INTRO TO MANAGERIAL ACCT-CONNECT ACCESS
8th Edition
ISBN: 9781260118742
Author: BREWER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 1E
Prepare a Flexible Budget
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:
During May, the company’s actual activity was 105 diving-hours.
Required:
Using Exhibit 9−5 as your guide, prepare a flexible budget for May.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Preparing a flexible budget and performance report
This continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:
During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets;
Requirements
Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.
Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.
What insights can the management of Piedmont Computer Company draw from the performance report?
Budgeted Income Statement
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Required:
Using Schedule 9 as your guide, prepare the company’s budgeted income statement for the year.
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost
drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The
company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 80
passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
Cost per Cruise
$ 477.00
Cost per Passenger
Fixed Cost per Month
$ 6,000
$ 2,500
$ 5,300
$ 3,300
$ 3.00
Vessel operating costs
Advertising
Administrative costs
$
31.00
$ 1.50
Insurance
For example, vessel operating costs should be $6,000 per month plus $477.00 per cruise plus $3.00 per passenger. The
company's sales should average $31.00 per passenger. In July, the company provided 52 cruises for a total of 3,200 passengers.
Required:
Prepare the company's flexible budget for July.
Alyeski Tours
Flexible…
Chapter 9 Solutions
INTRO TO MANAGERIAL ACCT-CONNECT ACCESS
Ch. 9.A - Fixed Overhead Variances Primara Corporation has a...Ch. 9.A - Predetermined Overhead Rate: Overhead Variances...Ch. 9.A - Applying Overhead in a Standard Costing System...Ch. 9.A - Prob. 4ECh. 9.A - Using Fixed Overhead Variances The standard cost...Ch. 9.A - Prob. 6ECh. 9.A - Relations Among Fixed Overhead Variances Selected...Ch. 9.A - Applying Overhead; Overhead Variances Lane Company...Ch. 9.A - Applying Overhead; Overhead Variances Chilczuk....Ch. 9.A - Comprehensive Standard Cost Variances "Wonderful!...
Ch. 9.A - Comprehensive Standard Cost Variances Flandro...Ch. 9.A - Selection of a Denominator: Overhead Analysis:...Ch. 9.B - Standard Cost Flows: Income Statement Preparation...Ch. 9.B - Standard Cost Flows: Income Statement Preparation...Ch. 9.B - Standard Cost Flows Bowen Company manufactures one...Ch. 9.B - Standard Cost Flows Hartwell Company manufactures...Ch. 9.B - Transaction Analysis; Income Statement Preparation...Ch. 9.B - Transaction Analysis; Income Statement Preparation...Ch. 9 - What is a static planning budget?Ch. 9 - What is a flexible budget and how does it differ...Ch. 9 - What are some of the possible reasons that actual...Ch. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is a revenue variance and what does it mean?Ch. 9 - What is a spending variance and what does it mean?Ch. 9 - What does a flexible budget enable that a simple...Ch. 9 - How does a flexibe budget based on the cost...Ch. 9 - Prob. 9QCh. 9 - Why are separate price and quantity variances...Ch. 9 - Who is generally responsible for the materials...Ch. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Our workers are all under labor contracts:...Ch. 9 - Prob. 15QCh. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Prob. 2AECh. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 2F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 4F15Ch. 9 - Prob. 5F15Ch. 9 - Prob. 6F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 8F15Ch. 9 - Prob. 9F15Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 13F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prepare a Flexible Budget Puget Sound Divers is a...Ch. 9 - Prepare a Report Shong Revenue and Spending...Ch. 9 - Prepare a Flexible Budget with More Than One Cost...Ch. 9 - Direct Materials Variances Bandar Industries...Ch. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Planning Budget Lavage Rapide is a Canadian...Ch. 9 - EXERCISE 98 Flexible Budget L091 Refer to the data...Ch. 9 - Prepare a Report Showing Revenue and Spending...Ch. 9 - Direct Labor and Variable Manufacturing Overhead...Ch. 9 - Prob. 11ECh. 9 - Working with More Than One Cost Driver The...Ch. 9 - Direct Materials and Direct Labor Variances Huron...Ch. 9 - Direct Materials Variances Refer to the data in...Ch. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Comprehensive Variance Analysis Miller Toy Company...Ch. 9 - More than One Cost Driver Milano Pizza is a small...Ch. 9 - Basic Variance Analysis: the Impact of Vanances on...Ch. 9 - Multiple Products. Materials, and Processes...Ch. 9 - Variance Analysis In a Hospital John Fleming,...Ch. 9 - Flexible Budgets and Spending Variances You have...Ch. 9 - Comprehensive Variance Analysis Marvel Parts....Ch. 9 - Direct Materials and Direct Labor Variances:...Ch. 9 - Comprehensive Variance Analysis Highland Company...
