Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 6, Problem 6.25E
Revenues, production, and purchases budgets. The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inventory is 11,000 units. The company’s budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle.
Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. Yucatan’s needs for extra wheels for replacement parts are ordered by a separate division of the company. The company’s target ending inventory is 14,000 wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel.
- 1. Compute the budgeted revenues in pesos.
Required
- 2. Compute the number of bicycles that Yucatan should produce.
- 3. Compute the budgeted purchases of wheels in units and in pesos.
- 4. What actions can Yucatan’s managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A truck was acquired on July 1, 2008, at a cost of $216,000. The truck had a six-year useful life andan estimated salvage value of $24,000. The straight-line method of depreciation was used. On January1, 2011, the truck was repaired at a cost of $20,000, which extended the useful life of the truck for anadditional two years beyond that originally estimated (salvage value is still estimated at $24,000). Incomputing depreciation for annual adjustment purposes, the expense is calculated for each month theasset is owned.Required:Prepare the appropriate entries for January 1, 2011, and December 31, 2011.
Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax
Rate, and a 5 percent decrease in Sales.
Colossal Chemical Corporation
Year Ended December 31, 2021
($000,000 omitted)
Base
Case
2% Increase in Gross Margin
2% Decrease in Tax Rate
5% Decrease in Sales
Sales
$2,110 $
$
+A
Cost of goods sold
1,456
Selling, general, and
administrative
274
expense
Depreciation
160
Research and
46
development
Total costs and
$1,936 $
1A
expenses
Operating Income
174
Interest expense
39
Earnings before
$135 $
$
Income Taxes
Provision for Income
Taxes
Net Income
24
$ 111 $
6A
6A
+A
6A
Solve
Chapter 6 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q
Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What does anti-dilutive mean? How might a security be anti-dilutive with respect to its potential impact on EPS?arrow_forward[The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 50,000 machine-hours would be required for the period’s estimated level of production. It also estimated $910,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.80 per machine-hour. Because Delph has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Molding Fabrication Total Machine-hours 20,000 30,000 50,000 Fixed manufacturing overhead cost $ 700,000 $ 210,000 $ 910,000 Variable manufacturing overhead cost per machine-hour $ 3.00 $ 1.00 During the year, the…arrow_forwardsolve the attached questionsarrow_forward
- Respond the attached questionsarrow_forwardGiven the data, fill in the empty boxes.arrow_forwardJH and Joe corporations are members of a consolidated group. JH owns 10 shares of the marketable stock having $10,000 basis in total. In 2024, JH sells all the shares to Joe for $40,000. In 2025, Joe sells 5 shares of the stock to Ethan corporation, an unrelated entity outside the consolidated group, for $30,000. In 2026, Joe sells the other 5 shares of the stock to Young corporation, an unrelated entity outside the consolidated group, for $50,000. Explain and/or illustrate the timing of and extent to which JH’s intercompany item is taken into account for consolidated taxable income purposes.arrow_forward
- Scenario Bradburn Corporation was formed five years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The corporation has been successful, but it currently is experiencing a shortage of funds. On June 10, 2026, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30, 2026, and September 30, 2026. Another note of $6,000 is due on March 31, 2027, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn’s cash flow problems are due primarily to the company’s desire to finance a $300,000 plant expansion over the next two fiscal years through internally generated funds. Review the attached income statement and balance sheet for the company and repond to the following questions: Calculations Calculate the current ratio for fiscal years 2025 and 2026. Calculate the…arrow_forwardSplish Company reported the following amounts in the stockholders' equity section of its December 31, 2024, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800 shares issued) $180,000 Common stock, $5 par (94,000 shares authorized, 18,800 shares issued) Additional paid-in capital Retained earnings Total 94,000 131,000 478,000 $883,000 During 2025, Splish took part in the following transactions concerning stockholders' equity. 1. 2. Paid the annual 2024 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2024. Purchased 1,500 shares of its own outstanding common stock for $43 per share. Splish uses the cost method. 3. Reissued 800 treasury shares for land valued at $36,200. 4. Issued 540 shares of preferred stock at $104 per share. 5. 6. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $41 per share. Issued the stock dividend. 7.…arrow_forwardThe following data were taken from the balance sheet accounts of Marigold Corporation on December 31, 2024. $575,000 Current assets Debt investments (trading) 567,000 Common stock (par value $10) 535,000 Paid-in capital in excess of par 139,000 Retained earnings 802,000 Prepare the required journal entries for the following unrelated items. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.) a. A 5% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $39. b. The par value of the common stock is reduced to $2 with a 5-for-1 stock split. C. A dividend is declared January 5, 2025, and paid January 25, 2025, in bonds held as an investment. The bonds have a book value of $101,000 and a fair value…arrow_forward
- what type of hardware would a cpa use or requirearrow_forwardThe original sale of the $50 par value common shares of Swifty Company was recorded as follows: Cash Common Stock Paid-in Capital in Excess of Par Transactions: 278,400 240,000 38,400 (a) Bought 390 shares of common stock as treasury shares at $63. (b) Sold 140 shares of treasury stock at $60. (c) Sold 70 treasury shares at $68. Record the treasury stock transactions (given above) under the cost method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)arrow_forwardThe original sale of the $50 par value common shares of Splish Company was recorded as follows: Cash Common Stock Paid-in Capital in Excess of Par 256,500 225,000 31,500 Transactions: (a) Bought 380 shares of common stock as treasury shares at $61. (b) Sold 100 shares of treasury stock at $59. (c) Sold 50 treasury shares at $67. Record the treasury stock transactions (given above) under the cost method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY