Exam 13: Budgeting and Standard Costs

Benjamin Corporation began its operations on September 1 of the current year.Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November.The company expects to sell 20% of its merchandise for cash.Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in September are:

Trapp Co.was organized on August 1 of the current year.Projected sales for the next three months are as follows: August \ 100,000 September 185,000 October 225,000 The company expects to sell 40% of its merchandise for cash. Of the sales on account, one third are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating cash collections of accounts receivable for August, September, and October.

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

Based on the following information, calculate the direct materials price variance. Actual costs 3,590 pounds at \ 8.00 Standard costs 4,100 pounds at \ 6.00

Microfix Company manufactures two models of Television, AR30 and AR33.Based on the following production data for April of the current year, prepare a production budget for April. AR30 AR33 Estimated inventory (units), April 1 2,500 3,700 Desired inventory (units), April 30 3,700 3,700 Expected sal es volume (units): Eastern zone 8,200 11,500 Midwest zone 13,000 17,500 Western zone 7,300 9,100

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

The budgeted volume of production is based on the sum of (1) the expected sales volume and (2) the desired ending inventory, less (3) the estimated beginning inventory.

Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended: Actual price per kilogram \ 2.50 Actual kilograms of material used 31,000 Actual hourly labor rate \ 18.10 Actual hours of production 4,900 labor hrs. Standard price per kilogram \ 2.80 Standard kilograms per completed unit 6 kilograms Standard hourly labor rate \ 18.00 Standard time per completed unit 1 hr. Actual total factory overhead \ 34,900 Actual fixed factory overhead \ 18,000 Standard fixed factory overhead rate \ 1.20 labor hour Standard variable factory overhead rate \ 3.80 labor hour Maximum plant capacity 15,000 hours Units completed during the period 5,000 ? The variable factory overhead controllable variance is:

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended: Actual price per gallon \ 11.75 Actual gallons of material used 5,000 Actual hourly labor rate \ 17.00 Actual hours of production 24,300 Standard price per gallon \ 12.00 Standard gallons per completed unit 1/2 Standard hourly labor rate \ 12.00 Standard time per completed unit 3 hrs. Units completed during the period 9,000 ? The direct labor time variance is:

If the price paid per unit differs from the standard price per unit for direct materials, the variance is termed:

Compute the standard cost for one hat, based on the following standards for each hat: Standard Material Quantity: 3/4 yard of fabric at \ 4.00 per yard Standard Labor: 1 hour at \ 5.75 per hour Factory Overhead: \ 2.90 per direct labor hour

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed:

The most effective means of presenting standard factory overhead cost variance data is through a selling overhead cost budget.

The first budget to be prepared is usually the sales budget.

Budgets are normally used by both profit-making businesses and nonprofit organizations.

Answer Corporation uses standard cost system.The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: $\text {Standard Costs}$ Direct materials 2,500 kilograms @\ 8 Direct labor 7,500 hours @\ 12 $\text { Actual Costs }$ Direct materials 2,600 kilograms @\ 8.75 Direct labor 7,400 hours @\ 11.40 ? Factory overhead (100% capacity - 10,000 hrs.): Variable cost @ $2 per hour Total variable cost, $18,000 Fixed cost @ $0.80 per hour Total fixed cost, $8,000 ? The amount of the direct labor time variance is:

Which of the following doesn't result in an unfavorable fixed overhead volume variance?

Cape Corporation sells a single product.Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units.The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 per unit @\ 0.60 per pound Material B 1.00 per unit @\ 1.70 per pound Material C 1.20 per unit @\ 1.00 per pound ? The amount of direct material A purchased during the year is:

Standard costs should be revised when they differ from actual costs.

The budgeted direct materials purchases are based on the sum of (1) the materials needed for production and (2) the desired ending materials inventory, less (3) the estimated beginning materials inventory.