
11,000
Units to be produced
1st Quarter
12,000
2nd Quarter
14,000
3rd Quarter
13,000
4th Quarter
11,000
Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.
In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is
$80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.
Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.
In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is
$80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.
Requirement 1:
Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted
each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$"
sign in your response.)
Requirement 1:
Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted
each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$"
sign in your response.)
Raredon Corporation
Direct Labor Budget
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Raredon Corporation
Direct Labor Budget
1st quarter
2nd quarter
3rd quarter
4th quarter
Year
Total direct labor-hours needed
Total direct labor cost
1 (0%)
1 (0%)
$
1 (0%)
1 (0%)
$
1 (0%)
1 (0%)
$
1 (0%)
1 (0%) needed
Total direct labor-hours
1 (0%)
1 (0%)
Total $
direct labor
cost
$
8,400
88,200
$
9,800
102,900
$
9,100
95,550
$
7,700
80,850
$
35,000
367,500
$
Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Units to be produced
Direct labor time per unit (hours)
Total direct labor-hours needed
Direct labor cost per hour
Total direct labor cost
Raredon Corporation
Direct Labor Budget
1st
quarter
12,000
×0.70
8,400
$ 10.50
$ 88,200
3rd
2nd quarter
quarter
14,000
13,000
×0.70
×0.70
9,800
9,100
$ 10.50 $ 10.50
$ 102,900 $ 95,550
4th
quarter
11,000
×0.70
7,700
$ 10.50
$ 80,850
Year
50,000
×0.70
35,000
$ 10.50
$ 367,500
Your response
Correct response
Requirement 2:
Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.)
Variable manufacturing overhead
Fixed manufacturing overhead
Total manufacturing overhead
Cash disbursements for
manufacturing overhead
Raredon Corporation
Manufacturing Overhead Budget
1st quarter
2nd quarter
1 (0%)
1 (0%)
$
$
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
1 (0%)
$
1 (0%)
Requirement 2:
Prepare the company's manufacturing overhead budget. (Omit the "$" sign in your response.)
$
3rd quarter
1 (0%)
1 (0%)
1 (0%)
$
1 (0%)
4th quarter
Year
1 Variable
(0%) manufacturing
1 (0%)overhead
$
1 Fixed
(0%) manufacturing
1 (0%)
overhead
1 Total
(0%) manufacturing
1 (0%)
overhead
Cash disbursements for
1 (0%)
1overhead
(0%)
$
manufacturing
$
$
Raredon Corporation
Manufacturing Overhead Budget
1st quarter
2nd quarter
12,600
14,700
$
$
80,000
80,000
92,600
94,700
$
70,600
$
72,700
$
$
3rd quarter
13,650
80,000
93,650
71,650
$
$
4th quarter
11,550
80,000
91,550
69,550
Total grade: 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 = 0% + 0% + 0% + 0% + 0% + 0%
+ 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Budgeted direct labor-hours
Variable overhead rate
Variable manufacturing overhead
Fixed manufacturing overhead
Total manufacturing overhead
Less depreciation
Cash disbursements for
Raredon Corporation
Manufacturing Overhead Budget
1st
2nd
quarter
quarter
8,400
9,800
$ ×1.50
$ ×1.50
$ 12,600
$ 14,700
80,600
80,000
92,600
94,700
22,000
22,000
$ 70,600
$ 72,700
3rd
quarter
9,100
$ ×1.50
$ 13,650
80,000
93,650
22,000
$ 71,650
4th
quarter
7,700
$ ×1.50
$ 11,550
80,000
91,550
22,000
$ 69,550
Year
35,000
$ ×1.50
$ 52,500
320,000
372,500
88,000
$ 284,500
$
$
Year
52,50
320,00
372,50
284,50
manufacturing overhead
Question 13: Score 0/4
Your response
Correct response
Exercise 9-12 Sales and Production Budgets [LO2, LO3]
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales
are on account):
Budgeted unit sales
1st Quarter
11,000
2nd Quarter
12,000
3rd Quarter
14,000
4th Quarter
13,000
Exercise 9-12 Sales and Production Budgets [LO2, LO3]
The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales
are on account):
Budgeted unit sales
1st Quarter
11,000
2nd Quarter
12,000
3rd Quarter
14,000
4th Quarter
13,000
The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in
which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning
balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200.
The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending
finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods
inventory for the fourth quarter is 1,850 units.
The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in
which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning
balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200.
The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending
finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods
inventory for the fourth quarter is 1,850 units.
