Part 2 Computer Accessories assembles a computer

Required: Prepare and answer the following.                                                                                                            

1. A sales budget for each quarter and the year.                                                                                                        

2. A production budget for finished goods of units each quarter and the year.                                                                                                              

3. A purchases budget for raw material of kits each quarter and the year.                                                                                                                     

4. A manufacturing cost budget for each quarter and the year.                                                                                                           

5. A selling and administrative expense budget for each quarter and the year.                                                                                                             

6. A cash budget for each quarter and the year.                                                                                                         

7. A pro-forma contribution income statement for each quarter and the year.                                                                                                             

Hint: You will need to compute Variable Cost of Goods Sold for each quarter, which is unit sold times total Variable Standard cost per unit.                                                                                                         

8. Using your information from #7, compute the Breakeven in dollars for the year.

Hint: Compute the annual contribution margin ratio.                                                                                                              

9. What if the company is able to lower the fixed Manufacturing overhead costs that uses cash per quarter from $50,000 to $45,000. Which budgets will change and what will be the new annual income?                                                                                                               

You should only have to change the fixed manufacturing overhead costs that uses cash on this worksheet and all the appropriate budgets will change on the solution worksheet if you have                                                                                                                        

set up your cell references correctly. Please make sure you return the Fixed manufacturing overhead costs that uses cash back to the original number before you submit your solution.                                                                                                                       

Production Budget

Flashkick Company Manufactures and sells soccer balls for teams of children in elementary and high school. Flashkick's 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:

___________Practice Balls_______________________Match Balls

_________Units_________selling price________units________selling price

January ___50,000_________$8.75__________7000___________$16.00

February___58000_________$8.75__________8000___________$16.00

March _____70000_________$8.75_________12000___________$16.00

April______100000_________$8.75_________18000___________$16.00

Flashkick requires ending inventory of product to equal 20 percent of the next month's unit sales. Beginning inventory in January was 3,300 practice soccer balls and 400 match soccer balls.

Required

Construct a production budget for each of the two product lines for Flashkick Company for the first three months of the coming year.

Production budget for practice balls

Flashkick Company

Production Budget - Practice balls

For the first quarter of next year

_________________January______________February__________________March

unit sales____________?__________________?_______________________?

desired ending inventory__?_______________?________________________?

total needed__________?_________________?________________________?

Less: Beginning inventory____?____________?________________________?

unit produced______________?___________?_________________________?

Production budget for match balls:

Flashkick Company

Production Budget - Match Balls

_______________January___________February_______________March

unit sales________?__________________?_____________________?

desired ending inventory___?___________?_____________________?

Total needed_____?__________________?_____________________?

Less: Beginninng inventory____?________?_____________________?

Units produced________?_____________?______________________?

Overhead Variances, Four-Variance Analysis, Journal Entries

Laughlin, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical capacity for a year is defined as 1,000,000 units requiring 200,000 standard direct labor hours. Budgeted overhead for the year is $750,000, of which $300,000 is fixed overhead. During the year, 900,000 units were produced using 190,000 direct labor hours. Actual annual overhead costs totaled $800,000, of which $294,700 is fixed overhead.

Required:

1. Calculate the fixed overhead spending and volume variances.

2. Calculate the variable overhead spending and efficiency variances.

3. Prepare the journal entries that reflect the following:

1. Assignment of overhead to production
2. Recognition of the incurrence of actual overhead
3. Recognition of overhead variances
4. Closing out overhead variances, assuming they are not material

Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank or enter "0".

8a)

b)

c)

d)Which of the following would be included in this year’s GDP?

e)What is the difference between national income and domestic income?

Exercise 7-2 Production Budget [LO7-3]

Ajax Corporation issued 1,500 bonds each with face value of $1,000 on January 1, 2025. The bonds have semi-annual interest payments at 4% per annum due on December 31^st and June 30^th. The bonds mature on December 31, 2029 and were issued to yield 5% per annum. What amount would Ajax record for interest expense when making the first interest payment on June 30, 2025?

Question 7 options:

Part I. Master Budgets

Farmer Manufacturing, Inc. prepares their budgets on a quarterly basis. Below is information which will be used to prepare their first quarter budget.

Forecasted sales in units for each product are as follows:

The average selling price is $36 per unit.

Below is additional information which will be needed to prepare the master budget:

Company policy requires that each month’s ending inventory (finished goods) be equal to 40% of the next month’s estimated sales. Ending inventory on December 31 was 8,800 units. Sales for April are projected to be 39,000 units, and sales for May are projected to be 42,000 units.

Information on material and labor requirements include:

Company policy requires that the ending inventory for raw material be equal to 30% of the following month’s estimated material requirements. Ending inventory on December 31 for Ingredient Q was 20,800 pounds.

Manufacturing overhead includes both variable and fixed components. Overhead is allocated based on direct labor hours. Variable overhead is budgeted at $3.25 per direct labor hour required. Fixed overhead is budgeted at $34,500 per month.

Selling expenses include sales commissions and sales salaries. Commissions are paid at 4% of sales. Monthly sales salaries are $4,200. General and administrative expenses are $6,400 per month.

Part I Requirements:

1. Prepare a monthly Sales Budget for the first quarter.
2. Prepare a monthly Production Budget for the first quarter.
3. Prepare a monthly Direct Material Purchases Budget for the first quarter.
4. Prepare a monthly Direct Labor Budget for the first quarter.
5. Prepare a monthly Overhead Budget for the first quarter.
6. Prepare a monthly Selling, General, & Administrative Expense Budget for the first quarter.

Many observers considered the race riots of the 1960s a negative social phenomenon. However, in a 1967 speech, Martin Luther King Jr. reflected that: Urban riots must now be recognized as durable social phenomena. They may be deplored, but they are there and should be understood. Urban riots are a special form of violence. They are not insurrections. The rioters are not seeking to seize territory or to attain control of institutions. They are mainly intended to shock the white community. They are a distorted form of social protest. The looting which is their principal feature serves many functions. It enables the most enraged and deprived Negro to take hold of consumer goods with the ease the white man does by using his purse. Often the Negro does not even want what he takes; he wants the experience of taking. But most of all, alienated from society and knowing that this society cherishes property above people, he is shocking it by abusing property rights. There are thus elements of emotional catharsis in the violent act. Briefly explain how sociologists define social problems. Then, using MLK’s analysis of race riots as an example, discuss the importance of approaching social problems objectively.

Problem 9-4

Karam Inc. has compiled the following data in order to put together their first quarter operating budget for 2011:

Each unit requires three hours of direct labor.

Additional information:
Karam sells each unit for $95.
Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory.
Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April is 95,500.
It takes three pounds of material to produce each unit and the cost is $2.75/pound.

Required:

A. Prepare a sales budget for the January, February and March and for the first quarter in total.

B. Prepare a production budget for January, February and March and for the first quarter in total.

C. Prepare a direct materials purchases budget for January, February and March and for the first quarter in total.

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.

Reconcile the variable and absorption costing net operating income (loss) figures.  (Losses and deductions should be entered as a negative.)

During the second quarter of operations, the company again produced 33,400 units but sold 38,400 units. (Assume no change in total fixed costs.) What is the company’s variable costing net operating income (loss) for the second quarter?