Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airpoThe company's planning budget for July appears below:Flight CaféPlanning BudgetFor the Month Ended July 31Budgeted meals (q).18,000Revenue ($4.50g) ...$81,000Expenses:Raw materials ($2.40q).Wages and salaries ($5,200 + $0.30q)Utilities ($2,400+ $0.05g)Facility rent ($4,300)Insurance ($2,300) ...Miscellaneous ($680 + $0.10q)43,20010,6003,3004,3002,300...2,480Total expense66,180Net operating income$14,820n July, 17,800 meals were actually served. The company's flexible budget for this level of activiappears below:Flight CaféFlexible BudgetFor the Month Ended July 31Budgeted meals (q) .17,800Revenue ($4.50q) .$80,100Expenses:Raw materials ($2.40q)...Wages and salaries ($5,200 + $0.30q)Utilities ($2,400 + $0.05g).Facility rent ($4,300)Insurance ($2,300) ...Miscellaneous ($680 + $0.10q)42,72010,5403,2904,3002,3002,460Total expense65,610Net operating income$14,490 EXERCISE 9-9 Planning Budget LO9-1Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facilitynear Montreal. The following table provides estimates concerning the company's costs:Fixed CostCost perper Month Car Washed$0.80$0.15$0.20$0.30Cleaning supplies ...Electricity$1,200MaintenanceWages and salariesDepreciationRentAdministrative expenses.$5,000$6,000$8,000$4,000$0.10For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The companyexpects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.Required:Using Exhibit 9-2 as your guide, prepare the company's planning budget for August.

A planning budget refers to the statement prepared by the management based on the estimations to…

EXERCISE 9-9 Planning Budget LO9-1 Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Fixed Cost Cost per per Month Car Washed $0.80 $0.15 $0.20 $0.30 Cleaning supplies ... Electricity .. $1,200 Maintenance $5,000 $6,000 $8,000 $4,000 Wages and salaries Depreciation Rent Administrative expenses. $0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. Required: Using Exhibit 9-2 as your guide, prepare the company's planning budget for August.

EXERCISE 9-9 Planning Budget LO9-1 Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Fixed Cost Cost per per Month Car Washed $0.80 $0.15 $0.20 $0.30 Cleaning supplies ... Electricity .. $1,200 Maintenance $5,000 $6,000 $8,000 $4,000 Wages and salaries Depreciation Rent Administrative expenses. $0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. Required: Using Exhibit 9-2 as your guide, prepare the company's planning budget for August.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 15E: Cost of goods sold budget Delaware Chemical Company uses oil to produce two types of plastic...

