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Accounting 211
Monday, April 19th, 1999
Announcements: none
Lecture notes:
Chapter 20 Homework
Questions
All levels of personnel take part in the budgeting process in a meaningful, creative way. It is necessary to identify them in order to achieve full communication.
- A set of period budgets that have been consolidated into forecasted financial statements for the entire company. It supplies the projected costs and revenues for a part of the company.
- Prepare a period budget, prepare forecasted income statement and balance sheet, prepare cash budget
- It provides the ending cash balance for the period, which is needed to complete the forecasted balance sheet in the master budget and it highlights periods of excess cash reserves or shortages.
Exercises
5.
|
January |
February |
March |
|
Desired sales in units |
5,000 |
4,000 |
6,000 |
|
Desired ending FG inventory |
2,000 |
3,000 |
3,500 |
|
7,000 |
7,000 |
9,500 |
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Less desired beginning FG inventory |
2,500 |
2,000 |
3,000 |
|
Production needs |
4,500 |
5,000 |
6,500 |
7.
|
BB |
DD |
FF |
HH |
|
Total gallons |
299,000 |
124,200 |
1,319,500 |
428,500 |
|
Total cost |
1,794,000 |
869,400 |
10,556,000 |
4,285,000 |
11.
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October = $592,980 |
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November = $696,200 |
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December = $810,160 |
Problem Sets
A1.
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Direct Materials |
Per hammer |
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Anodized steel |
3.2 |
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Leather strapping |
2.2 |
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Direct Labor |
|
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Forging |
1.25 |
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Leather-wrapping |
2.4 |
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Factory Overhead |
|
|
Forging |
.875 |
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Leather-wrapping |
1.2 |
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Total |
11.125 |
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|
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October = 600,750 |
|
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November = 578,500 |
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December = 556,250 |
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A3. Answer is in the packet.
Chapter 22 Homework
Questions
All manufacturing costs are accounted for.
- They allow management to determine discrepancies in the budget.
- A summary of expected costs for a range of activity levels, geared to changes in the level of productive output. It is a cost control tool used in evaluation performance.
- The standard cost would be less than the materials purchased cost.
- Yes, because if the price is good you may end up using more material than prescribed due to increased demand.
Short Exercises
$91.30
Exercises
4.
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1) |
Only areas of unusually good or bad performance are examined. |
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2) |
They could analyze only those areas that have helped sales to increase in order to use them to their benefit. |
5.
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Direct material price variance = (11 - 12) x 594 = 594 (F) |
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Direct material quantity variance = (6.6 - 6) x 12 = 7.2 (U) |
6.
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Direct labor rate variance = (17.5 - 17) x 29,900 = 14,950 (U) |
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Direct labor efficiency variance = (29,900 - 29,700) x 17 = 3,400 (U) |
7.
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Total overhead variance = 11,100 - 7,920 = 3,180 (U) |
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Controllable overhead variance = 11,100 - 9,170 = 1,930 (U) |
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Overhead volume variance = 9,170 - 7,920 = 1,250 (U) |
8.
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Overapplied overhead = 24,300 |
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Controllable overhead variance = 645,500 - 680,000 = 34,500 (F) |
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Overhead volume variance = 680,000 - 704,000 = 24,000 (F) |
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