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
- es Puget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May appears below: Budgeted diving-hours (q) Revenue ($470.00q) Puget Sound Divers Planning Budget For the Month Ended May 31 Expenses: Wages and salaries ($11,400 + $126.00g) Supplies ($3.00q) Equipment rental ($2,100 + $23.00q) Insurance ($4,000) Miscellaneous ($530+ $1.42q) Total expenses Net operating income Revenue Expenses During May, the company's actual activity was 390 diving-hours. Required: Prepare a flexible budget for May. Note: Round your answers to the nearest whole number. Puget Sound Divers Flexible Budget For the Month Ended May 31 Wages and salaries Supplies Equipment rental Insurance Miscellaneous 400 $ 188,000 61,800 1,200 11,300 4,000 1,098 79,398 TEFAL $ 108,602arrow_forwardPuget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) Revenue ($400.00g) Expenses: Wages and salaries ($11,100+ $124.00g) Supplies ($4.00g) Equipment rental ($2,300+ $24.00g) Insurance ($3,800) Miscellaneous ($500+ $1.48q) Total expenses Net operating income During May, the company's actual activity was 240 diving-hours. Required: Prepare a flexible budget for May. Note: Round your answers to the nearest whole number. 250 $ 100,000 42,100 1,000 8,300 3,800 870 56,070 $ 43,930arrow_forwardPreparing a flexible budget performance report Cell One Technologies manufactures capacitors for cellular base stations and other communications applications. The company’s July 2018 flexible budget shows output levels of 6,000, 7,500, and 9,500 units. The static budget was based on expected sales of 7,500 units. The company sold 9,500 units during July, and its actual operating income was as follows: Requirements Prepare a flexible budget performance report for July. What was the effect on Cell One’s operating income of selling 2,000 units more than the static budget level of sales? What is Cell One’s static budget variance for operating income? Explain why the flexible budget performance report provides more useful information to Cell One’s managers than the simple static budget variance. What insights can Cell One’s managers draw from this performance report?arrow_forward
- Preparing an operating budget—sales budget Yarbrough Company manufactures T-shirts printed with tourist destination logos. The following table shows sales prices and projected sales volume for the summer months: Prepare a sales budget for Yarbrough Company for the three months.arrow_forwardPuget 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 Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (g) Revenue ($390.00g) Expenses: Wages and salaries ($11,100+ $126.00g) Supplies ($4.00g) Equipment rental ($2,100 + $25.00g) Insurance ($3,900) Miscellaneous ($510+ $1.50g) Total expense Net operating income. 400 $ 156,000 61,500 1,600 12,100 3,900 1,110 80,210 $ 75,790 During May, the company's actual activity was 390 diving-hours.arrow_forwardPuget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May appears below: Budgeted diving-hours (q) Revenue ($390.00q) Puget Sound Divers Planning Budget For the Month Ended May 31 Expenses: Wages and salaries ($12,000+ $130.00g) Revenue Expenses: Supplies ($4.00q) Equipment rental ($2,200 + $25.00g) Insurance ($4,000) Miscellaneous ($520+ $1.48q) Total expenses Net operating income During May, the company's actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. Note: Round your answers to the nearest whole number. Miscellaneous Total expenses Puget Sound Divers Flexible Budget For the Month Ended May 31 Wages and salaries Supplies Equipment rental Insurance 350 $ 136,500 57,500 1,400 10,950 4,000 1,038 74,888 $ 61,612arrow_forward
