Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses. Fixed Cost per Cost per Car Month Washed $1,500 $5,000 $ 8,400 $2,100 $1,500 $0.40 $0.08 Required: Prepare the company's flexible budget for August. $0.20 $0.30 $ 0.03 For example, electricity costs are $1,500 per month plus $0.08 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.60 per car washed.

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses. Fixed Cost per Cost per Car Month Washed $1,500 $5,000 $ 8,400 $2,100 $1,500 $0.40 $0.08 Required: Prepare the company's flexible budget for August. $0.20 $0.30 $ 0.03 For example, electricity costs are $1,500 per month plus $0.08 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.60 per car washed.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

xercise 8-4 (Algo) Direct Labor Budget [LO8-5] The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,200 6,500 7,100 8,000 Each unit requires 0.25 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. 2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each quarter. If the number of required direct labor-hours is less than this…
9 Problem 8-29 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 7,600 Accounts receivable $ 20,400 Inventory $ 40,200 Building and equipment, net $ 128,400 Accounts payable $ 23,925 Common stock $ 150,000 Retained earnings $ 22,675 The gross margin is 25% of sales. Actual and budgeted sales data: March (actual) $ 51,000 April $ 67,000 May $ 72,000 June $ 97,000 July $ 48,000 Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. One-half of a month’s inventory purchases is paid for in the month of purchase; the…
Problem 8-29 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10]The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 9,200Accounts receivable $ 26,800Inventory $ 49,800Building and equipment, net $ 104,400Accounts payable $ 29,925Common stock $ 150,000Retained earnings $ 10,275The gross margin is 25% of sales.Actual and budgeted sales data:March (actual) $ 67,000April $ 83,000May $ 88,000June $ 113,000July $ 64,000Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at…
Problem 8-29 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 7,600 Accounts receivable $ 20,400 Inventory $ 40,200 Building and equipment, net $ 128,400 Accounts payable $ 23,925 Common stock $ 150,000 Retained earnings $ 22,675 The gross margin is 25% of sales. Actual and budgeted sales data: March (actual) $ 51,000 April $ 67,000 May $ 72,000 June $ 97,000 July $ 48,000 Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. One-half of a month’s inventory purchases is paid for in the month of purchase; the…
8) Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances: Cash $ 41,000 Accounts receivable 200,800 Inventory 57,900 Buildings and equipment (net) 351,000 Accounts payable $ 85,425 Common stock 500,000 Retained earnings 65,275 $ 650,700 $ 650,700 Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $ 251,000 January $ 386,000 February $ 583,000 March $ 297,000 April $ 194,000 Sales are 20% for cash and 80% on credit. All payments on…
8 Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances: Cash $ 41,000 Accounts receivable 200,800 Inventory 57,900 Buildings and equipment (net) 351,000 Accounts payable $ 85,425 Common stock 500,000 Retained earnings 65,275 $ 650,700 $ 650,700 Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $ 251,000 January $ 386,000 February $ 583,000 March $ 297,000 April $ 194,000 Sales are 20% for cash and 80% on credit. All payments on…
8 Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances: Cash $ 41,000 Accounts receivable 200,800 Inventory 57,900 Buildings and equipment (net) 351,000 Accounts payable $ 85,425 Common stock 500,000 Retained earnings 65,275 $ 650,700 $ 650,700 Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $ 251,000 January $ 386,000 February $ 583,000 March $ 297,000 April $ 194,000 Sales are 20% for cash and 80% on credit. All payments on…
Exercise 9-1 (Static) Prepare a Flexible Budget [LO9-1] Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound DiversPlanning BudgetFor the Month Ended May 31 Budgeted diving-hours (q) 100 Revenue ($365.00q) $ 36,500 Expenses: Wages and salaries ($8,000 + $125.00q) 20,500 Supplies ($3.00q) 300 Equipment rental ($1,800 + $32.00q) 5,000 Insurance ($3,400) 3,400 Miscellaneous ($630 + $1.80q) 810 Total expense 30,010 Net operating income $ 6,490 During May, the company’s actual activity was 105 diving-hours. Required: Prepare a flexible budget for May.
Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances: Cash $ 41,000 Accounts receivable 200,800 Inventory 57,900 Buildings and equipment (net) 351,000 Accounts payable $ 85,425 Common stock 500,000 Retained earnings 65,275 $ 650,700 $ 650,700 Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $ 251,000 January $ 386,000 February $ 583,000 March $ 297,000 April $ 194,000 Sales are 20% for cash and 80% on credit. All payments on…
Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances: Debits Credits Cash $ 60,000 Accounts receivable 216,000 Inventory 60,750 Buildings and equipment (net) 370,000 Accounts payable $ 91,125 Common stock 500,000 Retained earnings 115,625 $ 706,750 $ 706,750 Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $ 270,000 January $ 405,000 February $ 602,000 March $ 317,000 April $ 213,000 Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The…
Q12 Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year: Budgeted Operating Results MT ET MT ET Price per pound $ 60 $ 90 $ 70 $ 85 Variable cost per pound 30 54 32 60 Sales (in pounds) 3,300 3,300 3,192 4,408 The total market was estimated to be 73,000 pounds at the time of budget. The actual total market for the year is 68,000 pounds. What is MT's contribution margin sales volume variance? Multiple Choice $3,240 unfavorable. $26,200 favorable. $3,480 unfavorable. $25,400 favorable. $26,440 favorable.
roblem 8-24 Cash Budget with Supporting Schedules [LO8-2, LO8-4, LO8-8] Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: Budgeted monthly absorption costing income statements for April–July are: April May June July Sales $ 510,000 $ 710,000 $ 410,000 $ 310,000 Cost of goods sold 357,000 497,000 287,000 217,000 Gross margin 153,000 213,000 123,000 93,000 Selling and administrative expenses: Selling expense 71,000 91,000 52,000 31,000 Administrative expense* 40,500 53,600 32,600 29,000 Total selling and administrative expenses 111,500 144,600 84,600 60,000 Net operating income $ 41,500 $ 68,400 $ 38,400 $ 33,000…