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Costs & Budgets (202500-META-CPTG12114-EN)
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The following information pertains to Woodburn Company:
Month
|
Sales
|
Purchases
|
January
|
$60,000
|
$32,000
|
February
|
$80,000
|
$40,000
|
March
|
$100,000
|
$56,000
|
∙ Cash is collected from customers in the following pattern: Month of sale 30%
Month following the sale 70%
∙ 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
∙ Labor costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these payments are made in the month incurred.
∙ The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
QUESTION33. How much cash will be disbursed in total in March?
Vélos Recyclables is marketing a new electric bike made entirely from recycled materials. Convinced of the success of his model, the manager hopes to sell 200 of them at a price of €1,200 by Christmas. By the end of December, he had sold 220 bikes but was forced to offer average discounts of 20% to customers in the face of competition from Decathlon, which launched its recyclable bike at the same time.
QUESTION17. What are the price and volume variances for December sales?
Kyogle Secretarial Services Inc., employs 20 full‐time secretaries. The budgeted annual compensation per employee is $40,500. The average chargeable time is 500 hours per client annually. All secretarial labor costs are included in a single direct‐cost category and are allocated to jobs on a per‐hour basis.
Other costs are included in a single indirect‐cost pool, allocated according to secretarial labor‐hours. Budgeted indirect costs for the year are $787,500, and the firm expects to have 90 clients during the coming year.
QUESTION29. Kyogle’s budgeted indirect‐cost rate per hour is:
QUESTION19. Which of the following is a financial budget?
The actual information pertains to the third quarter. As part of its budgeting process, Bishan Indian Restaurant (BIR) had developed the following static budget for the third quarter on the expectation that it would serve 10,000 meals. BIR is in the process of preparing the flexible budget and understanding the results.
|
Actual Results
|
|
Flexible Budget
|
|
Static Budget
|
Sales volume (in
units)
|
11,000
|
|
|
|
10,000
|
Sales revenues
|
$238,000
|
|
$
|
|
$230,000
|
Variable costs
|
$150,000
|
|
$
|
|
$180,000
|
Contribution margin
|
$88,000
|
|
$
|
|
$50,000
|
Fixed costs
|
$36,000
|
|
$
|
|
$35,000
|
Operating profit
|
$ 52,000
|
|
$
|
|
$ 15,000
|
QUESTION2. The amount for fixed costs in the flexible budget will be:
For 2023, Tomtom Manufacturing uses machine‐hours as the only overhead cost‐allocation base. The estimated manufacturing overhead costs are $300,000 and estimated machine hours are 50,000. The actual manufacturing overhead costs are $420,000 and actual machine hours are 60,000
QUESTION35. Using job costing, the 2023 budgeted manufacturing overhead rate is
Kyogle Secretarial Services Inc., employs 20 full‐time secretaries. The budgeted annual compensation per employee is $40,500. The average chargeable time is 500 hours per client annually. All secretarial labor costs are included in a single direct‐cost category and are allocated to jobs on a per‐hour basis.
Other costs are included in a single indirect‐cost pool, allocated according to secretarial labor‐hours. Budgeted indirect costs for the year are $787,500, and the firm expects to have 90 clients during the coming year.
QUESTION28. Kyogle’s budgeted direct labor cost rate per hour is:
QUESTION18. A master budget is:
QUESTION21. Which of the following statements is true of budgets?
QUESTION5. An unfavorable sales‐volume variance could result from....... ?