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Acc/561 Wk5 Wileyplus E20-2, E20-5, Be21-4, E22-5

Resource: WileyPLUS Exercise E20-2 Exercise E20-5 Brief Exercise BE21-4 Exercise E22-5 Question 1 Zeller Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for $12 and $25, respectively. Because of the intense competition Zeller faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2010 are as follows. Unit Sales ProductQuarter 1Quarter 2 XQ- 10320,00025,000 XQ-10412,00015,000 No changes in selling prices are anticipated. Complete the sales budget for the 2 quarters ending June 30, 2010.

List the products and show for each quarter and for the 6 months, units, selling price, and total sales by product and in total. ZELLER ELECTRONICS INC. Sales Budget For the Six Months Ending June 30, 2010 Quarter 1 ProductUnitsSelling PriceTotal Sales XQ-10320,000$12$240,000 XQ-10412,00025300,000 Totals32,000 $540,000 Quarter 2 XQ-10325,000$12$300,000 XQ-10415,00025375,000 Totals40,000 $675,000 Six Months XQ-10345,000$12$540,000 XQ-10427,00025675,000 Totals72,000 $1,215,000 Question 2 Moreno Industries has adopted the following production budget for the first 4 months of 2011. MonthUnitsMonthUnits January10,000 March5,000

February8,000 April4,000 Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2010, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month’s production requirements. Complete the direct materials purchases budget by month for the first quarter. MORENO INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2011 JanuaryFebruaryMarch Units to be produced10,0008,0005,000 Direct materials per unit? 3? 3? 3 Total pounds needed for production30,00024,00015,000

Add: Desired ending direct materials7,2004,5003,600 Total materials required37,20028,50018,600 Less: Beginning direct materials9,0007,2004,500 Direct materials purchases28,20021,30014,100 Cost per pound? $ 2? $ 2? $ 2 Total cost of direct materials purchases$ 56,400$ 42,600$ 28,200 Desired ending direct materials = 30% of next month’s production needs. Question 3 Hannon Company expects to produce 1,200,000 units of Product XX in 2010. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $8.

Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Complete the flexible manufacturing budget for the relevant range value using 20,000 unit increments. HANNON COMPANY Monthly Flexible Manufacturing Budget For the Year 2010 Activity level80,000100,000120,000 Finished goods Variable costs Direct materials$320,000$400,000$480,000 Direct labor480,000600,000720,000 Overhead640,000800,000960,000 Total variable costs$1,440,000$1,800,000$2,160,000 Fixed costs Depreciation200,000200,000200,000 Supervision100,000100,000100,000 Total fixed costs300,000300,000300,000

Total costs$1,740,000$2,100,000$2,460,000 Depreciation: $2 ? 1,200,000 ? 12 Supervision: $1 ? 1,200,000 ? 12 Question 4 Compute the total materials variance and the price and quantity variances. Total materials variance$3,400Favorable Materials price variance$8,400Favorable Materials quantity variance$5,000Unfavorable Total materials variance: (AQ ? AP)-(SQ ? SP) (28,000 ? $4. 70)-(27,000* ? $5. 00) $131,600-$135,000=$3,400 F *9,000 ? 3 Materials price variance: (AQ ? AP)-(AQ ? SP) (28,000 ? $4. 70)-(28,000 ? $5. 00) $131,600-$140,000=$8,400 F Materials quantity variance: (AQ ? SP)-(SQ ? SP) (28,000 ? $5. 0)-(27,000 ? $5. 00) $140,000-$135,000=$5,000 U Repeat the question above, assuming the purchase price is $5. 20 and the quantity purchased and used is 26,200 units. Total materials variance$1,240Unfavorable Materials price variance$5,240Unfavorable Materials quantity variance$4,000Favorable Total materials variance: (AQ ? AP)-(SQ ? SP) (26,200 ? $5. 20)-(27,000 ? $5. 00) $136,240-$135,000=$1,240 U Materials price variance: (AQ ? AP)-(AQ ? SP) (26,200 ? $5. 20)-(26,200 ? $5. 00) $136,240-$131,000=$5,240 U Materials quantity variance: (AQ ? SP)-(SQ ? SP) (26,200 ? $5. 00)-(27,000 ? $5. 00) $131,000-$135,000=$4,000 F

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