Requirement 1:
(a) Calculate the company's total sales. (Omit the "$" sign in your response.)
Requirement 1:
(a) Calculate the company's total sales. (Omit the "$" sign in your response.)
Total sales
1st Quarter
$ 1 (0%)
2nd Quarter
$ 1 (0%)
3rd Quarter
$ 1 (0%)
4th Quarter
1 (0%)
$
Year
(0%) sales
$ 1 Total
1st Quarter
$ 198,000
Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0%
Feedback:
Budgeted unit sales
Selling price per unit
Total sales
Jessi Corporation
Sales Budget
1st
2nd
Quarter
Quarter
11,000
12,000
× $18.00
× $18.00
$ 198,000 $ 216,000
3rd
Quarter
14,000
× $18.00
$ 252,000
Your response
4th
Quarter
13,000
× $18.00
$ 234,000
Year
50,000
× $18.00
$ 900,000
Correct response
2nd Quarter
$ 216,000
3rd Quarter
$ 252,000
4th Quarter
234,000
$
Year
$ 900,000
(b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required.
Omit the "$" sign in your response.)
Accounts receivable, beginning balance
1st Quarter sales
2nd Quarter sales
3rd Quarter sales
4th Quarter sales
Total cash collections
Jessi Corporation
Schedule of Expected Cash Collections
st
1 Quarter
2nd Quarter
1 (0%) $
1 (0%)
$
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%) $
1 (0%)
$
rd
3 Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
$
th
(b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required.
Omit the "$" sign in your response.)
4 Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
$
$
Year
Accounts
$ 1 (0%)
receivable, beginning balance
1 (0%)
1st Quarter
sales
1 (0%)
2nd Quarter
sales
1 (0%)
3rd Quarter
sales
1 (0%)
4th Quarter
sales
(0%)
Total
$ 1cash
collections
Jessi Corporation
Schedule of Expected Cash Collections
st
1 Quarter
2nd Quarter
70,200 $
0
$
128,700
59,400
0
140,400
0
0
0
0
198,900 $
199,800
$
3rd Quarter
$
$
0
0
64,800
163,800
0
228,600
4th Quarter
$
$
0
0
0
75,600
152,100
227,700
Year
$ 70,200
188,100
205,200
239,400
152,100
$ 855,000
Total grade: 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 +
0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 + 0.0×1/30 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Your response
Correct response
Requirement 2:
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Budgeted unit sales
Add desired ending inventory
Total units needed
Less beginning inventory
Required production
Jessi Corporation
Production Budget
1st Quarter
2nd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
3rd Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Requirement 2:
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
4th Quarter
1 (0%)
1 (0%)
1 (0%)
1 (0%)
1 (0%)
Year
1 (0%)unit sales
Budgeted
(0%) ending inventory
Add1desired
1 units
(0%)needed
Total
1 beginning
(0%)
Less
inventory
1 (0%)
Required
production
Jessi Corporation
Production Budget
1st Quarter
2nd Quarter
11,000
12,000
1,800
2,100
12,800
14,100
1,650
1,800
11,150
12,300
3rd Quarter
14,000
1,950
15,950
2,100
13,850
4th Quarter
13,000
1,850
14,850
1,950
12,900
Year
50,000
1,850
51,850
1,650
50,200
Total grade: 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 + 0.0×1/25 +
0.0×1/25 + 0.0×1/25 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Question 14: Score 0/4
Your response
Exercise 10-1 Prepare a Flexible Budget [LO1]
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:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Correct response
Exercise 10-1 Prepare a Flexible Budget [LO1]
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:
Puget Sound Divers
Planning Budget
Budgeted diving-hours (q)
Revenue ($365.00q)
Expenses:
Wages and salaries ($8,000 + $125.00q)
Supplies ($3.00q)
Equipment rental ($1,800 + $32.00q)
Insurance ($3,400)
Miscellaneous ($630 + $1.80q)
Total expense
Net operating income
100
$ 36,500
20,500
300
5,000
3,400
810
30,010
$ 6,490
Required:
During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity. (Input all
amounts as positive values. Omit the "$" sign in your response.)
100
$ 36,500
20,500
300
5,000
3,400
810
30,010
$ 6,490
Required:
During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity. (Input all
amounts as positive values. Omit the "$" sign in your response.)
Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense
Net operating income
For the Month Ended May 31
Budgeted diving-hours (q)
Revenue ($365.00q)
Expenses:
Wages and salaries ($8,000 + $125.00q)
Supplies ($3.00q)
Equipment rental ($1,800 + $32.00q)
Insurance ($3,400)
Miscellaneous ($630 + $1.80q)
Total expense
Net operating income
$ 1 (0%)
1
1
1
1
1
1
$ 1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense
Net operating income
$ 38,325
21,125
315
5,160
3,400
819
30,819
$ 7,506
Total grade: 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 + 0.0×1/8 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Revenue ($365.00 × 105) = $38,325
Wages and salaries ($8,000 + ($125.00 × 105)) = $21,125
Supplies ($3.00 × 105) = $315
Equipment rental ($1,800 + ($32.00 × 105)) = $5,160
Miscellaneous ($630 + ($1.80 × 105)) = $819
Question 15: Score 1.33/4
Your response
Correct response
Exercise 10-2 Prepare a Report Showing Activity Variances [LO2]
Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's
planning budget for July appears below:
Flight Café
Planning Budget
For the Month Ended July 31
Budgeted meals (q)
Revenue ($4.50q)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.10q)
Total expense
Net operating income
18,000
$ 81,000
43,200
10,600
3,300
4,300
2,300
2,480
66,180
$ 14,820
Exercise 10-2 Prepare a Report Showing Activity Variances [LO2]
Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's
planning budget for July appears below:
Flight Café
Planning Budget
For the Month Ended July 31
Budgeted meals (q)
Revenue ($4.50q)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.10q)
Total expense
Net operating income
18,000
$ 81,000
43,200
10,600
3,300
4,300
2,300
2,480
66,180
$ 14,820
In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below:
Flight Café
Flexible Budget
For the Month Ended July 31
Budgeted meals (q)
Revenue ($4.50q)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.10q)
Total expense
Net operating income
In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below:
17,800
$ 80,100
42,720
10,540
3,290
4,300
2,300
2,460
65,610
$ 14,490
Required:
Prepare a report showing the company's activity variances for July. (Leave no cells blank - be certain to enter "0" wherever
required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U"
for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Revenue
Expenses:
Raw materials
Wages and salaries
Utilities
Facility rent
Insurance
Flight Café
Activity Variances
For the Month Ended July 31
Activity Variances
1 (0%) U (6%)
$
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
F (6%)
None (0%)
None (0%)
None (6%)
None (6%)
Flight Café
Flexible Budget
For the Month Ended July 31
Budgeted meals (q)
Revenue ($4.50q)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.10q)
Total expense
Net operating income
17,800
$ 80,100
42,720
10,540
3,290
4,300
2,300
2,460
65,610
$ 14,490
Required:
Prepare a report showing the company's activity variances for July. (Leave no cells blank - be certain to enter "0" wherever
required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U"
for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Revenue
Flight Café
Activity Variances
For the Month Ended July 31
Activity Variances
900 U
$
Miscellaneous
Total expense
Net operating income
$
1 (0%) F (6%)
1 (0%) U (0%)
1 (0%) U (6%)
Expenses:
Raw materials
Wages and salaries
Utilities
Facility rent
Insurance
Miscellaneous
Total expense
Net operating income
480
60
10
0
0
20
$
F
F
F
None
None
F
570 F
330 U
Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 6% + 0% + 0% + 0% + 0% + 0% + 6% + 0%
+ 6% + 0% + 6% + 0% + 0% + 0% + 6%
Feedback:
Flight Café
Activity Variances
For the Month Ended July 31
Planning
Flexible
Budget
Budget
18,000
17,800
$ 81,000
$ 80,100
Meals
Revenue ($4.50q)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.10q)
Total expense
Net operating income
43,200
10,600
3,300
4,300
2,300
2,480
66,180
$ 14,820
42,720
10,540
3,290
4,300
2,300
2,460
65,610
$ 14,490
Activity Variances
$ 900 U
480
60
10
0
0
20
570
$ 330
F
F
F
None
None
F
F
U
Question 16: Score 0.88/4
Your response
Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3]
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in
August. The company's flexible budget for August appears below:
Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q)
Revenue ($4.00q)
Expenses:
8,000
$ 32,000
Correct response
Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3]
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters
in August. The company's flexible budget for August appears below:
Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q)
Revenue ($4.00q)
8,000
$ 32,000
Packing supplies ($0.50q)
Oyster bed maintenance ($3,200)
Wages and salaries ($2,900 +$0.30q)
Shipping ($0.80q)
Utilities ($830)
Other ($450 + $0.05q)
Total expense
Net operating income
4,000
3,200
5,300
6,400
830
850
20,580
$ 11,420
Expenses:
Packing supplies ($0.50q)
Oyster bed maintenance ($3,200)
Wages and salaries ($2,900 +$0.30q)
Shipping ($0.80q)
Utilities ($830)
Other ($450 + $0.05q)
Total expense
Net operating income
4,000
3,200
5,300
6,400
830
850
20,580
$ 11,420
The actual results for August appear below:
Quilcene Oysteria
Income Statement
For the Month Ended August 31
The actual results for August appear below:
Actual pounds
Revenue
Expenses:
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expense
Net operating income
8,000
$ 35,200
4,200
3,100
5,640
6,950
810
980
21,680
$ 13,520
Required:
Prepare a report showing the company's revenue and spending variances for August. (Input all amounts as positive values.
Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
zero variance). Omit the "$" sign in your response.)
Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31
Revenue and
Spending Variances
1 (0%) F (6%)
$
Revenue
Expenses:
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expense
Net operating income
$
1
1
1
1
1
1
1
1
(0%) F (0%)
(0%) U (0%)
(0%) None (0%)
(0%) F (0%)
(0%) None (0%)
(0%) U (6%)
(0%) U (6%)
(0%) F (6%)
Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds
Revenue
Expenses:
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expense
Net operating income
8,000
$ 35,200
4,200
3,100
5,640
6,950
810
980
21,680
$ 13,520
Required:
Prepare a report showing the company's revenue and spending variances for August. (Input all amounts as positive values.
Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
zero variance). Omit the "$" sign in your response.)
Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31
Revenue and
Spending Variances
3,200 F
$
Revenue
Expenses:
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
200
100
340
550
20
130
U
F
U
U
F
U
Total expense
Net operating income
$
1,100 U
2,100 F
Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
+ 0% + 0% + 6% + 0% + 6% + 0% + 6%
Feedback:
Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31
Flexible
Actual
Budget
Result
8,000
8,000
$ 32,000
$ 35,200
Pounds
Revenue ($4.00q)
Expenses:
Packing supplies ($0.50q)
Oyster bed maintenance ($3,200)
Wages and salaries ($2,900 + $0.30q)
Shipping ($0.80q)
Utilities ($830)
Other ($450 + $0.05q)
Total expense
Net operating income
4,000
3,200
5,300
6,400
830
850
20,580
$ 11,420
4,200
3,100
5,640
6,950
810
980
21,680
$ 13,520
Revenue and
Spending Variances
$ 3,200 F
200
100
340
550
20
130
1,100
$ 2,100
U
F
U
U
F
U
U
F
Question 17: Score 0.5/4
Your response
Correct response
Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4]
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:
Vulcan Flyovers
Operating Data
For the Month Ended July 31
Planning
Budget
50
$ 16,000
Flexible
Budget
48
$ 15,360
Actual
Budget
48
$ 13,650
8,100
1,150
2,550
350
290
12,440
7,936
1,104
2,474
336
286
12,136
8,430
1,260
2,350
336
460
12,836
Flights (q)
Revenue ($320.00q)
Expenses:
Wages and salaries ($4,000 + $82.00q)
Fuel ($23.00q)
Airport fees ($650 + $38.00q)
Aircraft depreciation ($7.00q)
Office expenses ($190 + $2.00q)
Total expense
Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4]
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:
Vulcan Flyovers
Operating Data
For the Month Ended July 31
Planning
Budget
50
$ 16,000
Flexible
Budget
48
$ 15,360
Actual
Budget
48
$ 13,650
8,100
1,150
2,550
350
7,936
1,104
2,474
336
8,430
1,260
2,350
336
Flights (q)
Revenue ($320.00q)
Expenses:
Wages and salaries ($4,000 + $82.00q)
Fuel ($23.00q)
Airport fees ($650 + $38.00q)
Aircraft depreciation ($7.00q)
Net operating income
$
3,560
$ 3,224
$
814
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.
