Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 21, Problem 21.1BPR
1.
To determine
Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.
To Compute: The increase or decrease of actual unit sales for the year ended December 31, 2016, over budget.
2.
To determine
To Compute: The unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017.
3.
To determine
To Prepare: The sales budget for the year ending December 31, 2017.
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Forecast Sales Volume and Sales Budget
For 20Y8, Raphael Frame Company prepared the sales budget that follows.
At the end of December 20Y8, the following unit sales data were reported for the year:
The followings are the budget for next financial year (1 January 2023 - 31 December 2023),
indicating the average selling price and variable costs of each product category. The common
fixed manufacturing overhead and the fixed non-manufacturing overhead costs are estimated
to be $1,250,000 and $2,778,320 respectively.
Table 1: Budget Jan - Dec 2023
Sales Quantity (in units)
In $
Unit selling price
Unit production cost
Unit selling & admin variable costs
(5% of selling price)
In $
Revenue
Variable Production Costs
Selling & Admin Variable Costs
Model 1
8,400
600
250
30
Folding Bike
Model 2
7,500
400
180
20
Model 3
3,500
480
200
24
Electric
Bike
800
2,000
850
100
Total
20,200
5,040,000 3,000,000 1,680,000 1,600,000 11,320,000
(2,100,000)| (1,350,000)| (700,000)| (680,000)| (4,830,000)
(252,000) (150,000) (84,000) (80,000) (566,000)
Q1. Based on the above budgeted information, calculate the expected breakeven units for the
Model 2 folding bikes.
The data shown were obtained from the financial records of Italian Exports, Inc., for March:
Estimated Sales
$550,000
Sales
567,933
Purchases
294,814
Ending Inventory*
10%
Administrative Salaries
50,340
Marketing Expense**
5%
Sales Commissions
2%
Rent Expense
7,400
Depreciation Expense
1,100
Utilities
2,600
Taxes***
15%
*of next month's sales
**of estimated sales
***of income before taxes
Sales are expected to increase each month by 10%.
Chapter 21 Solutions
Financial & Managerial Accounting
Ch. 21 - Prob. 1DQCh. 21 - Briefly describe the type of human behavior...Ch. 21 - What behavioral problems are associated with...Ch. 21 - What behavioral problems are associated with...Ch. 21 - Under what circumstances would a static budget be...Ch. 21 - How do computerized budgeting systems aid firms in...Ch. 21 - Why should the production requirements Set forth...Ch. 21 - Prob. 8DQCh. 21 - A. Discuss the purpose of the cash budget. B. If...Ch. 21 - Give an example of how the capital expenditures...
Ch. 21 - Flexible budgeting At the beginning of the period,...Ch. 21 - Prob. 21.1BPECh. 21 - Prob. 21.2APECh. 21 - Prob. 21.2BPECh. 21 - Direct materials purchases budget My Life...Ch. 21 - Prob. 21.3BPECh. 21 - Direct labor cost budget MyLife Chronicles Inc....Ch. 21 - Prob. 21.4BPECh. 21 - Prob. 21.5APECh. 21 - Prob. 21.5BPECh. 21 - Prob. 21.6APECh. 21 - Prob. 21.6BPECh. 21 - Personal budget At the beginning of the 2016...Ch. 21 - Flexible budget for selling and administrative...Ch. 21 - Static budget versus flexible budget The...Ch. 21 - Prob. 21.4EXCh. 21 - Prob. 21.5EXCh. 21 - Prob. 21.6EXCh. 21 - Prob. 21.7EXCh. 21 - Prob. 21.8EXCh. 21 - Direct materials purchases budget Romano's Frozen...Ch. 21 - Prob. 21.10EXCh. 21 - Prob. 21.11EXCh. 21 - Direct labor cost budget Ace Racket Company...Ch. 21 - Prob. 21.13EXCh. 21 - Production and direct labor cost budgets Levi...Ch. 21 - Prob. 21.15EXCh. 21 - Cost of goods sold budget Delaware Chemical...Ch. 21 - Cost of goods sold budget The controller of...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Capital expenditures budget On January 1, 2016,...Ch. 21 - Forecast sales volume and sales budget For 2016,...Ch. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Sonoma Housewares...Ch. 21 - Budgeted income statement and balance sheet As a...Ch. 21 - Prob. 21.1BPRCh. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Mercury Shoes Inc....Ch. 21 - Prob. 21.5BPRCh. 21 - Prob. 21.1CPCh. 21 - Prob. 21.2CPCh. 21 - Static budget for a service company A bank manager...Ch. 21 - Objectives of the master budget Dominos Pizza LLC....Ch. 21 - Integrity and evaluating budgeting systems The...
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