Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10.50BP
1.
To determine
To prepare: An income statement performance report for October.
2.
To determine
To identify: The factor which accounts for most of the difference between actual operating income and master budget operating income.
3.
To determine
To identify: What is P.B’s master budget variance for operating income and also explain why the income statement performance report provides more useful information.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Integrated Excel: Preparing a Contribution Format Income Statement Using the High-Low Method
Jay Corporation has provided data from a two-year period to aid in planning. The Controller has asked you to prepare a contribution
format income statement.
Budgeted information for Quarter 1 of 2024:
Sales in units
Sales price per unit
After analyzing expenses, the company has determined the following cost patterns.
Cost of Goods Sold (per unit)
Sales Commissions (per dollar of sales).
Administrative Salaries (per quarter)
Rent Expense (per quarter)
Depreciation Expense (per quarter)
Shipping has been determined to be a mixed cost with the following total costs and units:
2022
Quarter 1
Quarter 2
Quarter 3
Quarter 4
2023
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total Cost
$ 67,000
$ 94,000
$ 89,800
$ 92,600
$ 72,500
$80,000
$ 84,000
$ 100,000
17,000
$ 48.00
Units
12,500
21,000
13,800
20,000
13,700
14,000
14,300
22,500
$29.00
9.50€
$ 45,000
$ 27,000
$ 36,000
Required:
Use the data to answer the…
E9-26A Budgeted income statement (Learning Objective 2)
Delta Labs performs a specialty lab test for local companies for $45 per test. For the
upcoming quarter, Delta Labs is projecting the following sales:
January
February
March
Number of lab tests
5,600
4,900
5,700
The budgeted cost of performing each test is $21. Operating expenses are projected to
be $59,000 in January, $57,000 in February, and $58,000 in March. Delta Labs is subject
to a corporate tax rate of 30%.
Requirement
Prepare a budgeted income statement for the first quarter, with a column for each month
and for the quarter.
Learning Objective 4
Wiki Wiki Company has determined that the variable overhead rate is $4.50 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 10,000 hours for the month. Fixed costs are budgeted
at $60,000 for the month.
a. Prepare a monthly factory overhead flexible budget for 9,000, 10,000, and 11,000 hours of production. Enter all amounts as positive numbers.
Wiki Wiki Company
Monthly Factory Overhead Cost Budget-Fabrication
Department
Direct labor hours
Variable factory overhead cost
Fixed factory overhead cost
Total factory overhead cost
9,000
$
$
10,000
$
$
11,000
b. How much overhead would be applied to production if 9,000 hours were used in the department during the month? If required, round your calculations to two decimal places and your final answer to the nearest dollar.
Chapter 10 Solutions
Managerial Accounting (5th Edition)
Ch. 10 - (Learning Objective 1) Companies often...Ch. 10 - (Learning Objective 1) Which of the following is...Ch. 10 - (Learning Objective 1) In terms of responsibility...Ch. 10 - (Learning Objective 2) Which of the following is...Ch. 10 - (Learning Objective 2) A segment margin is the...Ch. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Prob. 8QCCh. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - Identify and understand responsibility centers...Ch. 10 - Identify types of responsibility centers (Learning...Ch. 10 - Identify centralized and decentralized...Ch. 10 - Prob. 10.4SECh. 10 - Prob. 10.5SECh. 10 - Prob. 10.6SECh. 10 - Calculate ROI (Learning Objective 3) Refer to Epic...Ch. 10 - Prob. 10.8SECh. 10 - Prob. 10.9SECh. 10 - Prob. 10.10SECh. 10 - Prob. 10.11SECh. 10 - Interpret a performance report (Learning Objective...Ch. 10 - Prob. 10.13SECh. 10 - Classify KPIs by balanced scorecard perspective...Ch. 10 - Use vocabulary terms (Learning Objectives 1, 2, 3,...Ch. 10 - Prob. 10.16SECh. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prepare a segment margin performance report...Ch. 10 - Compute and interpret the expanded ROI equation...Ch. 10 - Prob. 10.21AECh. 10 - Prob. 10.22AECh. 10 - Comparison of ROI and residual income (Learning...Ch. 10 - Prob. 10.24AECh. 10 - Comprehensive flexible budget problem (Learning...Ch. 10 - Prepare a flexible budget performance report...Ch. 10 - Work backward to find missing values (Learning...Ch. 10 - Construct a balanced scorecard (Learning Objective...Ch. 10 - Sustainability and the balanced scorecard...Ch. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prob. 10.32BECh. 10 - Prob. 10.33BECh. 10 - Prob. 10.34BECh. 10 - Prob. 10.35BECh. 10 - Prob. 10.36BECh. 10 - Prob. 10.37BECh. 10 - Prob. 10.38BECh. 10 - Prob. 10.39BECh. 10 - Prob. 10.40BECh. 10 - Prob. 10.41BECh. 10 - Sustainability and the balanced scorecard...Ch. 10 - Prepare a budget with different volumes for...Ch. 10 - Prepare and interpret a performance report...Ch. 10 - Prob. 10.45APCh. 10 - Prob. 10.46APCh. 10 - Prob. 10.47APCh. