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ACC 206 Week 4 Assignment Chapter Six and Seven Problems
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ACC 206 Week 4 Assignment Chapter Six and Seven Problems
Please complete the following 8 exercises below in either Excel
or a word document (but must be single document). You must show
your work where appropriate (leaving the calculations within Excel
cells is acceptable). Save the document, and submit it in the
appropriate week using the Assignment Submission button.
Chapter 6 Exercise 2
2. Schedule of cash collectionsSugarland Company sells a single
product and anticipates opening a new facility in Charlotte on May
1 of the current year. Expected sales during the first three months
of activity are: May, $60,000; June, $80,000; and July, $85,000.
Thirty percent of all sales are for cash; the remaining 70% are on
account. Credit sales have the following collection pattern:
Chapter 6 Exercise 4
4. Production and cash-outlay computations
RPR, Inc., anticipates that 120,000 units of product K will be
sold during May. Each unit of product K requires four units of raw
material A. Actual inventories as of May 1 and budgeted inventories
as of May 31 follow.
Chapter 6 Exercise 5
5. Abbreviated cash budget; financing emphasis
An abbreviated cash budget for Big Chuck Enterprises
follows.
Chapter 6 Problem 3
3. Comprehensive budgeting
The balance sheet of Watson Company as of December 31, 20X1,
follows.
Chapter 7 Exercise 3
3. Variances for direct materials and direct labor
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Banner Company manufactures flags of various countries. Each
flag has a standard of eight square feet of fabric and three hours
of direct labor time. Information about recent production activity
follows.
Chapter 7 Exercise 5
5. Overhead variances
Nova Manufacturing applies factory overhead to products on the
basis of direct labor hours. At the beginning of the current year,
the companys accountant made the following estimates for the
forthcoming period:
Estimated variable overhead: $500,000
Estimated fixed overhead: $400,000
Estimated direct labor hours: 40,000
It is now 12 months later. Actual total overhead incurred in the
manufacture of 7,900 units amounted to $895,100. Actual labor hours
totaled 39,800. Assuming a direct labor standard of five hours per
finished unit, calculate the following:
a. Variable overhead efficiency variance
b. Fixed overhead volume variance
c. Overhead spending variance
Chapter 7 Problem 1
1. P26-A1 Basic flexible budgeting (L.O. 2)Centron, Inc., has
the following budgeted production costs:
Direct materials
$0.40 per unit
Direct labor
1.80 per unit
Variable factory overhead
2.20 per unit
Fixed factory overhead
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Supervision
$24,000
Maintenance
18,000
Other
12,000
The company normally manufactures between 20,000 and 25,000
units each quarter. Should output exceed 25,000 units, maintenance
and other fixed costs are expected to increase by $6,000 and
$4,500, respectively.
During the recent quarter ended March 31, Centron produced
25,500 units and incurred the following costs:
Direct Materials
$10,710
Direct Labor
47,175
Variable factory overhead
51,940
Fixed factory overhead
Supervision
24,500
Maintenance
23,700
Other
16,800
Total production costs
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$174,825
Instructions:
a. Prepare a flexible budget for 20,000, 22,500, and 25,000
units of activity.
b. Was Centrons experience in the quarter cited better or worse
than anticipated? Prepare an appropriate performance report and
explain your answer.
c. Explain the benefit of using flexible budgets (as opposed to
static budgets) in the measurement of performance.
Chapter 7 Problem 5
5. P26-B3 Straightforward variance analysis (L.O. 5)
Arrow Enterprises uses a standard costing system. The standard
cost sheet for product no. 549 follows.
