Green Landscaping Inc. is preparing its budget for the first
quarter of 2017. The next step in the budgeting process is to
prepare a cash receipts schedule and a cash payments schedule. To
that end the following information has been collected.
Clients usually pay 60% of their fee in the month that service is
performed, 30% the month after, and 10% the second month after
receiving service.
Actual service revenue for 2016 and expected service revenues for
2017 are November 2016, $94,290; December 2016, $83,720; January
2017, $104,810; February 2017, $122,860; March 2017,
$133,740.
Purchases of landscaping supplies (direct materials) are paid 60%
in the month of purchase and 40% the following month. Actual
purchases for 2016 and expected purchases for 2017 are December
2016, $16,190; January 2017, $13,080; February 2017, $17,510; March
2017, $21,410.
(a)
Prepare the following schedules for each month in the first quarter
of 2017 and for the quarter in total:
(1) Expected collections from clients.
| GREEN
LANDSCAPING INC. Schedule of Expected Collections From Clients For the Quarter Ending March 31, 2017March 31, 2017For the Year Ending March 31, 2017 |
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|
January |
February |
March |
Quarter |
|||||
|
November |
$ | $ | $ | $ | ||||
|
December |
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|
January |
||||||||
|
February |
||||||||
|
March |
||||||||
|
Total collections |
$ | $ | $ | $ | ||||
(2) Expected payments for landscaping
supplies.
| GREEN
LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies For the Year Ending March 31, 2017For the Quarter Ending March 31, 2017March 31, 2017 |
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|
January |
February |
March |
Quarter |
|||||
|
December |
$ | $ | $ | $ | ||||
|
January |
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|
February |
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|
March |
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|
Total payments |
$ | $ | $ | $ | ||||
(b)
Determine the following balances at March 31, 2017:
| (1) | Accounts receivable | $ | ||
| (2) | Accounts payable | $ |
In: Accounting
Tempo Company's fixed budget (based on sales of 12,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (12,000 units × $215 per unit) | $ | 2,580,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 288,000 | ||||||
| Direct labor | 504,000 | |||||||
| Production supplies | 324,000 | |||||||
| Plant manager salary | 88,000 | 1,204,000 | ||||||
| Gross profit | 1,376,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 96,000 | |||||||
| Packaging | 180,000 | |||||||
| Advertising | 100,000 | 376,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 138,000 | |||||||
| Depreciation—office equip. | 108,000 | |||||||
| Insurance | 78,000 | |||||||
| Office rent | 88,000 | 412,000 | ||||||
| Income from operations | $ | 588,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 10,000 units.
(4) Compute the income from operations for sales
volume of 14,000 units.
In: Accounting
Tempo Company's fixed budget (based on sales of 14,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (14,000 units × $219 per unit) | $ | 3,066,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 350,000 | ||||||
| Direct labor | 588,000 | |||||||
| Production supplies | 392,000 | |||||||
| Plant manager salary | 150,000 | 1,480,000 | ||||||
| Gross profit | 1,586,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 98,000 | |||||||
| Packaging | 224,000 | |||||||
| Advertising | 100,000 | 422,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 200,000 | |||||||
| Depreciation—office equip. | 170,000 | |||||||
| Insurance | 140,000 | |||||||
| Office rent | 150,000 | 660,000 | ||||||
| Income from operations | $ | 504,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 12,000 units.
(4) Compute the income from operations for sales
volume of 16,000 units.
In: Accounting
Tempo Company's fixed budget (based on sales of 10,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (10,000 units × $214 per unit) | $ | 2,140,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 240,000 | ||||||
| Direct labor | 430,000 | |||||||
| Production supplies | 270,000 | |||||||
| Plant manager salary | 40,000 | 980,000 | ||||||
| Gross profit | 1,160,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 70,000 | |||||||
| Packaging | 150,000 | |||||||
| Advertising | 100,000 | 320,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 90,000 | |||||||
| Depreciation—office equip. | 60,000 | |||||||
| Insurance | 30,000 | |||||||
| Office rent | 40,000 | 220,000 | ||||||
| Income from operations | $ | 620,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 8,000 units.
