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ACCT-The following information pertains to the operating budget for Opa Locka Stuff Corporation.




Question;Assignment;4;Chapter;10;1. The following information pertains to the operating budget for Opa;Locka Stuff Corporation.;?;Sales;for August were $170,000;?;Sales;for September were $190,000;?;Budgeted;sales for October is $180,000 and for November is $220,000.;?;Cash;sales are 10% of total sales;?;Collections;for sales on account are 50% in the month of sale, 40% the next month, 8% in;the third month.;?;Gross;margin is 40% of sales.;?;Purchases are paid 30% in the;month of purchase and 70% in the next month.;Merchandise is bought and sold in the same month. There is no;beginning or ending inventory.;?;Operating;general & administrative costs are $60,000 each month, $5,000 of which is;depreciation expense.;?;A;quarterly insurance payment is due on October 5th in the amount of;$15,000.;?;Opa;Locka policy is to end each month with $20,000 cash on hand.;?;Beginning;cash balance on October 1 is $20,000.;?;The;outstanding loan balance on October 1 is $30,000.;What are...;Collections from sales for October;November ??;Disbursements for purchases October;November ??;Cash balance at the end of October;November ??;Loan balance at the end of October;November ??;Operating income for October;November ??;Cash flow for October;November ??;Uncollected balance from sales;November;Unpaid balance from purchases;November;2. Miami Gardens Manufacturing Corp. makes;a specialty product and has developed the following standard costing information;Direct;materials 2 lbs $ 8.50 per;lb.;Direct;labor 1.5;hrs $11.00 per hour;Variable;support rate $28.50;per direct labor hour;Actual;production for September used the following resources;Units;manufactured 3,000;Direct;materials used in production 6,125;lbs $ 51,756.25;Direct;labor 4,435;hrs $ 49,893.75;Actual;variable support $128,526.30;Calculate;the following variances;a) Direct material price variance;b) Direct material quantity variance;c) Total direct material variance;d) Direct labor rate variance;e) Direct labor efficiency variance;f) Total direct labor variance;g) Variable support rate variance;h) Variable support efficiency variance;i) Total variable support variance;3. Cutler Ridge Company prepared the;following performance report for September. Cutler Ridge;would like you to prepare the;flexible budget and help them understand the results of operations.;Actual Master;Results Budget;Sales volume (in units) 30,000 28,000;Manufacturing costs;Direct materials $285,000 $252,000;Direct labor $96,000 $91,000;Fixed manufacturing suppot 310,000 300,000;Total $ 691,000 $ 643,000;Required;Prepare;the flexible budget for Cutler Ridge based on;the information provided above.;Calculate the flexible budget variances and the planning variances for;each cost item as well as the total variance.;Indicate whether the variances are favorable or unfavorable.;Which;variances require the attention of management?;Explain.;Chapter 11;5. Sedano?s Supermarket has prepared the following segmented income;statement for three of its departments in it?s flagship store in late;2006. Agustin Herr?n is contemplating;dropping the magazines and selling the pharmacy business to Navarro Discount;Pharmacies. He sees that those two;departments are losing money and the bread department is only marginally;profitable and may be able to do better if he could expand the space. Corporate costs are allocated equally among;all departments.;Bread Magazines Pharmacy Total;Sales $350,000 $120,000 $350,000 $820,000;Variable expenses 220,000 95,000 290,000 605,000;Contribution margin 130,000 25,000 60,000 215,000;Other costs 60,000 10,000 65,000 135,000;Segment margin 70,000 15,000 (5,000) 80,000;Allocated avoidable costs 18,000 10,000 20,000 48,000;Segment income 52,000 5,000 (25,000) 32,000;Allocated corporate costs 50,000 50,000 50,000 150,000;Corporate profit $ 2,000 $(45,000) ($75,000) ($118,000);a) Prepare a more useful and understandable segmented income;statement for Sr. Herr?n.;b) What financial and non-financial information should be considered;in making these decisions?;c) Should Sr. Herr?n drop the magazine department? Why or why not?;d) Should Sr. Herr?n sell the pharmacy? Why or why not?;6. Homestead;Farming Company?s last year sales were $6,200,000, operating income was;$320,000, and the investment was $1,600,000.;The cost of capital is 12%.;a) Calculate the;company?s ROI efficiency.;b) Calculate the;company?s ROI productivity.;c) Calculate the;company?s ROI.;Homestead;Farming has the opportunity to buy adjoining land for $1,000,000 that will;increase sales by $4,000,000 and net income by $130,000. Homestead Farming is a division of Dole Fresh;Foods and Homestead?s;management is evaluated on ROI.;Would;management make the investment? Explain.;Suppose;management is evaluated on residual income.;Would management make the investment?;Explain.;Which;decision benefits Dole Fresh Foods?;Explain.


Paper#38020 | Written in 18-Jul-2015

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