Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for Julyappears below:Flight CaféPlanning BudgetFor the Month Ended July 31Budgeted meals (q)22,000$94,600Revenue ($4.30q)Expenses:Raw materials ($2.00q)Wages and salaries ($6,000 + $0.20g)Utilities ($2,000 + $0.05q)Facility rent ($3,500)Insurance ($2,200)Miscellaneous ($400 + $0.10q)Total expense44,00010,4003,1003,5002, 2002,60065,800$28,800Net operating incomeIn July, 23,000 meals were actually served. The company's flexible budget for this level of activity appears below:Flight CaféFlexible Budget< Prev2 of 10Next >8:414/4/2e to searchte +19144hoInsert In July, 23,000 meals were actually served. The company's flexible budget for this level of activity appears below.Flight CaféFlexible BudgetFor the Month Ended July 3123,000Budgeted meals (q)$98,900Revenue ($4.30q)Expenses:Raw materials ($2.00q)Wages and salaries ($6,000+ $0.20q)Utilities ($2,000 + $0.05g)Facility rent ($3,500)Insurance ($2,200)Miscellaneous ($400 + $0.10q)Total expense46, е0010,6ее3,1503,5002,2002,70068,150ncesNet operating incomeA $30,750Required:1. Calculate the company's activity variances for July. (Indicate the effect of each variance by selecting "F" for favorableunfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)Flight CaféActivity Variancesrawll< Prev2 of 10Next >here to searchop281A3&7.48EYDJ.MII.FL

Activity variance is defined as the difference among the revenue items in the flexible budget as…

Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) 22,000 $94,600 Revenue ($4.30q) Expenses: Raw materials ($2.00q) Wages and salaries ($6,000 + $0.20g) Utilities ($2,000 + $0.05q) Facility rent ($3,500) Insurance ($2,200) Miscellaneous ($400 + $0.10q) Total expense 44, e00 10,400 3,100 3,500 2,200 2,600 65,800 $28,800 Net operating income

Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) 22,000 $94,600 Revenue ($4.30q) Expenses: Raw materials ($2.00q) Wages and salaries ($6,000 + $0.20g) Utilities ($2,000 + $0.05q) Facility rent ($3,500) Insurance ($2,200) Miscellaneous ($400 + $0.10q) Total expense 44, e00 10,400 3,100 3,500 2,200 2,600 65,800 $28,800 Net operating income

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter23: Flexible Budgeting (flexbud)

Section: Chapter Questions

Problem 4R

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Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
The sales department of F. Pollard Manufacturing Co. has forecast sales in March to be 20,000 units. Additional information follows: Materials used in production: Prepare the following: a. A production budget for March (in units). b. A direct materials budget for the month (in units and dollars).
Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
Mesa Aquatics, Inc. estimated direct labor hours as 1,900 in quarter 1, 2,000 in quarter 2.2,200 in quarter 3, and 1,800 in quarter 4. a sales and administration budget using the information provided.
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700 in April. and 2,900 in May. The required ending inventory is 20% of the next months sales, and the beginning inventory on January 1 was 600 units. Prepare a production budget for the first four months of the year.
All Temps has a policy of always paying within the discount period, and each of its suppliers provides a discount of 2% if paid within 10 days of purchase. Because of the purchase policy, 80% of its payments are made in the month of purchase and 20% are made the following month. The direct materials budget provides for purchases of $23,812 in February, $23,127 in March, $21,836 in April, and $28,173 in May.What is the balance in accounts payable for April 30, and May 31?
Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Company policy requires that ending inventories for each month be 25 percent of next months sales. At the beginning of July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.
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Pasadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs 18 per hour, determine the direct labor cost budget for January.