The next year's budget for Green, Inc., a multi-product company, is given below: Product A Product B Sales $2,129,400 $1,526,850 Variable costs $928,200 $596,700 Fixed costs $530,000 $530,000 Net income $671,200 $400,150 Units 273,000 117,000 At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Green analyzes the effects its sales variances have on the profitability of the company. Product lines Units Sales A 273,930 $208,186 123,070 $163,683 What is the total sales mix variance?

The next year's budget for Green, Inc., a multi-product company, is given below: Product A Product B Sales $2,129,400 $1,526,850 Variable costs $928,200 $596,700 Fixed costs $530,000 $530,000 Net income $671,200 $400,150 Units 273,000 117,000 At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Green analyzes the effects its sales variances have on the profitability of the company. Product lines Units Sales A 273,930 $208,186 123,070 $163,683 What is the total sales mix variance?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 34BEA: Performance Report Based on Budgeted and Actual Levels of Production Bowling Company budgeted the...

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At the beginning of the period, the Fabricating Department budgeted direct labor of 72,000 and equipment depreciation of 18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
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?
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
Foy Company has a welding activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity: Four welding units, with a lease cost of 12,000 per year per unit Six welding employees each paid a salary of 50,000 per year (A total of 9,000 welding hours are supplied by the six workers.) Welding supplies: 300 per job Welding hours: Three hours used per job During the year, the activity operated at 90 percent of capacity and incurred the actual activity and resource costs, shown on page 676. Lease cost: 48,000 Salaries: 315,000 Parts and supplies: 805,000 Required: 1. Prepare a flexible budget formula for the welding activity using welding hours as the driver. 2. Prepare a performance report for the welding activity. 3. What if welders were hired through outsourcing and paid 30 per hour (the welding equipment is provided by Foy)? Repeat Requirement 1 for the outsourcing case.
Performance Report Based on Budgeted and Actual Levels of Production Balboa Company budgeted production of 4,500 units with the following amounts: At the end of the year, Balboa had the following actual costs for production of 4,700 units: Required: 1. Calculate the budgeted amounts for each cost category listed above for the 4,500 budgeted units. 2. Prepare a performance report using a budget based on expected (budgeted) production of 4,500 units. 3. Prepare a performance report using a budget based on the actual level of production of 4,700 units.
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.
The Management Accountant of Kafululu Plc has prepared the following budget information for theyear ending 31st December 2022 for product A. Annual Fixed Costs K270,000.00 Variable costs per unit K90.00 Contribution to sales ratio(C/S) 75% Annual budget units 1,500 Required:a) Calculate the contribution per unit for Product A. b) Calculate the Unit Selling Price for Product A. c) Calculate the Break Even Point for Product A. d) Calculate the margin of safety in Units and in percentage terms. e) If the Selling Price per Unit is reduced by 10%, variable cost per Unit is increased to K100.00and Fixed costs remain unchanged, calculate:i. The new Breakeven Point. ii. The total units that should be sold in order to make a profit of K450,000 in 2020.(
Ace Machinery showed the following operating budget for the next year Complete parts (a) through (d) below Each scenario is independent. Sales $2.200,000 Fixed cost $1,400,000 700,000 Total variable cost Total cost 2,100,000 Net income $100,000 (a) Calculate the contribution margin and contribution rate The contribution margin is $ (Round to the nearest dollar as needed) Question Viewer The contribution rate is O (Round to four decimal places as needed) (b) How much does Ace Machinery need to sell to break even? Ace Machinery needs to sell $
K Base Machinery showed the following operating budget for the next year. Complete parts (a) through (d) below Each scenario is independent Sales $2,400,000 Fixed cost Total variable cost Total cost Net income $1,200,000 760,000 1,960,000 $440,000 (a) Calculate the contribution margin and contribution rate. The contribution margin is $ (Round to the nearest dollar as needed.) ma
Pearl, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $45,000 in January, $55,000 in February, and $65,000 in March. Variable and fixed selling and administrative expenses are as follows: Variable Expenses: Power cost Miscellaneous expenses Fixed Expenses: Salaries expense Rent expense Depreciation expense Power cost/fixed portion Miscellaneous expense/fixed portion OA. $35,300 OB. $40,300 OC. $22,500 OD. $45,300 (40% of sales) (10% sales) $6,000 per month $4,000 per month $1,000 per month $800 per month $1,000 per month
The next year's budget for Trend, Inc., a multi-product company, is given below: Product A Product B Sales $ 1,908,000 $ 1,395,000 Variable costs 847,710 536,670 Fixed costs 518,000 518,000 Net income 542,290 340,330 Units 277,200 118,800 At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Trend, Inc. analyzes the effects its sales variances have on the profitability of the company. Product Lines Units Sales A 265,650 $ 119,350 В 131,770 $ 1,515,010 Is the total sales mix variance favorable or unfavorable? Favorable. Unfavorable.