Question

Part 1

Bainbridge, Inc. has projected sales and production in units for the second quarter of the coming year as follows:

	August	September	October
Production	95,000	85,000	70,000
Sales	85,000	75,000	95,000

Cash-related production costs are budgeted at $12 per unit produced. Of these production costs, 35% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $125,000 per month and increase 2% each month thereafter. The accounts payable balance on July 31 totals $388,000, which will be paid in August.

All units are sold on account for $20 each. Cash collections from sales are budgeted at 50% in the month of sale, 30% in the month following the month of sale, and the remaining 20% in the second month following the month of sale. Accounts receivable on August 1 totaled $575,000 of which $125,000 was from June's sales and the remainder from July). Show work for A & B below on excel schedule.

Required:

1. Prepare a schedule for each month showing budgeted cash disbursements for the Bainbridge, Inc. (5 points)
2. Prepare a schedule for each month showing budgeted cash receipts for Bainbridge, Inc. (5 Points)

Part 2

(Answer this question on the second worksheet in your Excel file.)

Barry Company's standard and actual costs per unit for the most recent period are given below. 15,000 units were actually produced.

	Standard	Actual
Materials:
Standard: 3 feet at $1.75 per foot	$5.25
Actual: 3.2 feet at $1.90 per foot		$6.08
Direct Labor:
Standard: 2 hours at $7.00 per hour	$14.00
Actual: 1.9 hours at $8.00 per hour		$15.20
Variable Overhead:
Standard: 2 hours at $4.00 per hour	$8.00
Actual: 2.2 hours at $3.85 per hour		$8.47

Required:

From the foregoing information, compute the following variances and indicate whether the variances are favorable or unfavorable: Show work on excel schedule

1. Materials price variance. (2 points)
2. Materials quantity variance. (2 points)
3. Direct labor rate variance. (2 points)
4. Direct labor efficiency variance. (2 points)

Part 3

1. What manager is generally in the best position to influence the direct-labor efficiency variance? (2 points) .   Answer on tab 3 of excel schedule.

Answer 1