Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 7, Problem 5P
Selling and administrative expense budget and
Budgeted selling and administrative expenses for Scottsdale Styles Inc. in P7-4 for the year ended December 31, 2016, were as follows:
Required:
- 1. Prepare a selling and administrative expenses budget, in good form, for the year 2016.
- 2. Using the information above and the budgets prepared in P7-4, prepare a budgeted income statement for the year 2016, assuming an income tax rate of 30%.
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Budgeted income statement and balance sheet
As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 2018, is
prepared by the Accounting Department of Regina Soap Co.:
Cash
Accounts Receivable
Finished Goods
Work in Process
Materials
$100,200
190,400
40,000
26,700
43,800
Prepaid Expenses
3,200
Plant and Equipment
518,000
Accumulated Depreciation-Plant and Equipment
$222,700
Accounts Payable
136,300
Common Stock, $10 par
Retained Earnings
350,000
$922,300
213,300
$922,300
Factory output and sales for 20Y9 are expected to total 25,000 units of product, which are to be sold at $110 per unit. The quantities and costs of the inventories at December 31, 20Y9, are
expected to remain unchanged from the balances at the beginning of the year.
Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:
Estimated Costs and Expenses…
Splish Company has accumulated the following budget data for the year 2022:
1.
2.
3.
4.
5.
6.
19
Sales: 27,900 units; unit selling price $82
Cost of one unit of finished goods: direct materials, 2 kg at $5 per kilogram; direct labour, 3 hours at $13 per hour; and
manufacturing overhead, $6 per direct labour hour
Inventories (raw materials only): beginning, 9,900 kg; ending, 14,100 kg
Raw materials cost: $5 per kilogram
Selling and administrative expenses: $201,000
Income taxes: 30% of income before income taxes
shown below are the totals from 2018 period budgets.
Revenue badget P 100,000
Materials usage from production budget 15,000
Labor cost budget 20,000
Manufacturing overhead budget 20,000
General and administrative budget 30,000
Capital Expenditure budget 20,000
Work in progress inventories
Beginning of 2018 10,000
End of 2018 5,000
Finished goods inventory
Beginning of 2018 15,000
End of 2018 10,000
Tax Rate 40%
1. prepared a forecasts income statement for the year.
Chapter 7 Solutions
Principles of Cost Accounting
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - Prob. 4QCh. 7 - Explain zero-based budgeting and how it differs...Ch. 7 - Prob. 6QCh. 7 - Which operating budget must be prepared before the...Ch. 7 - Prob. 8QCh. 7 - Why is it important to have front-line managers...Ch. 7 - If the sales forecast estimates that 50,000 units...
Ch. 7 - What are the advantages and disadvantages of each...Ch. 7 - What three operating budgets can be prepared...Ch. 7 - Prob. 13QCh. 7 - What are the three budgets that are needed in...Ch. 7 - Why might Web-based budgeting be more useful than...Ch. 7 - What is a flexible budget?Ch. 7 - Why is a flexible budget better than a master...Ch. 7 - Why is it important to distinguish between...Ch. 7 - Why is the concept of relevant range important...Ch. 7 - In comparing actual sales revenue to flexible...Ch. 7 - How would you define the following? a. Theoretical...Ch. 7 - Is it possible for a factory to operate at more...Ch. 7 - If a factory operates at 100% of capacity one...Ch. 7 - How is the standard cost per unit for factory...Ch. 7 - When allocating service department costs to...Ch. 7 - The sales department of Macro Manufacturing Co....Ch. 7 - The sales department of F. Pollard Manufacturing...Ch. 7 - Barnes Manufacturing Co. forecast October sales to...Ch. 7 - Prepare a cost of goods sold budget for the Crest...Ch. 7 - Prepare a cost of goods sold budget for MacLaren...Ch. 7 - Roman Inc. has the following totals from its...Ch. 7 - Starburst Inc. has the following items and amounts...Ch. 7 - Using the following per-unit and total amounts,...Ch. 7 - Cortez Manufacturing, Inc. has the following...Ch. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Calculating factory overhead The normal capacity...Ch. 7 - The Sales Department of Minimus Inc. has forecast...Ch. 7 - Sales, production, direct materials, direct labor,...Ch. 7 - Budgeted selling and administrative expenses for...Ch. 7 - Prob. 4PCh. 7 - Selling and administrative expense budget and...Ch. 7 - Preparing a flexible budget Use the information in...Ch. 7 - Preparing a performance report Use the flexible...Ch. 7 - Preparing a performance report Use the flexible...Ch. 7 - Flexible budget for factory overhead Presented...Ch. 7 - Prob. 10PCh. 7 - Overhead application rate Creole Manufacturing...Ch. 7 - Overhead application rate Roll Tide Manufacturing...Ch. 7 - Flexible budgeting, performance measurement, and...
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