(4) Compute the income from operations for sales
volume of 12,000 units.
In: Accounting
Tempo Company's fixed budget (based on sales of 10,000 units)
for the first quarter of calendar year 2017 reveals the
following.
| Fixed Budget | ||||||||
| Sales (10,000 units) | $ | 2,190,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 240,000 | ||||||
| Direct labor | 430,000 | |||||||
| Production supplies | 270,000 | |||||||
| Plant manager salary | 40,000 | 980,000 | ||||||
| Gross profit | 1,210,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 90,000 | |||||||
| Packaging | 140,000 | |||||||
| Advertising | 100,000 | 330,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 90,000 | |||||||
| Depreciation—office equip. | 60,000 | |||||||
| Insurance | 30,000 | |||||||
| Office rent | 40,000 | 220,000 | ||||||
| Income from operations | $ | 660,000 | ||||||
Complete the following flexible budgets for sales volumes of 8,000,
10,000, and 12,000 units. (Round cost per unit to 2 decimal
places.)
In: Accounting
Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter reveals the following. Fixed Budget Sales (10,000 units × $205 per unit) $ 2,050,000 Cost of goods sold Direct materials $ 240,000 Direct labor 440,000 Production supplies 270,000 Plant manager salary 40,000 990,000 Gross profit 1,060,000 Selling expenses Sales commissions 80,000 Packaging 150,000 Advertising 100,000 330,000 Administrative expenses Administrative salaries 90,000 Depreciation—office equip. 60,000 Insurance 30,000 Office rent 40,000 220,000 Income from operations $ 510,000
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 8,000 units.
(4) Compute the income from operations for sales volume of 12,000 units.
In: Accounting
During the first calendar quarter of 2019, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 6,000 units in the urban region at a unit price of $53 and 5,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 4,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses:
|
Variable |
Fixed |
||||
|---|---|---|---|---|---|
|
(per unit) |
(total) |
||||
| Manufacturing costs: | |||||
| Direct materials | |||||
| A (4 lb. @ $3.15/lb.) | $12.60 | - | |||
| B (2 lb. @ $4.65/lb.) | 9.30 | - | |||
| Direct labor (0.5 hours per unit) | 7.50 | - | |||
| Manufacturing overhead: | |||||
| Depreciation | - | $7,650 | |||
| Factory supplies | 0.90 | 4,500 | |||
| Supervisory salaries | - | 28,800 | |||
| Other | 0.75 | 22,950 | |||
| Operating expenses: | |||||
| Selling: | |||||
| Advertising | - | 22,500 | |||
| Sales salaries& commissions* | 1.50 | 15,000 | |||
| Other* | 0.90 | 3,000 | |||
| Administrative: | |||||
| Office salaries | - | 2,700 | |||
| Supplies | 0.15 | 1,050 | |||
| Other | 0.08 | 1,950 |
*Varies per unit sold, not per unit produced.
a. Assuming that the desired ending inventories of materials A and B are 4,000 and 6,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors:
Do not use negative signs with any of your answers below.
1. Total sales
$Answer
2. Production
Answer units
3. Material purchase cost
| Material A | Material B | ||||
|---|---|---|---|---|---|
| Total pounds (lbs.) required for production | Answer | Answer | |||
| Desired ending materials inventory | Answer | Answer | |||
| Total pounds to be available | Answer | Answer | |||
| Beginning materials inventory | Answer | Answer | |||
| Total material to be purchased (lbs.) | Answer | Answer | |||
| Total material purchases ($) | Answer | Answer |
4. Direct labor costs
$Answer
5. Manufacturing overhead costs
| Fixed | Variable | Total | |||
|---|---|---|---|---|---|
| Depreciation | Answer | Answer | Answer | ||
| Factory supplies | Answer | Answer | Answer | ||
| Supervisory salaries | Answer | Answer | Answer | ||
| Other | Answer | Answer | Answer | ||
| Total manufacturing overhead | Answer |
6. Selling and administrative expenses
| Fixed | Variable | Total | |||
|---|---|---|---|---|---|
| Selling expenses: | |||||
| Advertising | Answer | Answer | Answer | ||
| Sales salaries and commissions | Answer | Answer | Answer | ||
| Other | Answer | Answer | Answer | ||
| Total selling expenses | Answer | ||||
| Administrative expenses: | |||||
| Office salaries | Answer | Answer | Answer | ||
| Supplies | Answer | Answer | Answer | ||
| Other | Answer | Answer | Answer | ||
| Total administrative expenses | Answer | ||||
| Total selling and administrative expenses | Answer |
b. Using data generated in requirement (a), prepare a budgeted
income statement for the calendar quarter. Assume an overall
effective income tax rate of 30%.