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.49BPCh. 10 - Prob. 10.50BPCh. 10 - Evaluate divisional performance (Learning...Ch. 10 - Prob. 10.52BPCh. 10 - Determine transfer price at a manufacturer under...Ch. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.55SC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Johnston Bookstore is the bookstore on campus for students and faculty. The bookstore E9-18A Sales budget for a retail organization (Learning Objective 2) shows the following sales projections in units by quarter for the upcoming year School Supplies Apparel Miscellaneous Quarter Books 1,570 200 580 690 1st. ..... 2nd 800 190 330 540 3rd 1,790 240 880 890 4th 670 180 540 440 The average price of an item in each of the departments is as follows: Average sales price per unit Books.. $85 School supplies Apparel.. Miscellaneous. $18 $29 $ 6 Requirement Prepare a sales budget for the upcoming year by quarter for the Johnston Bookstore, with sales categorized by the four product groupings (books, school supplies, apparel, and miscellaneous).arrow_forwardLearning Objective 5 Sales Manufacturing costs Selling and administrative expenses Capital expenditures The company expects to sell about 10 % of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of $48,000, marketable securities of $68,000, and accounts receivable of $139,000 ($30,000 from July sales and $109,000 from August sales). Sales on account for July and August were $100,000 and $109,000, respectively. Current liabilities as of September 1…arrow_forwarding price of $26 per case. The following information relates to the budget for Main Street a flexible budget performance report (Learning Objective 5) Main Street Muffins sells its muffins to restaurants and coffee houses for an average sell- Muffins for this year (all figures are annual totals unless otherwise noted): Performance Evaluation 629 E10-26A Prepare Budgeted sales in cases 9,100 cases Packaging cost per case. %24 Shipping expense per case Sales commission expense. 2 5% of sales price Salaries expense.. $6,500 Office rent $3,900 Depreciation. $2,500 Insurance expense... $1,800 $ 900 Office supplies expense. During the year, Main Street Muffins actually sold 9,500 cases, resulting in total sales rev- enue of $255,200. Actual expenses (in total) from this year are as follows: Packaging cost. $ 10,600 $ 19,500 $ 12,760 $ 7,300 Shipping expense.. Sales commission expense. Salaries expense... $ 3,900 $ 2,500 $ 1,600 Office rent Depreciation. Insurance expense.. $ 1,600 Office…arrow_forward
- Prepare Hilton goods sold computations. 2. Prepare a combined cash budget similar to exhibits in the chapter. If no financing ac- P9-61A Cash budgets (Learning Objective 3) and cash disbursements: are as follows: Budgeted Sales Revenue $62,000 January $70,000 February. b. Actual purchases of direct materials in December were $24,500. The companye purchases of direct materials in January are budgeted to be $24,000 and $26.000 i February. All purchases are paid 40% in the month of purchase and 60% the follow month. c. Salaries and sales commissions are also paid half in the month earned and half the next month. Actual salaries were $8,000 in December. Budgeted salaries in Janu- ary are $9,000 and February budgeted salaries are $10,500. Sales commissions each month are 8% of that month's sales. d. Rent expense is $3,500 per month. e. Depreciation is $2,100 per month. f. Estimated income tax payments are made at the end of January. The estimated tax payment is projected to be $12,500. g.…arrow_forwardDuring the last 5 years, the advertising manager for a corporation has gathered the following data that shows the relationship between the advertising budget (in millions of dollars) and the total sales (in thousands of units). Advertising Budget (x) $4.4 $6.6 $3.3 $3.6 $4.5 (in millions) Sales (y) (in thousands) 37 46 42 32 29 Copy Data Step 2 of 2: Estimate the sales if $1.3 million is budgeted for advertising. Round your answer to the nearest unit, if necessary.arrow_forwardIn Organizational Development (OD), each area of OD has its own budget to maintain. Please create a spreadsheet indicating the following purchases for the different OD areas and the remaining balance for each department based on the beginning budget and purchases as indicated. The Center for the Advancement of Teaching and Learning Beginning Budget $60,000 Speaker Books Speaker Gifts $2,000 100 @ $22.50 each $200.00 Leadership Development Beginning Budget $40,000 Retreat Location Rental Retreat Lunch Conference Awards $8,000 $11.00 each for 72 attendees $9,000 $8,800 Creative and Strategic Initiatives Beginning Budget $25,000 Camera Software Digital subscriptions $7,000 $2,000 $550.00arrow_forward
