Ex. 23.3
(
continued
)
c.
$ 25,500
20,400
Manufacturing cost budget:
Variable manufacturing costs:
Direct materials (1,700 cases × $15/case) ……………
…
Direct labor (1,700 cases × $12/case) …………………
Ex. 23.4
(continued) c.
Ex. 23.5 400,000$
(250,000)
Lock Tight may wish to increase its ending inventory level of steel if the price of
steel this year is expected to be much lower than the price next year. However,
First, calculate prepayments to be expired during the period:
Total costs and expenses ……………………………………………………
…
Amount financed with current payables ………………………
…
Less:
Ex. 23.6
February March April
a.
Wilmar Corporation
Debt Service Schedule
For the February through April
Note Payable at the Beginning
Budgeted interest expense reported on the February income statement is
Ex. 23.7
Fixed
Portion
Budgeted
Overhead at
2,800 Hours
$ 2,000 $ 16,000
Variable Cost Per Hour Formula
($17,000-$12,000) ÷ (3,000 hrs-2,000 hrs) = $5.00/hr
Maintenance
Ex. 23-9
(continued) b. $ 565,000
60,000
Ex. 23.10
$ 1,800,000
…
Cash balance on April 1 (from a) …………………………………
…
Collections on February sales ($400,000 × 15%) …………………
…
Flexible budget at 90,000-unit level of activity:
Sales ($1,600,000 80,000 units = $20
p
er unit;
90,000 × $20 = $1,800,000) ……………………………………………
…
Cost of goods sold ($960,000 ÷ 80,000 units = $12 per unit;
…
Ex. 23.11
Flexible
Budget Actual Favorable Unfavorable
Ex. 23.12 a.
Upload Games Company
Performance Report—Packaging Department
For the Current Month
11,000 Units Variances
Manufacturing costs:
*Budgeted variable manufacturing costs are restated from the 10,000 units of production level
to the 11,000-unit level by multiplying the cost at the 10,000-unit level by 110%. Alternatively,
find the variable cost per unit by dividing the budgeted variable production costs by 10,000
units and then multiply that unit cost by 11,000 units.
To purposely distort budget estimates for personal gain is an unethical practice
and should be avoided. In addition to ethical implications, distorting a sales
WELLS ENTERPRISES
Budget for Manufacturing Overhead Costs
Total Dept. I Dept. II
Variable manufacturing overhead:
Ex. 23.14
Ex. 23.15 1.
Ex. 23.13
Imposed budgets do not generate commitment to budget goals. Also imposed
budgets typically do not benefit from the superior information that managers may
Home Depot could use the following categories of store data:
Average square footage per store
SOLUTIONS TO PROBLEMS SET A
25 Minutes, Easy PROBLEM 23.1A
RENFROW INTERNATIONAL
a. Planned production of finished goods (in units):
Budgeted sales 150,000
Add: Finished goods inventory, end of quarter 28,000
Units budgeted to be available for sale 178,000
Less: Finished goods inventory, beginning of quarter 38,000
Planned production of finished goods 140,000
20 Minutes, Medium PROBLEM 23.2A
LAKELAND CORPORATION
a. Planned production of finished goods (in units):
Budgeted sales 200,000
Add: Finished goods inventory, Mar. 31 (end of quarter) 40,000
Units budgeted to be available for sale 240,000
c. Finished goods inventory, Mar. 31 (FIFO method):
Finished goods inventory, Mar. 31 (40,000 units × $48)* 1,920,000$
*Using the first-in, first-out method, the ending
inventory consists of the most recently manufactured
units.
50 Minutes, Strong PROBLEM 23.3A
BARNUM DISTRIBUTORS
BARNUM DISTRIBUTORS
Cash Budget
For the Month Ended November 30, 20__
Cash balance at beginning of month 29,600$
Receipts:
Collections on receivables (Schedule A) 778,800$
Sale of fully depreciated equipment 8,400 787,200
Total cash available 816,800$
Purchases
Computation of Purchases Units ($7 Per Unit)
*2,000 + 10% of 80,000 = 10,000 units
†2,000 + 10% of 50,000 = 7,000 units