Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 6E
a.
To determine
Prepare an income statement with the budgeted and actual figures for the internal use, for Company D.
b.
To determine
Indicate the variances as favorable (F) or unfavorable (U).
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Problem 10-50: Comprehensive Profit Plan
Background
Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2016 follow:
Finished Components
C12
D57
Requirements for each finished component:
RM1
10
pounds
8
RM2
0
4
RM3
2
pounds
1
Direct labor
2
hours
3
Product information:
Sales price
$150
$220
Sales units
12,000
9,000
Estimated beginning inventory (units)
400
150
Desired ending inventory (units)
300
200
Direct Materials Information
RM1
RM2
RM3
Cost per pound
$2.00
$2.50
$0.50
Estimated beginning inventory in pounds
3,000
1,500
1,000
Desired ending inventory in pounds…
Exercise 18-13 (Algo) Computing sales to achieve target income LO C2
Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's
annual fixed costs are $916,400. Management targets an annual income of $1,450,000.
(1) Compute the unit sales to earn the target income.
Numerator:
1
1
Denominator:
(2) Compute the dollar sales to earn the target income.
Numerator:
1
1
Denominator:
=
||
=
=
||
Units to Achieve Target
Units to achieve target
0
Dollars to Achieve Target
Dollars to achieve target
0
Problem 10-50: Comprehensive Profit Plan
Background
Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2016 follow:
Finished Components
C12
D57
Requirements for each finished component:
RM1
10
pounds
8
RM2
0
4
RM3
2
pounds
1
Direct labor
2
hours
3
Product information:
Sales price
$150
$220
Sales units
12,000
9,000
Estimated beginning inventory (units)
400
150
Desired ending inventory (units)
300
200
Direct Materials Information
RM1
RM2
RM3
Cost per pound
$2.00
$2.50
$0.50
Estimated beginning inventory in pounds
3,000
1,500
1,000
Desired ending inventory in pounds…
Chapter 15 Solutions
Survey Of Accounting
Ch. 15 - 1. Pam Kelly says she has no faith in budgets. Her...Ch. 15 - 7. What is a responsibility center?Ch. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - Prob. 5QCh. 15 - 3. When are sales and cost variances favorable and...Ch. 15 - 4. Joan Mason, the marketing manager for a large...Ch. 15 - Prob. 8QCh. 15 - Prob. 9QCh. 15 - Prob. 10Q
Ch. 15 - Prob. 11QCh. 15 - 9. Minnie Divers, the manager of the marketing...Ch. 15 - 6. How do responsibility reports promote the...Ch. 15 - Prob. 14QCh. 15 - Prob. 15QCh. 15 - Prob. 16QCh. 15 - 12. How can a residual income approach to...Ch. 15 - Prob. 18QCh. 15 - Exercise 9-6A Evaluating a profit center Helen...Ch. 15 - Prob. 2ECh. 15 - Prob. 3ECh. 15 - Prob. 4ECh. 15 - Exercise 8-3A Determining amount and type...Ch. 15 - Prob. 6ECh. 15 - Exercise 8-4A Determining sales and variable cost...Ch. 15 - Exercise 8-5A Determining flexible budget...Ch. 15 - Exercise 8-9A Responsibility for the fixed cost...Ch. 15 - Prob. 10ECh. 15 - Exercise 8-7A Evaluating a decision to increase...Ch. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - Exercise 9-9A Residual income Climax Corporation...Ch. 15 - Residual income Gletchen Cough Drops operates two...Ch. 15 - Prob. 16ECh. 15 - Prob. 17ECh. 15 - Prob. 18PCh. 15 - Prob. 19PCh. 15 - Prob. 20PCh. 15 - Prob. 21PCh. 15 - Problem 9-20A Return on investment Sorrento...Ch. 15 - Problem 9-21A Comparing return on investment and...Ch. 15 - Comparing return on investment and residual income...Ch. 15 - ATC 8-1 Business Applications Case Static versus...Ch. 15 - Prob. 2ATCCh. 15 - Prob. 3ATCCh. 15 - ATC 9-1 Business Applications Case Analyzing...Ch. 15 - Prob. 5ATC
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- Problem 10-50: Comprehensive Profit Plan Background Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2016 follow: Finished Components C12 D57 Requirements for each finished component: RM1 10 pounds 8 RM2 0 4 RM3 2 pounds 1 Direct labor 2 hours 3 Product information: Sales price $150 $220 Sales units 12,000 9,000 Estimated beginning inventory (units) 400 150 Desired ending inventory (units) 300 200 Direct Materials Information RM1 RM2 RM3 Cost per pound $2.00 $2.50 $0.50 Estimated beginning inventory in pounds 3,000 1,500 1,000 Desired ending inventory in pounds 4,000 1,000 1,500…arrow_forwardMercury Travel Contribution Margin Income Statement Three Months Ended March 31, 2016 Net Sales Revenue $315,500 Variable Costs 138,820 Contribution Margin 176,680 Fixed Costs 175,000 Operating Income $1,680 Mercury'sMercury's relevant range is between sales of $248,000 and $363,000. Prepare contribution margin income statements for $248,000sales level. Mercury Travel Contribution Margin Income Statement Three Months Ended March 31, 2016 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income (Loss)arrow_forwardUse formula as needed. Do not hardcode. 