Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 8E
To determine
Introduction: The difference between the planning budget and the flexible budget is known as activity variance. It arises due to the difference between the planned activity level and the actual activity level.
The planning budget for June.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 1
Shiashi Ltd is preparing its manufacturing overhead budget for 2024. Relevant data consist of the
following:
- Units to be produced (by quarters): 20,000, 24,000, 34,000 and 36,000.
Direct labour: Time is 1.5 hours per unit.
Variable overhead costs per direct labour hour: Indirect materials GH¢1.40;
indirect labour GH 2.40 and maintenance $1.50.
Fixed overhead costs per quarter: Supervisory salaries GH 55,000; depreciation
GH 27,000 and maintenance GH¢25,000.
a) You are required to prepare the manufacturing overhead budget for the year, showing
quarterly data.
b) What does an organisation stand to gain by preparing annual budgets for its operations?
c) Describe the budgeting process of any business entity that you are familiar with.
Cost Accounting
The following budget is prepared by the Production manager for the last quarter of 2021:Units Total CostOctober 7500 530000November 6000 440000December 5000 380000
1. What is the variable cost per unit? ______2. How much is the fixed cost? ______3. What is the estimated budget for 6500 units?______
Part B
Tamy Sdn Bhd produces wooden desks. The following estimates are provided for the
month of May, June, July and August 2021.
Budgeted wooden desk sales in units
8,000
7,000
6,000
5,000
May
June
July
August
The estimated selling price is RM120 per unit. Tamy Sdn Bhd wants to have 10% of
the next month's sales in units on hand at the end of each month.
REQUIRED
a) Prepare the sales budget for the month of May, June , July and Total 2021.
b) Prepare the production budget for the month of May, June, July and Total 2021.
Chapter 9 Solutions
Managerial Accounting
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - Prob. 10Q
Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24CCh. 9 - Prob. 25CCh. 9 - Prob. 26C
Knowledge Booster
Similar questions
- Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget? FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKicks best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Required: 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. 2. What if FlashKick added a third linetournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of 45 each in January and February, and 48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.arrow_forwardRefer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?arrow_forwardPreparing a Direct Labor Budget Tulum Inc. makes a Mexican chocolate mix. Planned production in units for the first 3 months of the coming year is: Each box of chocolate mix takes 0.4 direct labor hour. The average wage is 17 per hour. Required: Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter.arrow_forward
- Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?arrow_forwardA company has the following budget formula for annual electricity expense in its shop: Expense = P 7,200 + (P0.60 x units produced) If management expects to produce 200,000 units during March, the appropriate budget for electricity would be. P 7,200 P 12,000 P 12,600 P 19,200 Group of answer choices 1 2 3 4arrow_forward4.4 Prepare a direct labor budget for each of the upcoming five years. Direct Labor Budget To determine how many labor hours will be required to create the items listed in the cost of production, the direct labor budget is used. A more intricate direct labor budget will compute both the overall number of hours required and the breakdown of those hours by labor type. Years Required production in 4200 units 2023 Direct labor hours per 0,25 unit Total direct labor- 1,050 hours needed Direct labor cost per hour Total Direct Labor Cost $32 $33600 2024 5200 0,25 1,300 $32 $41600 2025 6200 0,25 1,550 $32 $49600 2026 7200 0,25 1,800 $32 2027 8200 0,25 2,050 $32 $57600 $65600 Total 31000 0,25 7,750 $32 $248000arrow_forward
- Exercise 4 (Direct Labor Budget) The Production Department of the Laguna Plant of JC Corporation has submitted the following forecast of units to be produced at the plant for each quarter of the upcoming fiscal year. The plant produces high-end outdoor barbeque grills. 1st quarter 2 quarter 3rd quarter 4 quarter Units to be produced... 5,000 4,400 4,500 4,900 Each unit requires 0.40 direct labor-hours and direct labor-hour workers paid P11 per hour. Required: 1. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the forecasted numberof unitsproduced. 2. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is not adjusted each quarter. Instead, assume that the company's direct labor work force consists of \ permanent employees who are guaranteed to be paid for at least 1,800 hours of work…arrow_forwardQUESTION 8 Avery Company has compiled the following data for the upcoming year: Sales are expected to be 13300 units at $31 each. • Each unit requires 2.1 pounds of direct materials at $2.1 per pound. • Each unit requires 0.7 hours of direct labor at $14 per hour. Manufacturing overhead is $6 per unit. Selling and administrative costs are $6 per unit What is Avery's budgeted cost of goods sold? M Azarrow_forwardQuestion A5 A company manufactures and sells one product. Budgeted sales units for the next period are 5,500. (a) Opening inventory is expected to be 400 units and planned to increase by 50% by the end of the period. What is the production budget in units? (b) Define the term 'Sunk cost'.arrow_forward
- Part #6: H Company’s Direct Labor Budget indicates the number of direct labor hours to be used in July, August, and September are 21,000 and 18,900 and 23,000 respectively. Variable overhead is expected to be $0.90 per direct labor hour. Fixed overhead per month is expected to be $8,200. Prepare an Overhead Budget with columns for July, August, September, and Total 3rd Quarter.arrow_forwardExercise 4 (Direct Labor Budget) The Production Department of the Laguna Plant of JC Corporation has submitted the following forecast of units to be produced at the plant for each quarter of the upcoming fiscal year. The plant produces high-end outdoor barbeque grills. 1st quarter 2 quarter 3rd quarter 4 quarter Units to be produced..... 5,000 4,400 4,500 4,900 Each unit requires 0.40 direct labor-hours and direct labor-hour workers paid P11 per hour. Required: Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is not adjusted each quarter. Instead, assume that the company's direct labor work force consists…arrow_forwardA company has the following budget formula for annual electricity expense in its shop: Expense = P 7,200 + (PO.60 x units produced) If management expects to produce 200,000 units during March, the appropriate budget for electricity would be. 1. P 7,200 2. P 12,000 3. P 12,600 4. P 19,200 О1 04arrow_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
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
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
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
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