Question

Part 1A

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:

Sales at $630,000, all for cash.

Merchandise inventory on November 30 was $290,000.

The cash balance at December 1 was $36,000.

Selling and administrative expenses are budgeted at $114,000 for December and are paid in cash.

Budgeted depreciation for December is $61,000.

The planned merchandise inventory on December 31 is $320,000.

The cost of goods sold is 70% of the sales price.

All purchases are paid for in cash.

There is no interest expense or income tax expense.

The budgeted cash receipts for December are:

Multiple Choice

$691,000

$630,000

$495,000

$135,000

Part 1B:

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:

Overhead costs:

Equipment depreciation	$	35,000
Supervisory expense	$	12,000

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Machining	Order Filling		Other
Equipment depreciation	0.40	0.30		0.30
Supervisory expense	0.40	0.20		0.40

In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.

Activity:

	MHs (Machining)	Orders (Order Filling)
Product W1	5,660	109
Product M0	22,100	932
Total	27,760	1,041

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

Sales and Direct Cost Data:

	Product W1		Product M0
Sales (total)	$	64,150	$	60,700
Direct materials (total)	$	33,400	$	22,600
Direct labor (total)	$	17,200	$	32,600

What is the product margin for Product W1 under activity-based costing?

Multiple Choice

$9,131

$8,351

$12,911

$1,089

Part 1C

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,390 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Data used in budgeting:

	Fixed element per month			Variable element per client-visit
Revenue		-		$	35.60
Personnel expenses	$	29,700		$	10.60
Medical supplies		1,300			6.00
Occupancy expenses		7,800			2.10
Administrative expenses		6,100			0.20
Total expenses	$	44,900		$	18.90

Actual results for November:

Revenue	$	120,854
Personnel expenses	$	65,608
Medical supplies	$	22,436
Occupancy expenses	$	14,437
Administrative expenses	$	6,563

The spending variance for medical supplies in November would be closest to:

Multiple Choice

$796 F

$736 U

$736 F

$796 U

Part 1 D

Krepps Corporation produces a single product. Last year, Krepps manufactured 33,100 units and sold 27,800 units. Production costs for the year were as follows:

Direct materials	$	248,250
Direct labor	$	145,640
Variable manufacturing overhead	$	274,730
Fixed manufacturing overhead	$	595,800

Sales totaled $1,320,500 for the year, variable selling and administrative expenses totaled $164,020, and fixed selling and administrative expenses totaled $205,220. There was no beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit was:

Multiple Choice

$21.40 per unit

$27.30 per unit

$16.90 per unit

$22.50 per unit

Part 1 E

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available:

	Monthly Fixed Cost		Variable Cost Per Deb Sold
Sales commissions			$	0.90
Shipping			$	1.40
Advertising	$	50,000	$	0.20
Executive salaries	$	60,000
Depreciation on office equipment	$	20,000
Other	$	40,000

All of these expenses (except depreciation) are paid in cash in the month they are incurred.

If the company has budgeted to sell 16,000 Debs in January, then the total budgeted variable selling and administrative expenses for January will be:

Multiple Choice

$36,800

$25,600

$40,000

$17,600

Answer 1

Please find below answer of your question. If this helped, please hit LIKE button. If need any explanation, put it in comment.

Part 1A
Since all sales are in cash, budgeted cash receipt in December will be $630000.
Part 1B
	Machining	Order Filling	Other
Equipment Dep	14000	10500	10500
Supervisory	4800	2400	4800
Total	18800	12900	15300
W1 18800*5660/27760	3833	1351	12900*109/1041
M0 18800*22100/27760	14967	11549	12900*932/1041

Part 1D	Part 1D
	Total Amount	Sale/Production	Per unit
Sale	1320500	27800	47.5	Sale based
Direct Material	248250	33100	7.5	Production Based
Direct Laor	145640	33100	4.4	Production Based
Variable Manu ovh	274730	33100	8.3	Production Based
Variable Selling	164020	27800	5.9	Sale based
Total Variable Cost			26.1
Margin per unit	47.5-26.1		21.4

Part 1E
Variable Selling ovh per unit	0.9+1.4+0.2	2.5
Budget to sell	16000
total budgeted variable selling and administrative expenses for January will be	16000*2.5	40000

Part 1C
Actual Expenses	Given in Question	22436
Budgeted for actual (Actual Activity*Variable cost)+Fixed Cost	(3390*6)+1300	21640
		796 U