3. Calculate the following for both divisions using appropriate formula: - Variable costs per unit - Contribution margin per unit - Break-even units Use Roundup formula in Excel to round up to full unit. The general roundup formula for break-even will be: =ROUNDUP(Total Fixed costs/Contribution margin per unit,0). - Break-even sales in dollar - Margin of safety in percentage - Operating leverage not incomearrow_forward
- Wildhorse Company has the following information available for September 2022. Unit selling price of video game consoles Unit variable costs Total fixed costs Units sold $470 $329 $50,760 600arrow_forwardProduct: Complan Revenue per unit Total Variable Costs of Goods Sold Total Fixed Costs of Goods Sold B D ASSUMPTIONS Denver Santa Fe $30 $900,000 $30 $2,520,000 $1,650,000 $0 $150,000 $200,000 $320,000 $300,000 2 Total Variable Selling and Administration Expenses Total Fixed Selling and Administration Expenses Quarterly volume of units sold in the fourth quarter 20Y3 200,000 200,000 Projected Contribution Margin based Income Statement For Fourth quarter 20Y2 Sales Total Variable costs Contribution margin Denver $ Santa Fe $ An $6,000,000 $6,000,000 Co $1,050,000 $2,720,000 Co $4,950,000 $3,280,000 Co $1,970,000 $300,000 Cor $2,980,000 $2,980,000 Cor Total Fixed costs Net income 3 Calculate the followings: Variable Cost per unit Contribution Margin per unit Break Even units (use Roundup formula) Break Even sales (Break even units x Selling price per unit) Margin of Safety percentage Operating Leverage Denver Santa Fe $5.25 $24.75 79,596.00 $2,387,880 60.20% 1.66 Project Description Part…arrow_forwardGates Manufacturing operations for 2021 are as follows: $Per unit: Sales price 100 Direct material cost 36 Direct wages 8 Variable production overhead 6Per month: Fixed production overhead 198 000 Fixed selling expenses 24 000 Fixed administration expenses 52 000Variable selling expenses is 10% of sales value.Normal capacity was 11 000 units per month. January February Units UnitsSales 20 000 24 000Production 24 000 20 000 Using the two methods:C. Prepare the Marginal Income Statement and the Absorption Income Statement for March and Aprilarrow_forward
- Contribution Margin Analysis—Sales The following data for Romero Products Inc. are available: For the Year Ended December 31 Actual Planned Difference—Increase or (Decrease) Sales $1,958,400 $1,764,000 $194,400 Variable costs: Variable cost of goods sold $1,040,400 $940,800 $99,600 Variable selling and administrative expenses 204,000 196,000 8,000 Total variable costs $1,244,400 $1,136,800 $107,600 Contribution margin $714,000 $627,200 $86,800 Number of units sold 20,400 19,600 Per unit: Sales price $96 $90 Variable cost of goods sold 51 48 Variable selling and administrative expenses 10 10 Prepare an analysis of the sales quantity and unit price factors. Romero Products Inc. Contribution Margin Analysis—Sales For the Year Ended December 31 Effect of changes in sales: Sales quantity factor $ Unit price factor Total effect of changes in sales $arrow_forwardBlossom Company has the following information available for September 2022. Unit selling price of video game consoles Unit variable costs Total fixed costs Units sold $400 $320 $24,000 600arrow_forwardFranklin Modems, Inc. makes modem cards that are used In notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash. 1. Acquired $820,000 of cash from the owners. 2. Purchased $305,900 of manufacturing equipment. The equipment has a $37,000 salvage value and a four-year useful life. 3. The company started and completed 5,700 modems. Direct materials purchased and used amounted to $47 per unit. 4. Direct labor costs amounted to $32 per unit. 5. The cost of manufacturing supplies used amounted to $11 per unit. 6. The company paid $57,800 to rent the manufacturing facility. 7. Franklin sold all 5,70e units at a cash price of $155 per unit. 8. The sales staff was paid a $9.50 per unit sales commission. 9. Paid $46,eee to purchase equipment for administrative offices. The equipment was expected to have a $3,700 salvage value and a three-year useful life. 10. Administrative expenses consisting of office rental and salaries…arrow_forward
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