Revenue
Expenses:
Wages and salaries
Fuel
Airport fees
Aircraft depreciation
Office expenses
Total expense
Net operating income
$
1
1
1
1
1
1
1
(0%) U (0%)
(0%) U (0%)
(0%) F (3%)
(0%) U (0%)
(0%) F (3%)
(0%) U (0%)
(0%) U (3%)
$
$
(0%) None (0%)
(0%) U (3%)
(0%) U (0%)
(0%) U (0%)
(0%) None (0%)
(0%) F (0%)
(0%) F (0%)
286
12,136
$ 3,224
460
12,836
$
814
Required:
Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be
certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Revenue and Spending Variances
1 (0%) None (0%)
1
1
1
1
1
1
1
290
12,440
$ 3,560
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:
Prepare a flexible budget performance report for July. (Input all amounts as positive values. Leave no cells blank - be
certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31
Activity Variances
1 (0%) None (0%)
$
Office expenses ($190 + $2.00q)
Total expense
Net operating income
Revenue
Expenses:
Wages and salaries
Fuel
Airport fees
Aircraft depreciation
Office expenses
Total expense
Net operating income
Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31
Activity Variances
640 U
$
$
164
46
76
14
4
304
336
F
F
F
F
F
F
U
$
$
Revenue and Spending Variances
1,710 U
494
156
124
0
174
700
2,410
U
U
F
None
U
U
U
Total grade: 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 +
0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 1.0×1/32 + 0.0×1/32 + 0.0×1/32 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 3% + 0%
+ 0%
Feedback:
Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31
Flights (q)
Revenue ($320.00q)
Expenses:
Wages and salaries
($4,000 + $82.00q)
Fuel ($23.00q)
Airport fees ($650 + $38.00q)
Aircraft depreciation ($7.00q)
Planning
Budget
50
$ 16,000
8,100
1,150
2,550
350
Activity
Variances
$ 640 U
164
46
76
14
F
F
F
F
Flexible
Budget
48
$ 15,360
7,936
1,104
2,474
336
Revenue and
Spending
Variances
$ 1,710 U
494
156
124
0
U
U
F
None
Actual
Results
48
$ 13,650
8,430
1,260
2,350
336
Office expenses ($190 + $2.00q)
Total expense
Net operating income
290
12,440
$ 3,560
4 F
304 F
$ 336 U
286
12,136
$ 3,224
174 U
700 U
$ 2,410 U
460
12,836
$
814
Question 18: Score 0/4
Your response
Correct response
Exercise 10-5 Prepare a Flexible Budget with More Than One Cost Driver [LO5]
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two
cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The
company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80
passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
Fixed Cost
Per Month
$ 5,200
$ 1,700
$ 4,300
$ 2,900
Vessel operating costs
Advertising
Administrative costs
Insurance
Cost per
Cruise
$ 480.00
Cost per
Passenger
$2.00
$ 24.00
$1.00
Exercise 10-5 Prepare a Flexible Budget with More Than One Cost Driver [LO5]
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two
cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The
company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to
80 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
Vessel operating costs
Advertising
Administrative costs
Insurance
Fixed Cost
Per Month
$ 5,200
$ 1,700
$ 4,300
$ 2,900
Cost per
Cruise
$ 480.00
Cost per
Passenger
$ 2.00
$ 24.00
$ 1.00
For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's
sales should average $25 per passenger. The company's planning budget for July is based on 24 cruises and 1,400
passengers.
For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's
sales should average $25 per passenger. The company's planning budget for July is based on 24 cruises and 1,400
passengers.
Required:
Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Required:
Prepare the company's planning budget for July. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Alyeski Tours
Planning Budget
For the Month Ended July 31
Revenue
Expenses:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expense
Net operating income
$ 1 (0%)
1
1
1
1
1
$ 1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Total grade: 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 = 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Alyeski Tours
Planning Budget
For the Month Ended July 31
Revenue
Expenses:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expense
Net operating income
$ 35,000
19,520
1,700
6,276
2,900
30,396
$ 4,604
Revenue ($25.00 × 1,400) = $35,000
Vessel operating costs ($5,200 + ($480.00 × 24) + ($2.00 × 1,400)) = $19,520
Administrative costs ($4,300 + ($24.00 × 24) + ($1.00 × 1,400)) = $6,276
Question 19: Score 0/4
Your response
Exercise 10-8 Flexible Budget [LO1]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
Correct response
Exercise 10-8 Flexible Budget [LO1]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$
$
$
$
5,000
6,000
8,000
4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
Required:
Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Required:
Prepare the company's planning budget for August. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Lavage Rapide
Planning Budget
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$ 1 (0%)
1
1
1
1
1
1
1
1
$ 1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Lavage Rapide
Planning Budget
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$ 44,100
7,200
2,550
1,800
7,700
6,000
8,000
4,900
38,150
$ 5,950
Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Revenue ($4.90 × 9,000) = $44,100
Cleaning supplies ($0.80 × 9,000) = $7,200
Electricity ($1,200 + ($0.15 × 9,000)) = $2,550
Maintenance ($0.20 × 9,000) = $1,800
Wages and salaries ($5,000 + ($0.30 × 9,000)) = $7,700
Administrative expenses ($4,000 + ($0.10 × 9,000)) = $4,900
Question 20: Score 0/4
Your response
Correct response
Exercise 10-9 Flexible Budget [LO1]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Exercise 10-9 Flexible Budget [LO1]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$
$
$
$
5,000
6,000
8,000
4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company actually washed 8,800 cars in
August and to collect an average of $4.90 per car washed.
