Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 9, Problem 9.1AP
PROBLEMS: SET A
Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2017.
1. Sales: quarter 1, 40,000 bags: quarter 2, 56,000 bags. Selling price is $60 per bag.
2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr al $1,50 per pound.
3. Desired inventory levels:
4. Direct labor direct labor time is 15 minutes per bag at an hourly rate of $16 per hour.
5. Selling and administrative expenses are expected to be 15% of sales plus $175,000 per quarter.
6. Interest expense is $100,000.
7. Income taxes are expected to be 30% of income before income taxes.
Prepare
(LO 2, 3), AP
Your assistant has prepared two budgets: (1) the manufacturing
Instructions
Prepare the budgeted multiple-step income statement for the first 6 months and all required operating budgets by quarters. (Note: Use variable and fixed in the selling and administrative expense budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.
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Oriole Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.
1.
Â
Sales: quarter 1, 28,400 bags; quarter 2, 44,000 bags. Selling price is $62 per bag.
2.
Â
Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.
3.
Â
Desired inventory levels:
Â
Type of Inventory
Â
January 1
Â
April 1
Â
July 1
Snare (bags)
Â
8,100
Â
12,500
Â
18,300
Gumm (pounds)
Â
9,100
Â
10,400
Â
13,100
Tarr (pounds)
Â
14,300
Â
20,200
Â
25,400
Â
4.
Â
Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16Â per hour.
5.
Â
Selling and administrative expenses are expected to be 15% of sales plus $180,000Â per quarter.
6.
Â
Interest expense is $100,000.
7.
Â
Income taxes are expected to be 30% of income before income taxes.
Your assistant has prepared two budgets: (1)…
Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.
1.
Â
Sales: quarter 1, 28,000 bags; quarter 2, 43,400 bags. Selling price is $63 per bag.
2.
Â
Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.
3.
Â
Desired inventory levels:
Â
Type of Inventory
Â
January 1
Â
April 1
Â
July 1
Snare (bags)
Â
8,400
Â
12,500
Â
18,400
Gumm (pounds)
Â
9,500
Â
10,300
Â
13,400
Tarr (pounds)
Â
14,500
Â
20,100
Â
25,100
Â
4.
Â
Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16Â per hour.
5.
Â
Selling and administrative expenses are expected to be 15% of sales plus $177,000Â per quarter.
6.
Â
Interest expense is $100,000.
7.
Â
Income taxes are expected to be 30% of income before income taxes.…
Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.
1.
Â
Sales: quarter 1, 28,600 bags; quarter 2, 43,400 bags. Selling price is $62 per bag.
2.
Â
Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.
3.
Â
Desired inventory levels:
Type of Inventory
Â
January 1
Â
April 1
Â
July 1
Snare (bags)
Â
8,400
Â
12,300
Â
18,300
Gumm (pounds)
Â
9,400
Â
10,500
Â
13,500
Tarr (pounds)
Â
14,300
Â
20,400
Â
25,100
4.Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16Â per hour.
5.Selling and administrative expenses are expected to be 15% of sales plus $178,000Â per quarter.
6.Interest expense is $100,000.
7.Income taxes are expected to be 30% of income before income taxes.
Your assistant has prepared two budgets: (1) the manufacturing overhead budget…
Chapter 9 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - (a) Accounting plays a relatively unimportant role...Ch. 9 - What criteria are helpful in determining the...Ch. 9 - Lori Wilkins maintains that the only difference...Ch. 9 - Prob. 7QCh. 9 - What is budgetary slack? What incentive do...Ch. 9 - Prob. 9QCh. 9 - What budget is the starting point in preparing the...
Ch. 9 - The production budget shows both unit production...Ch. 9 - Alou Company has 20,000 beginning finished goods...Ch. 9 - In preparing the direct materials budget for Quan...Ch. 9 - The production budget of Justus Company calls for...Ch. 9 - Ortiz Companys manufacturing overhead budget shows...Ch. 9 - Everly Companys variable selling and...Ch. 9 - For Goody Company, the budgeted cost for one unit...Ch. 9 - Indicate the supporting schedules used in...Ch. 9 - Identify the three sections of a cash budget. What...Ch. 9 - Noterman Company has credit sales of 600,000 in...Ch. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Maris Company uses the following budgets: balance...Ch. 9 - Paige Company estimates that unit sales will be...Ch. 9 - Sales budget data for Paige Company are given in...Ch. 9 - Perine Company has 2,000 pounds of raw materials...Ch. 9 - For Gundy Company, units to be produced are 5,000...Ch. 9 - For Roche Inc., variable manufacturing overhead...Ch. 9 - Elbert Company classifies its selling and...Ch. 9 - North Company has completed all of its operating...Ch. 9 - Kaspar Industries expects credit sales for...Ch. 9 - Moore Wholesalers is preparing its merchandise...Ch. 9 - Use this list of terms to complete the sentences...Ch. 9 - Pargo Company is preparing its master budget for...Ch. 9 - Pargo Company is preparing its budgeted income...Ch. 9 - Batista Company management wants to maintain a...Ch. 9 - Zeller Company estimates that 2017 sales will be...Ch. 9 - Trusler Company has always done some planning for...Ch. 9 - Edington Electronics Inc. produces and sells two...Ch. 9 - Thome and Crede, CPAs, are preparing their service...Ch. 9 - Turney Company produces and sells automobile...Ch. 9 - DeWitt Industries has adopted the following...Ch. 9 - On January 1, 2017, the Hardin Company budget...Ch. 9 - Rensing Ltd. estimates sales for the second...Ch. 9 - Fuqua Companys sales budget projects unit sales of...Ch. 9 - Rodriguez, Inc., is preparing its direct labor...Ch. 9 - Lowell Company makes and sells artistic frames for...Ch. 9 - Atlanta Company is preparing its manufacturing...Ch. 9 - Kirkland Company combines its operating expenses...Ch. 9 - Fultz Company has accumulated the following budget...Ch. 9 - Danner Company expects to have a cash balance of...Ch. 9 - Deitz Corporation is projecting a cash balance of...Ch. 9 - The controller of Trenshaw Company wants to...Ch. 9 - Nieto Companys budgeted sales and direct materials...Ch. 9 - Green Landscaping Inc. is preparing its budget for...Ch. 9 - Pletcher Denial Clinic is a medium-sized dental...Ch. 9 - In May 2017, the budget committee of Grand Stores...Ch. 9 - Emeric and Ellies Painting Service estimates that...Ch. 9 - PROBLEMS: SET A Cook Farm Supply Company...Ch. 9 - Deleon Inc. is preparing its annual budgets for...Ch. 9 - Hill Industries had sales in 2016 of 6,800,000 and...Ch. 9 - Colter Company prepares monthly cash budgets....Ch. 9 - The budget committee of Suppar Company collects...Ch. 9 - Prob. 9.6APCh. 9 - CURRENT DESIGNS Diane Buswell is preparing the...Ch. 9 - MANAGEMENT DECISION-MAKING Decision-Making Across...Ch. 9 - Elliot Hesse Inc. manufactures ergonomic devices...Ch. 9 - Real-World Focus Information regarding many...Ch. 9 - Prob. 9.4BYPCh. 9 - Broadening Your Ethics Case BYP9-5 You are an...Ch. 9 - All About You In order to get your personal...Ch. 9 - Prob. 9.7BYP
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