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Budget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions For which costs might the director be expected to request supplemental reports?
Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January I, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.: Cash 85,000 Accounts Receivable........................................ 125,600 Finished Goods............................................ 69,300 Work in Process............................................ 32,500 Materials.................................................. 48,900 Prepaid Expenses.......................................... 2,600 Plant and Equipment....................................... 325,000 Accumulated DepreciationPlant and Equipment........... 156,200 Accounts Payable.......................................... 62,000 Common Stock. 10 par.................................... 180,000 Retained Earnings.......................................... 290,700 688,900 688,900 Factory output and sales for 20Y9 are expected to total 200,000 units of product, which are to be sold at 5.00 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year. Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows: Estimated Costs and Expenses Fixed Variable (Total for Year) (Per Unit Sold) Cost of goods manufactured and sold: Direct materials.................................. 1.10 Direct labor...................................... 0.65 Factory overhead: Depreciation of plant and equipment........... 40,000 Other factory overhead........................ 12,000 0.40 Selling expenses: Sales salaries and commissions.................... 46,000 0.45 Advertising...................................... 64,000 Miscellaneous selling expense................... 6,000 0 25 Administrative expenses: Office and officers salaries........................ 72,400 0.12 Supplies......................................... 5,000 0.10 Miscellaneous administrative expense............. 4,000 0.05 Balances of accounts receivable, prepaid expenses, anti accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of 30,000 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of 0.15 per share are expected to be declared and paid in March, June. September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for 75,000 cash in May. Instructions 1. Prepare a budgeted income statement for 20Y9. 2. Prepare a budgeted balance sheet as of December 31, 20Y9, with supporting calculations.
Budget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions Prepare a budget performance report for the director of the Crane Division for the month of August.
Budgeted income statement and supporting budgets The budget director of Birds of a Feather Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for January: a. Estimated sales for January: Birdhouse 6.000 units at 55 per unit Bird feeder 4,500 units at 75 per unit b. Estimated inventories at January 1: Direct materials: Finished products: Wood 220 ft. Birdhouse 300 units at 23 per unit Plastic 250 lb. Bird feeder 240 units at 34 per unit c. Desired inventories at January 31: Direct materials: Finished products: Wood 180 ft. Birdhouse 340 units at 23 per unit Plastic 210 lb. Bird feeder 200 units at 34 per unit d. Direct materials used in production: In manufacture of Birdhouse: In manufacture of Bird Feeder: Wood ... 0.80 ft. per unit of product Wood 1.20 ft. per unitof product Plastic . . 0.50 lb. per unit of product Plastic 0.75 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood 8.00 per ft. Plastic 1.20 per lb. f. f. Direct labor requirements: Birdhouse: Fabrication Department 0.20 hr. at15 per hr. Assembly Department 0.30 hr. at 12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at15 per hr. Assembly Department 0.35 hr. at 12 per hr. g. Estimated factory overhead costs for January: Indirect factory wages 80,000 Power and light 8,000 Depreciation of plant and equipment 25,000 Insurance and property tax 2,000 h. Estimated operating expenses for January: Sales salaries expense 90,000 Advertising expense 20,000 Office salaries expense 18,000 Depredation expenseoffice equipment 800 Telephone expenseselling 500 Telephone expenseadministrative 200 Travel expenseselling 5,000 Office supplies expense 250 Miscellaneous administrative expense 450 i. Estimated other income and expense for January: Interest revenue 300 Interest expense 224 j. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for January. 2. Prepare a production budget for January. 3. Prepare a direct materials purchases budget for January. 4. Prepare a direct labor cost budget for January. 5. Prepare a factory overhead cost budget for January. 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be 29,000, and work in process at the end of January is estimated to be 35,400. 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January.
Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income .statement for March: a. Estimated sales for March: Batting helmet 1,200 units at 40 per unit Football helmet 6,500 units at 160 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Plastic 90 lb. Batting helmet 40 units at 25 per unit Foam lining 80 lb. Football helmet 240 units at 77 per unit c. Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lb. Batting helmet 50 units at 25 per unit Foam lining 65 lb. Football helmet 220 its at 78 per unit d. Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic 6.00 per lb. Foam lining 4.00 per lb. f. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at 20 per hr. Assembly Department 0.50 hr. at 14 per hr. Football helmet: Molding Department 0.50 hr. at 20 per hr. Assembly Department l.80 hrs.at 14perhr. g. Estimated factory overhead costs for March: Indirect factory wages 86,000 Power and light 4,000 Depreciation of plant and equipment 12,000 Insurance and property tax 2300 h. Estimated operating for March: Sales salaries expense 184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expenseoffice equipment 3,800 Telephone expenseselling 5,800 Telephone expenseadministrative 1,200 Travel expenseselling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 i. Estimated other income and expense for March: Interest Revenue 940 Interest Expense 872 j. Estimated tax rate: 30% Instructions 1.Prepare a sales budget for March. 2.Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March. 4. Prepare a direct labor cost budget for March. 5. Prepare a factory overhead cost budget for March. 6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be 15,300, and work in process at the end of March is desired to be 14,800. 7.Prepare a selling and administrative expenses budget for March. 8.Prepare a budgeted income statement for March. 9.Prepare a factory overhead cost budget for March. 10.Prepare a cost of goods .sold budget for March. Work in process at the beginning of March is estimated to the 115,300, and work in process at the end of March is desired to be 14,800. 11.Prepare a selling and administrative expenses budget for March. 12.Prepare a budgeted income statement for March.