Required:
Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Lavage Rapide
Flexible Budget
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$ 1 (0%)
1
1
1
1
1
1
1
1
$ 1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company actually washed 8,800 cars in
August and to collect an average of $4.90 per car washed.
Required:
Prepare the company's flexible budget for August. (Input all amounts as positive values. Omit the "$" sign in your
response.)
Lavage Rapide
Flexible Budget
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
$ 43,120
7,040
2,520
1,760
7,640
6,000
8,000
4,880
37,840
$ 5,280
Administrative expenses
Total expense
Net operating income
Total grade: 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 + 0.0×1/10 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Revenue ($4.90 × 8,800) = $43,120
Cleaning supplies ($0.80 × 8,800) = $7,040
Electricity ($1,200 + ($0.15 × 8,800)) = $2,520
Maintenance ($0.20 × 8,800) = $1,760
Wages and salaries ($5,000 + ($0.30 × 8,800)) = $7,640
Administrative expenses ($4,000 + ($0.10 × 8,800)) = $4,880
Question 21: Score 0.4/4
Your response
Exercise 10-10 Prepare a Report Showing Activity Variances [LO2]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
8,800
$ 43,080
7,560
2,670
2,260
8,500
6,000
8,000
Correct response
Exercise 10-10 Prepare a Report Showing Activity Variances [LO2]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$
$
$
$
5,000
6,000
8,000
4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
8,800
$ 43,080
7,560
2,670
Administrative expenses
Total expense
Net operating income
4,950
39,940
$ 3,140
Required:
Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0"
wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Activity Variances
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$
Activity Variances
1 (0%) U (5%)
$
1
1
1
1
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Required:
Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0"
wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Activity Variances
For the Month Ended August 31
Activity Variances
980 U
$
None (0%)
None (0%)
U (0%)
U (0%)
F (0%)
U (0%)
U (0%)
U (0%)
U (5%)
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
160
30
40
60
0
0
20
$
F
F
F
F
None
None
F
310 F
670 U
Total grade: 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 = 0% + 5% + 0% + 0% + 0% + 0% + 0%
+ 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 5%
Feedback:
Lavage Rapide
Activity Variances
For the Month Ended August 31
Planning
Flexible
Budget
Budget
9,000
8,800
$ 44,100
$ 43,120
Cars washed (q)
Revenue ($4.90q)
Expenses:
Cleaning supplies ($0.80q)
Electricity ($1,200 + $0.15q)
Maintenance ($0.20q)
Wages and salaries ($5,000 + $0.30q)
7,200
2,550
1,800
7,700
7,040
2,520
1,760
7,640
Activity Variances
$ 980 U
160
30
40
60
F
F
F
F
Depreciation ($6,000)
Rent ($8,000)
Administrative expenses
($4,000 + $0.10q)
Total expense
Net operating income
6,000
8,000
6,000
8,000
4,900
38,150
$ 5,950
4,880
37,840
$ 5,280
0 None
0 None
20 F
310 F
$ 670 U
Question 22: Score 0.8/4
Your response
Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
8,800
$ 43,080
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Required:
Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to
enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F"
for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Correct response
Exercise 10-11 Prepare a Report Showing Revenue and Spending Variances [LO3]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$
$
$
$
5,000
6,000
8,000
4,000
Cost per
Car Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
8,800
$ 43,080
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Revenue and Spending
Variances
1 (0%) U (5%)
$
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$
1
1
1
1
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Required:
Prepare a report showing the company's revenue and spending variances for August. (Leave no cells blank - be certain to
enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F"
for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Revenue and Spending
Variances
40 U
$
F (0%)
None (0%)
U (5%)
None (0%)
F (0%)
None (5%)
None (0%)
U (5%)
F (0%)
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
520
150
500
860
0
0
70
$
U
U
U
U
None
None
U
2,100 U
2,140 U
Total grade: 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 + 0.0×1/20 + 1.0×1/20 + 0.0×1/20 + 0.0×1/20 = 0% + 5% + 0% + 0% + 0% + 0% + 0%
+ 5% + 0% + 0% + 0% + 0% + 0% + 5% + 0% + 0% + 0% + 5% + 0% + 0%
Feedback:
Cars washed (q)
Revenue ($4.90q)
Expenses:
Cleaning supplies ($0.80q)
Electricity ($1,200 + $0.15q)
Maintenance ($0.20q)
Wages and salaries
($5,000 + $0.30q)
Depreciation ($6,000)
Rent ($8,000)
Administrative expenses
($4,000 + $0.10q)
Total expense
Net operating income
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Flexible
Actual
Budget
Results
8,800
8,800
$ 43,120
$ 43,080
Revenue and
Spending Variances
$
40 U
7,040
2,520
1,760
7,560
2,670
2,260
520 U
150 U
500 U
7,640
6,000
8,000
8,500
6,000
8,000
860 U
0 None
0 None
4,880
37,840
$ 5,280
4,950
39,940
$ 3,140
70 U
2,100 U
$ 2,140 U
Question 23: Score 1/4
Your response
Correct response
Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Exercise 10-12 Prepare a Flexible Budget Performance Report [LO4]
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following
table provides data concerning the company's costs:
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Cost per Car
Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
Fixed Cost
Per Month
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
8,800
$ 43,080
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Required:
Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances
for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required.
Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
zero variance). Omit the "$" sign in your response.)
Revenue
Expenses:
Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Activity Variances
1 (0%) F (0%)
$
$ 1,200
$
$
$
$
5,000
6,000
8,000
4,000
Cost per Car
Washed
$ 0.80
$ 0.15
$ 0.20
$ 0.30
$ 0.10
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
8,800
$ 43,080
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Required:
Prepare a flexible budget performance report that shows the company's activity variances and revenue and spending variances
for August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required.
Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
Revenue and Spending Variances
zero variance). Omit the "$" sign in your response.)
1 (0%) F (0%)
$
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$
1
1
1
1
1
1
1
1
1
(0%) F (3%)
(0%) F (3%)
(0%) U (0%)
(0%) F (3%)
(0%) F (0%)
(0%) None (3%)
(0%) F (3%)
(0%) None (0%)
(0%) U (3%)
1
1
1
1
1
1
1
1
1
$
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
U (3%)
U (3%)
None (0%)
U (3%)
U (0%)
F (0%)
U (3%)
None (0%)
None (0%)
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Activity Variances
980 U
$
$
160
30
40
60
0
0
20
310
670
F
F
F
F
None
None
F
F
U
$
$
Revenue and Spending Variances
40 U
520
150
500
860
0
0
70
2,100
2,140
U
U
U
U
None
None
U
U
U
Total grade: 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 +
0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 0.0×1/40 + 1.0×1/40 + 0.0×1/40 + 0.0×1/40 = 0% + 0% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 3% + 0% + 3% + 0% + 0% + 0% +
0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0% + 0% + 3% + 0% + 3% + 0% + 0% + 0% + 0% + 0% + 3% + 0% + 0%
Feedback:
Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Cars washed (q)
Revenue ($4.90q)
Expenses:
Cleaning supplies ($0.80q)
Electricity ($1,200 + $0.15q)
Maintenance ($0.20q)
Wages and salaries
($5,000 + $0.30q)
Depreciation ($6,000)
Rent ($8,000)
Administrative expenses
($4,000 + $0.10q)
Total expense
Net operating income
Question 24: Score 0/4
Planning
Budget
9,000
$ 44,100
$ 980 U
Flexible
Budget
8,800
$ 43,120
7,200
2,550
1,800
160 F
30 F
40 F
7,700
6,000
8,000
4,900
38,150
$ 5,950
Activity
Variances
60 F
0 None
0 None
20 F
310 F
$ 670 U
Revenue and
Spending
Variances
40 U
Actual
Results
8,800
$ 43,080
7,040
2,520
1,760
520 U
150 U
500 U
7,560
2,670
2,260
7,640
6,000
8,000
860 U
0 None
0 None
8,500
6,000
8,000
4,880
37,840
$ 5,280
$
70 U
2,100 U
$ 2,140 U
4,950
39,940
$ 3,140
Your response
Correct response
Exercise 10-13 Flexible Budget [LO1]
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Exercise 10-13 Flexible Budget [LO1]
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Fixed Cost
Per Month
Direct materials
Direct labor
Supplies
Utilities
Depreciation
Insurance
Cost per
Machine-Hour
$ 4.25
$ 36,800
$ 0.30
$ 0.05
$ 1,400
$ 16,700
$ 12,700
Fixed Cost
Per Month
Direct materials
Direct labor
Supplies
Utilities
Depreciation
Insurance
Cost per
Machine-Hour
$ 4.25
$ 36,800
$ 1,400
$ 16,700
$ 12,700
$ 0.30
$ 0.05
For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machinehours in June. Note that the company's direct labor is a fixed cost.