Round answers to the nearest whole number.
Do not use negative signs with your answers.
| Clinton Corporation Budgeted Income Statement For the Quarter Ended March 31, 2019 |
|||||
|---|---|---|---|---|---|
| Sales | Answer | ||||
| Cost of Goods Sold: | |||||
| Beginning Inventory - Finished Goods | Answer | ||||
| Material: | |||||
| Beginning Inventory - Material | Answer | ||||
| Material Purchases | Answer | ||||
| Material Available | Answer | ||||
| Ending Inventory - Material | Answer | ||||
| Direct Material | Answer | ||||
| Direct Labor | Answer | ||||
| Manufacturing Overhead | Answer | ||||
| Total Manufacturing Cost | Answer | ||||
| Cost of Goods Available for Sale | Answer | ||||
| Ending Inventory - Finished Goods | Answer | ||||
| Cost of Goods Sold | Answer | ||||
| Gross Profit | Answer | ||||
| Operating Expenses: | |||||
| Selling Expenses | Answer | ||||
| Administrative Expenses | Answer | ||||
| Total Operating Expenses | Answer | ||||
| Income before Income Taxes | Answer | ||||
| Income Tax Expense | Answer | ||||
| Net Income | Answer | ||||
In: Accounting
Heely Co. has the following projected sales in units for the first quarter of 20x2:
|
January |
10373 |
|
|
February |
17195 |
|
|
March |
12071 |
Heely Co.’s budget is based on the following assumptions: 36% of
all purchases of merchandise are paid in the month purchased and
the remainder in the following month. The number of units in each
month’s ending inventory is equal to 60% of the next month’s units
of sales.
The cost of each unit of inventory is $15.
What is the company’s accounts payable balance at the end of February?
Select one:
a. $76251
b. $165072
c. $174852
d. $135558
In: Accounting
Tempo Company's fixed budget (based on sales of 12,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (12,000 units × $209 per unit) | $ | 2,508,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 288,000 | ||||||
| Direct labor | 528,000 | |||||||
| Production supplies | 324,000 | |||||||
| Plant manager salary | 88,000 | 1,228,000 | ||||||
| Gross profit | 1,280,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 96,000 | |||||||
| Packaging | 168,000 | |||||||
| Advertising | 100,000 | 364,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 138,000 | |||||||
| Depreciation—office equip. | 108,000 | |||||||
| Insurance | 78,000 | |||||||
| Office rent | 88,000 | 412,000 | ||||||
| Income from operations | $ | 504,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 10,000 units.
(4) Compute the income from operations for sales
volume of 14,000 units.
In: Accounting
Tempo Company's fixed budget (based on sales of 16,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (16,000 units × $202 per unit) | $ | 3,232,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 400,000 | ||||||
| Direct labor | 688,000 | |||||||
| Production supplies | 448,000 | |||||||
| Plant manager salary | 200,000 | 1,736,000 | ||||||
| Gross profit | 1,496,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 128,000 | |||||||
| Packaging | 224,000 | |||||||
| Advertising | 100,000 | 452,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 250,000 | |||||||
| Depreciation—office equip. | 220,000 | |||||||
| Insurance | 190,000 | |||||||
| Office rent | 200,000 | 860,000 | ||||||
| Income from operations | $ | 184,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 14,000 units.
(4) Compute the income from operations for sales
volume of 18,000 units.
In: Accounting