- 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 Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 300 Revenue ($450.00g) $135,000 Expenses: Wages and salaries ($11,200 + $124.00g) Supplies ($4.00g) Equipment rental ($2,200 + $22.00g) Insurance ($4,000) Miscellaneous ($510 + $1.44g) 48,400 1,200 8,800 4,000 942 Total expense 63,342 $ 71,658 Net operating income During May, the company's actual activity was 290 diving-hours.arrow_forwardPreparing a flexible budget performance report Cell Plus Technologies manufactures capacitors for cellular base stations and other communication applications. The company’s July 2018 flexible budget shows output levels of 8,500, 10,000, and 12,000 units. The static budget was based on expected sales of 10,000 units. The company sold 12,000 units during July, and its actual operating income was as follows: Requirements Prepare a flexible budget performance report for July 2018. What was the effect on Cell Plus’s operating income of selling 2,000 units more than the static budget level of sales? What is Cell Plus’s static budget variance for operating income? Explain why the flexible budget performance report provides more useful information to Cell Plus’s managers than the simple static budget variance. What insights can Cell Plus’s managers draw from this performance report.arrow_forwardFlexible Budget for Selling and Administrative Expenses for a Service Company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Total sales Variable cost: Total variable cost Fixed cost: Total fixed cost Total selling and administrative expenses 14% of sales 18% of sales $5,500 per month plus 12% of sales $28,000 per month $12,000 per month plus 20% of sales $30,000 per month $400,000 $500,000 $600,000 $ $ $ $arrow_forward
- es 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 Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) Revenue ($400.00g) Expenses: Wages and salaries ($11,100+ $124.00q) Supplies ($4.00q) Equipment rental ($2,400 + $23.00q) Insurance ($4,000) Miscellaneous ($520+ $1.50q) Total expense Net operating income During May, the company's actual activity was 340 diving-hours. Puget Sound Divers Flexible Budget For the Month Ended May 31 Revenue Expenses: 350 $ 140,000 Required: Prepare a flexible budget for May. (Round your answers to the nearest whole dollar.) Wages and salaries 54,500 1,400 10,450 4,000 1,045 Supplies Equipment rental Insurance Miscellaneous 71,395 $ 68,605 Help Save & Exit Submit Check my workarrow_forwardPuget 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 Divers Planning Budget Budgeted diving-hours (q) Revenue ($450.00q) Expenses: Wages and salaries ($11,600 + $124.009) Supplies ($3.009) For the Month Ended May 31 350 $ 157,500 55,000 1,050 10,150 4,000 1,065 71,265 $ 86,235 Equipment rental ($2,100 + $23.00q) Insurance ($4,000) Miscellaneous ($540 + $1.50q) Total expense Net operating income During May, the company's actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. (Round your answers to the nearest whole number.) Puget Sound Divers Flexible Budget For the Month Ended May 31 Revenue Expenses: Wages and salaries Supplies Equipment rental Insurance Miscellaneous Total expense Net operating income 0 0arrow_forwardPuget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May appears below: Budgeted diving-hours (9) Revenue ($460.009) Puget Sound Divers Planning Budget For the Month Ended May 31 Revenue Expenses: Expenses: Wages and salaries ($11,100+ $124.009) Supplies ($4.009) Equipment rental ($2,000+ $21.009) Insurance ($4,100) Miscellaneous ($540+ $1.469) Total expenses Net operating income During May, the company's actual activity was 340 diving-hours. Required: Prepare a flexible budget for May. Note: Round your answers to the nearest whole number. Puget Sound Divers Flexible Budget For the Month Ended May 31 Wages and salaries Supplies Equipment rental Insurance Miscellaneous 350 $ 161,000 54,500 1,400 9,350 4,100 1,051 70,401 $ 90,599arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
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