For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machinehours in June. Note that the company's direct labor is a fixed cost.
Required:
Prepare the company's planning budget for manufacturing costs for June. (Omit the "$" sign in your response.)
Required:
Prepare the company's planning budget for manufacturing costs for June. (Omit the "$" sign in your response.)
Wyckam Manufacturing Inc.
Planning Budget for Manufacturing Cost
For the Month Ended June 30
Direct materials
$
Direct labor
Supplies
Utilities
Depreciation
Insurance
Total manufacturing cost
$
1
1
1
1
1
1
1
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
(0%)
Wyckam Manufacturing Inc.
Planning Budget for Manufacturing Cost
For the Month Ended June 30
Direct materials
$
Direct labor
Supplies
Utilities
Depreciation
Insurance
Total manufacturing cost
$
21,250
36,800
1,500
1,650
16,700
12,700
90,600
Total grade: 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 + 0.0×1/7 = 0% + 0% + 0% + 0% + 0% + 0% + 0%
Feedback:
Direct materials ($4.25 × 5,000) = $21,250
Supplies ($0.30 × 5,000) = 1,500
Utilities ($1,400 + ($0.05 × 5,000)) = 1,650
Question 25: Score 0.88/4
Your response
Correct response
Exercise 10-14 Flexible Budgets and Activity Variances [LO1, LO2]
Jake's Roof Repair has provided the following data concerning its costs:
Exercise 10-14 Flexible Budgets and Activity Variances [LO1, LO2]
Jake's Roof Repair has provided the following data concerning its costs:
Wages and salaries
Parts and supplies
Equipment depreciation
Truck operating expenses
Rent
Administrative expenses
Fixed Cost
Per Month
$ 23,200
$
$
$
$
Cost per
Repair-Hour
$ 16.30
$ 8.60
$ 0.40
$ 1.70
1,600
6,400
3,480
4,500
Wages and salaries
Parts and supplies
Equipment depreciation
Truck operating expenses
Rent
Administrative expenses
$
$
$
$
1,600
6,400
3,480
4,500
Cost per
Repair-Hour
$ 16.30
$ 8.60
$ 0.40
$ 1.70
$ 0.80
$ 0.80
For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repairhours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required:
Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit
the "$" sign in your response.)
For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repairhours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required:
Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F"
for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
Omit the "$" sign in your response.)
Jake's Roof Repair
Activity Variances
For the Month Ended May 31
Revenue
Expenses:
Wages and salaries
Parts and supplies
Equipment depreciation
Truck operating expenses
Rent
Administrative expenses
Total expense
Net operating income
Fixed Cost
Per Month
$ 23,200
$
Activity Variances
1 (0%) F (6%)
$
1
1
1
1
1
1
1
1
Jake's Roof Repair
Activity Variances
For the Month Ended May 31
Revenue
(0%) F (0%)
(0%) U (6%)
(0%) None (0%)
(0%) U (6%)
(0%) U (0%)
(0%) F (0%)
(0%) None (0%)
(0%) F (6%)
$
Expenses:
Wages and salaries
Parts and supplies
Equipment depreciation
Truck operating expenses
Rent
Administrative expenses
Total expense
Net operating income
Activity Variances
4,450 F
1,630
860
40
170
0
80
2,780
$
U
U
U
U
None
U
U
1,670 F
Total grade: 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 0.0×1/18 + 1.0×1/18 = 0% + 6% + 0% + 0% + 0% + 6% + 0% + 0% + 0% + 6% + 0%
+ 0% + 0% + 0% + 0% + 0% + 0% + 6%
Feedback:
Jake's Roof Repair
Activity Variances
For the Month Ended May 31
Planning
Flexible
Budget
Budget
Activity
Variances
Repair-hours (q)
2,800
2,900
$ 124,600
$ 129,050
$ 4,450 F
Wages and salaries
($23,200 + $16.30q)
68,840
70,470
1,630 U
Parts and supplies ($8.60q)
24,080
24,940
860 U
2,720
2,760
40 U
11,160
11,330
170 U
3,480
3,480
Revenue ($44.50q)
Expenses:
Equipment depreciation
($1,600 + $0.40q)
Truck operating expenses
($6,400 + $1.70q)
Rent ($3,480)
Administrative expenses
($4,500 + $0.80q)
Total expense
Net operating income
$
0 None
6,740
6,820
80 U
117,020
119,800
2,780 U
9,250
$ 1,670 F
7,580
$