Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 15, Problem 15.25C
Case 15.25
LO 3
Performance reporting The chair of the Science Department of State University has a budget for laboratory supplies. Supplies have a variable cost behavior pattern that is a function of the number of students enrolled in laboratory courses. For planning purposes, when the budget was prepared in March 2016, it was estimated that 300 students would be
enrolled in laboratory courses during the fall 2016 semester. Actual enrollment for the fall semester was 318 students.
Required:
- Explain what action should be taken with respect to the supplies budget when the actual enrollment is known.
- Would your answer to part a be any different if the actual enrollment turned out to be 273 students? Explain your answer.
- Suppose the budget item in question was the salary for the lab assistant. How would your answer to part a and part b change, if at all? Explain your answer.
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Question #2
Sunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis:
Budgeted Results
Product
Total Sales $
Volume/units
Price $
Contribution margin per unit $
Total contribution margin $
RG
585,000
900
650
820
738,000
KC
500,000
500
1,000
850
425,000
MG
300,000
600
500
720
432,000
Total
2,000
1,595,000
Actual Results
Product
Total Sales $
Volume/units
Price $
Contribution margin per unit $
Total contribution margin $
RG
500,000
500
1,000
800
400,000
KC
270,000
300
900
`900
270,000
MG
105,000
350
300
700
245,000
Total
1,150
915,000
Required
Total sales…
BUDGETING
A BUSINESS SCENARIO - STEP 5
FIXED COST BUDGET
Fixed costs budget will be different for every organization and will depend upon what sort of resources are consumed by each
entity..
Budg expects her fixed costs and her capital expenditure for the next three months to be as follows:
●
●
●
Rent on the new workshop of $3,000 will be paid in January to cover the months of January, February and March.
New machinery and tools will cost $15,000 and will be delivered and paid for in January. These new non-current assets will
have an expected useful life of five years and should be depreciated on the straight line basis.
She anticipates that she will receive and pay an electricity bill in March covering the period 1 January to 15 March. She
expects that this bill will be for around $1,500. Budg estimates that the new workshop will use a further $300 of electricity
between 16th and 31st March. Each month of operation should be allocated an equal amount of electricity cost.
An invoice…
II. SALES VARIANCE ANALYSIS
The Furniluxe manufactures two types of study desk: one for the residential market, and the other for
the school market. Budgeted and actual operating data for the year 2022 are:
Static Budget
Number of desk sold
Contribution margin
Residential
School
390,000
$39,000,000
210,000
$16,800,000
Total
600,000
$55,800,000
School
Total
580,000
$48,720,000
Actual Results
Residential
Number of desk sold
Contribution margin
232,000
348,000
$20,880,000
$27,840,000
The Furnilixe prepared the budget for 2022 assuming a 15% market share based on total desk sales in
the region. The total desk market was estimated to reach sales of 4,000,000 desks. However, actual
total sales volume was 3,625,000 desks.
Required:
Compute the following variances in terms of contribution margin:
1. Compute the total sales-volume variance. (3%)
2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%)
3. Compute the market share variance and the market size…
Chapter 15 Solutions
Accounting: What the Numbers Mean
Ch. 15 - Prob. 15.1MECh. 15 - Prob. 15.2MECh. 15 - Prob. 15.3MECh. 15 - Prob. 15.4MECh. 15 - Mini-Exercise 15.5 LO 4, 5, 6 Variable overhead...Ch. 15 - Mini-Exercise 15.6
LO 4. 5, 6
Fixed overhead...Ch. 15 - Prob. 15.7ECh. 15 - Prob. 15.8ECh. 15 - Prob. 15.9ECh. 15 - Prob. 15.10E
Ch. 15 - Prob. 15.11ECh. 15 - Prob. 15.12ECh. 15 - Exercise 15.13 LO 4. 5 Direct material...Ch. 15 - Exercise 15.14 LO 4, 5 Direct material...Ch. 15 - Prob. 15.15ECh. 15 - Prob. 15.16ECh. 15 - Exercise 15.17 LO 9 Investment center analysis;...Ch. 15 - Prob. 15.18ECh. 15 - Problem 15.19 LO 4. 5 Calculate variable cost...Ch. 15 - Problem 15.20 LO 4. 5 Calculate variable cost...Ch. 15 - Problem 15.21 LO 4, 5 Direct labor...Ch. 15 - Problem 15.22 LO 4, 5 Direct labor...Ch. 15 - Problem 15.23 LO 5, 6 Fixed overhead...Ch. 15 - Case 15.25 LO 3 Performance reporting The chair of...Ch. 15 - Case 15.26 LO 3 Flexible budgeting One of the...Ch. 15 - Case 15.27 LO 4 Frequency of performance reporting...Ch. 15 - Case 15.28 LO 5 Rank the importance of eight...Ch. 15 - Case 15.29 LO 4. 5 Direct material variances-the...Ch. 15 - Case 15.30 LO 5 Evaluate the effects of erroneous...Ch. 15 - Prob. 15.31CCh. 15 - Case 15.32 The planning and control environment:...
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