Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 48BEB
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Compute the dollar amount of Direct Material "A" to be used in production during the year,
given the following info:
Budgeted Sales for the year = 640,000 units
Estimated Beg. Inventory = 108,000 units
Desired End. Inventory = 90,000 units
The Quantities of Direct Materials expected to be used for each Unit of finished product
are as follows:
Material A = 0.5 lb. per unit @ $0.60 per lb.
Material B 1.0 lb. per unit @ $1.70 per lb.
Material C= 1.2 lb. per unit @ $1.00 per lb.
O $186,600.00
$210,600.00
O$181,200.00
$240,000.00
Prepare a flexible production budget for the year ending December 31 for Cedar Jeans Company using production levels of 16,000, 18,000, and 20,000 units produced. The following additional information is necessary to complete the budget:
Variable costs:
Direct labor ($6.00 per unit)
Direct materials ($8.00 per unit)
Variable manufacturing costs ($2.50 per unit)
Fixed costs:
Supervisor's salaries
$80,000
Rent
12,000
Depreciation on equipment
24,000
Required: Account
Chapter 9 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 9 - Define the term budget. How are budgets used in...Ch. 9 - Prob. 2DQCh. 9 - Explain how both small and large organizations can...Ch. 9 - Prob. 4DQCh. 9 - What is a master budget? An operating budget? A...Ch. 9 - Explain the role of a sales forecast in budgeting....Ch. 9 - All budgets depend on the sales budget. Is this...Ch. 9 - Why is goal congruence important?Ch. 9 - Why is it important for a manager to receive...Ch. 9 - What is participative budgeting? Discuss some of...
Ch. 9 - A budget too easily achieved will lead to...Ch. 9 - Explain why a manager has an incentive to build...Ch. 9 - Discuss the differences between static and...Ch. 9 - Explain why mixed costs must be broken down into...Ch. 9 - What is the purpose of a before-the-fact flexible...Ch. 9 - Prob. 1MCQCh. 9 - Which of the following is part of the control...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - The budget committee a. reviews the budget. b....Ch. 9 - A moving, 12-month budget that is updated monthly...Ch. 9 - Which of the following is not part of the...Ch. 9 - Before a direct materials purchases budget can be...Ch. 9 - The first step in preparing the sales budget is to...Ch. 9 - Which of the following is needed to prepare the...Ch. 9 - A company requires 100 pounds of plastic to meet...Ch. 9 - A company plans to sell 220 units. The selling...Ch. 9 - Select the one budget below that is not an...Ch. 9 - A company has the following collection pattern:...Ch. 9 - The percentage of accounts receivable that is...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - Prob. 16MCQCh. 9 - For performance reporting, it is best to compare...Ch. 9 - To create a meaningful performance report, actual...Ch. 9 - To help assess performance, managers should use a...Ch. 9 - A firm comparing the actual variable costs of...Ch. 9 - Preparing a Sales Budget Patrick Inc. sells...Ch. 9 - Preparing a Production Budget Patrick Inc. makes...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Patrick Inc. makes...Ch. 9 - Preparing an Overhead Budget Patrick Inc. makes...Ch. 9 - Preparing an Ending Finished Goods Inventory...Ch. 9 - Preparing a Cost of Goods Sold Budget Andrews...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Oliver...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Preparing an Accounts Payable Schedule Wight Inc....Ch. 9 - Preparing a Cash Budget La Famiglia Pizzeria...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Preparing a Sales Budget Tulum Inc. sells powdered...Ch. 9 - Preparing a Production Budget Tulum Inc. makes a...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Tulum Inc. makes a...Ch. 9 - Preparing an Overhead Budget Tulum Inc. makes a...Ch. 9 - Prob. 40BEBCh. 9 - Preparing a Cost of Goods Sold Budget Lazlo...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Jameson...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Pilsner Inc. purchases raw materials on account...Ch. 9 - Preparing a Cash Budget Olivers Bistro provided...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Planning and Control a. Dr. Jones, a dentist,...Ch. 9 - Use the following information for Exercises 9-50...Ch. 9 - Prob. 51ECh. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Production Budget Aqua-Pro Inc. produces...Ch. 9 - Direct Materials Purchases Budget Langer Company...Ch. 9 - Direct Labor Budget Evans Company produces asphalt...Ch. 9 - Sales Budget Alger Inc. manufactures six models of...Ch. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Cash Payments Schedule Fein Company provided the...Ch. 9 - Cash Budget The owner of a building supply company...Ch. 9 - Flexible Budget for Various Levels of Production...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Prob. 65PCh. 9 - Operating Budget, Comprehensive Analysis Allison...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Ryan Richards, controller for Grange Retailers,...Ch. 9 - Participative Budgeting, Not-for-Profit Setting...Ch. 9 - Cash Budget The controller of Feinberg Company is...Ch. 9 - Optima Company is a high-technology organization...Ch. 9 - Direct Materials and Direct Labor Budgets Willison...Ch. 9 - Prob. 75PCh. 9 - Prob. 76CCh. 9 - Prob. 77CCh. 9 - Budgetary Performance, Rewards, Ethical Behavior...
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
- 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.arrow_forwardAt 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.arrow_forwardPreparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 31,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:arrow_forward
- 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.arrow_forwardNashler 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?arrow_forwardThe fixed overhead budgeted for Ranier Industries at an expected capacity of 500,000 units is 1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net income at year-end. Data collected over the last three years show the following: Determine the adjustment each year to convert the variable costing income to absorption costing net income. Compute the absorption costing net income for each year.arrow_forward
- Using the provided budgeted information for production of 10,000 and 15,000 units, prepare a flexible budget for 17,000 units.arrow_forwardUsing High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Speedy Petes above. Assume that this information was used to construct the following formula for monthly delivery cost. TotalDeliveryCost=41,850+(12.00NumberofDeliveries) Required: Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations: 1. Calculate total variable delivery cost for January. 2. Calculate total delivery cost for January.arrow_forwardFlexible budget for factory overhead Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month. The predetermined overhead rate is based on normal capacity. Required: 1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90%, and 110% of normal capacity. Also determine the predetermined factory overhead rate at each level of volume in both units and direct labor hours. 2. Prepare a flexible budget for production levels of 80%, 90%, and 110%, assuming that variable costs will vary in direct proportion to the change in volume, but with the following exceptions. (Hint: Set up a third category for semi-variable expenses.) a. At 110% of capacity, another supervisor will be needed at a salary of 24,000 annually. b. At 80% of capacity, the repairs expense will drop to one-half of the amount at 100% capacity. c. At 80% of capacity, one part-time maintenance worker, earning 10,000 a year, will be laid off. d. At 110% of capacity, a machine not normally in use and on which no depreciation is normally recorded will be used in production. Its cost was 12,000, it has a 10-year life, and straight-line depreciation will be taken.arrow_forward
- Prepare a flexible budgeted income for 120,000 units using the following information from a static budget for 100,000 units:arrow_forwardPrepare a flexible budgeted income statement for 47,000 units using the following information from a static budget for 45,000 units:arrow_forwardBudgeted income statement and supporting budgets for three months Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year: Estimated sales at 125 per unit: Estimated finished goods inventories: Work in process inventories are estimated to be insignificant (zero). Estimated direct materials inventories: Manufacturing costs: Selling expenses: Instructions Prepare the following budgets using one column for each month and a total column for the first quarter, as shown for the sales budget: Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labor cost budget for March. Prepare a factory overhead cost budget for March. Prepare a cost of goods sold budget for March. Prepare a selling and administrative expenses budget for March. Prepare a budgeted income statement with budgeted operating income for March.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY