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Accounting Five Exercises

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Question;1. The sales department of C. Mack Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one fourth in the West region. The budgeted selling price is $25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following:a. A sales budget for June.b. A production budget for June.2. The sales department of C. Howland Manufacturing Company has forecast sales in March to be 20,000 units. Additional information follows:Finished goods inventory, March 1............................ 3,000 unitsFinished goods inventory required, March 31.................... 1,000 unitsMaterials used in production:Prepare the following:a. A production budget for March (in units).b. A direct materials budget for the month (in units anddollars).3. Prepare a cost of goods sold budget for the Highlands Manufacturing Company for the year ended December 31, 2011, from the following estimates.Inventories of production units:Direct materials purchased during the year, $854,000, beginning inventory of direct materials, $31,000, and ending inventory of direct materials, $26,000.Totals from other budgets included:Direct labor cost.................................................. $539,500Total factory overhead costs......................................... 818,0004. Gyro Company has the following totals from its operating budgets:Selling and administrative expenses budget........................ $ 244,500Cost of goods sold budget....................................... 727,300Sales budget................................................. 1,222,700Prepare a budgeted income statement for the year ended December 31, 2011, assuming that income from operations is taxed at a rate of 30%.5. Using the following per-unit and total amounts, prepare a flexible budget at the 14,000-, 15,000-, and 16,000-unit levels of production and sales for Celestial Products, Inc.:Selling price per unit............................................. $ 75.00Direct materials per unit........................................... $ 24.00Direct labor per unit............................................... $ 7.50Variable factory overhead per unit.................................. $ 15.00Fixed factory overhead.......................................... $ 75,000Variable selling and administrative expense per unit.................... $ 12.00Fixed selling and administrative expense............................ $ 80,0006. The normal capacity of a factory is 8,000 units per month. Cost and production data follow:Standard application rate for fixed overhead.................. $0.50 per unitStandard application rate for variable overhead................ $1.50 per unitProduction?Month 1...................................... 7,200 unitsProduction?Month 2....................................... 8,400 unitsActual factory overhead?Month 1.............................. $ 14,700Actual factory overhead?Month 2..............................$ 17,400Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.

 

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