- Given the following information, prepare an annual income statement budget for the Great Student Corporation as of 12/31/2018. 1. Sales: 1000 Units; Price $1,000 per Unit 2. Cost of Goods Sold (COGS): 60% of Sales 3. Wages: 15 Employees; Average Cost per Employee $15000 4. SGA Expenses: 12% of Sales 5. Depreciation: Straight Line $4000 per year 6. Interest Expense: 1% of Sales What was the company's budgeted gross profit? O A. $403,000 O B. $400,000 O C. $41,000 O D. $359,000arrow_forwardShow in excel format - 9. The sales for Re - Works Inc., a company that fabricates iron fencing from recycled metals, are all on account. For the first three months of the year, Re - Works management expects the following sales: A table shows Re - Works Inc's sales for January ($120,000), February ($130,000) and March ($140,000). Based on past collection patterns, management expects the following: A table shows Re - Works Inc's collection patterns in the month of February showing month of sale (10%), month after sale (50%), and the remainder - second month after sale (40%). Also, based on past experience, management forecasts that 5 percent of accounts receivable will be uncollectible and will eventually be written off. What are the expected cash receipts for March? 10. With the same sales forecasts as in question 9, Re - Works Inc. management would like to implement some changes to credit policy and credit terms that they believe would change the collection pattern going forward and…arrow_forwardPerformance reportPrepare a performance report for the dining room of Leonardo’sItalian Cafe ́ for the month of February 2011, using the followingdata:Budgeted Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,300 $4,150Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,650 1,500Utilities ............................................... 2,200 2,050Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500Actual Data: January FebruaryDining room wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,700 $4,400Laundry and housekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 1,400Utilities ............................................... 2,350 2,100Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,500arrow_forward
- Refer to the data for The Terminator Inc. in Brief Exercise 8–6. A management intern has suggested thatthe budgeted revenues and costs should be adjusted for the actual level of activity in April before they arecompared to the actual revenues and costs. Because the actual level of activity was 5% higher than budgeted, the intern suggested that all budgeted revenues and costs should be adjusted upward by 5%. A reportcomparing the budgeted revenues and costs, with this adjustment, to the actual revenues and costs appearson the following page.The Terminator Inc.Variance ReportFor the Month Ended April 30AdjustedPlanning ActualBudget Results VariancesJobs ............................................. 105 105Revenue ...................................... $20,475 $20,520 $ 45 FExpenses:Mobile team operating costs .... 10,500 10,320 180 FExterminating supplies ............. 1,890 960 930 FAdvertising ............................... 840 800 40 FDispatching costs ..................... 2,310…arrow_forwardRequired: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). Note: Do not round your intermediate calculations. April May June 2nd Quarter Total 1. Budgeted Sales Revenue $6,250selected answer correct $7,500selected answer correct $10,000selected answer correct $23,750 2. Budgeted Production in Units 270selected answer correct 340selected answer correct 390selected answer correct 1,000not attempted 3. Budgeted Cost of Direct Material Purchases $4,656selected answer incorrect not attempted not attempted $4,656 4. Budgeted Direct Labor Cost not attempted not attempted not attempted $0 5. Budgeted Manufacturing Overhead not attempted not attempted not attempted $0 6. Budgeted Cost of Goods Sold not attempted not attempted not attempted $0 7. Total Budgeted Selling and Administrative Expensearrow_forwardRoberds Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: Fixed element per month Variable element per student Variable element per course Revenue $ 0 $ 298 $ 0 Faculty wages $ 0 $ 0 $ 3,100 Course supplies $ 0 $ 52 $ 40 Administrative expenses $ 26,500 $ 27 $ 52 In March, the school budgeted for 1,910 students and 88 courses. The school's income statement showing the actual results for the month appears below: Roberds Tech Income Statement For the Month Ended March 31 Actual students 1,810 Actual courses 91 Revenue $ 411,340 Expenses: Faculty wages 214,950 Course supplies 62,590 Administrative expenses 84,562 Total expense 362,102 Net operating income $ 49,238 Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Why do we need accounting?; Author: EconClips;https://www.youtube.com/watch?v=weCXE2wIl90;License: Standard Youtube License