Sheffield Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin Operating expenses Operating $ 265,000 180,000 85,000 50,000 $ 35,000

Sheffield Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin Operating expenses Operating $ 265,000 180,000 85,000 50,000 $ 35,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 10CE: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects...

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Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
The fixed overhead budgeted for Ranier Industries at an expected capacity of 500,000 units is 1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net income at year-end. Data collected over the last three years show the following: Determine the adjustment each year to convert the variable costing income to absorption costing net income. Compute the absorption costing net income for each year.
Performance Report Based on Budgeted and Actual Levels of Production Bowling Company budgeted the following amounts: At the end of the year, Bowling had the following actual costs for production of 3,800 units: Required: 1. Calculate the budgeted amounts for each cost category listed above for the 4,000 budgeted units. 2. Prepare a performance report using a budget based on expected production of 4,000 units. 3. Prepare a performance report using a budget based on the actual level of production of 3,800 units.
TIB makes custom guitars and prepared the following sales budget for the second quarter It also has this additional information related to its expenses: Direct material per unit $55, Direct labor per hour 20, Variable manufacturing overhead per hour 3.50, Fixed manufacturing overhead per month 3,000, Sales commissions per unit 20, Sales salaries per month 5,000, Delivery expense per unit 0.50, Utilities per month 4,000. Administrative salaries per month 20,000, Marketing expenses per month 8,000, Insurance expense per month 11,000, Depreciation expense per month 9,000. Prepare a sales and administrative expense budget for each month in the quarter ended June 30. 2018.
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
Vaughn Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 62% of total operating expenses at this level of sales. Sales Cost of goods sold (all variable) Gross margin Operating expenses Operating income $ 450,000 316,800 133,200 26.950 $ 106,250 Assume that during the year Vaughn Sports actually sold 2,700 volleyball kits during the year at a price of $183 per kit. Calculate the sales price variance. (If varlance is zero, select "Not Applicable and enter O for the amounts) Sales price variance Not Applicable
Coronado Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 65% of total operating expenses at this level of sales. Sales $ 275,000 Cost of goods sold (all variable) 268,800 Gross margin 6,200 Operating expenses 28,350 Operating income $ - 22,150 Assume that during the year Coronado Sports actually sold 2,700 volleyball kits during the year at a price of $ 113 per kit. Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter O for the amounts.) $ Sales price variance %24
Concord Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 1,500 kits was prepared for the year. Fixed operating expenses account for 60% of total operating expenses at this level of sales. Sales $ 75,000 Cost of goods sold (all variable) 45,000 Gross margin 30,000 Operating expenses 26,250 Operating income $ 3,750 Assume that Concord Sports actually sold 1,575 volleyball kits during the year at a price of $36 per kit.Calculate the sales volume variance for sales revenue and cost of goods sold. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Flexible Budget Sales Volume Variance Static Budget Unit Sales UnfavorableNot ApplicableFavorable Sales revenue $ $ Not ApplicableUnfavorableFavorable $ Cost of goods sold FavorableUnfavorableNot…
Current Attempt in Progress Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2.500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin Operating expenses Operating income $ 250,000 $ 160,000 90,000 60,000 30,000 Prepare a flexible budget based on sales of 1,200, 3,000, and 4,000 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to O decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Unit $ 1,200 $ 3,000 $
Marigold Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 3,000 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales $ 300,000 Cost of goods sold (all variable) 180,000 Gross margin 120,000 Operating expenses 40,000 Operating income $ 80,000 Assume that Marigold Sports actually sold 2,700 volleyball kits during the year at a price of $102 per kit. Calculate the sales volume variance for sales revenue and cost of goods sold. (If variance is zero, select "Not Applicable" and enter O for the amounts.)