Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 7E
Planning Budget
Lavage Rapide is a Canadian company that owns and operates a Large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: 
For example, electricity costs are $1.200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.
Required:
Using Exhibit 9−2 as your guide, prepare the company’s planning budget for August.
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Students have asked these similar questions
A. State and explain two objectives of business in preparing budget. Provide example
where necessary.
B. Kinetic Manufacturing maħufactures small robots that function as a timekeeper. It
expects to produce 4,000 units each month. Budgeted variable manufacturing costs
per unit are direct materials RM7, direct labour RM5 and overhead RM10. Monthly
budgeted fixed manufacturing overhead costs are RM4,500 for depreciation and
RM3,000 for rental.
In the current month, Kinetic Manufacturing produced 4,100 units of small robots and
incurred the following costs: direct material RM28,290, direct labour RM22,000,
variable overthead RM44,000, depreciation RM4,500 and rental RM3,000.
Required:
Prepare a performance report using flexible budget for 4,100 units of output. For
each expense, determine the type of variance; favourable or unfavourable.
Based on the performance report prepare in (i), discuss the performance of
Kinetic Manufacturing for the current month.
Product Costs using Activity Rates
Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is $121,100, and 17,300 orders are estimated to be processed.
a. Determine the activity rate of the sales order processing activity.$ per sales order
b. Determine the amount of sales order processing cost that Nozama.com would receive if it had 9,900 sales orders.$
A. State and explain two objectives of business in preparing budget. Provide example
where necessary.
B. Kinetic Manufacturing mahufactures small robots that function as a timekeeper. It
expects to produce 4,000 units each month. Budgeted variable manufacturing costs
per unit are direct materials RM7, direct labour RM5 and overhead RM10. Monthly
budgeted fixed manufacturing overhead costs are RM4,500 for depreciation and
RM3,000 for rental.
In the current month, Kinetic Manufacturing produced 4,100 units of small robots and
incurred the following costs: direct material RM28,290, direct labour RM22,000,
variable overhead RM44,000, depreciation RM4,500 and rental RM3,000.
Required:
Prepare a performance report using flexible budget for 4,100 units of output. For
each expense, determine the type of variance; favourable or unfavourable.
Based on the performance report prepare in (i), discuss the performance of
Kinetic Manufacturing for the current month.
Chapter 9 Solutions
Introduction To Managerial Accounting
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