Question;ACC 206 Week 4 Assignment;Please complete the following exercises below in;either Excel or a word document (but must be single document). You must show;your work where appropriate (leaving the calculations within Excel cells is;acceptable). Save the document, and submit it in the appropriate week using the;Assignment Submission button.;1.;Comprehensive budgeting;The balance sheet of Watson Company as of December 31, 20X1, follows.;WATSON COMPANY;Balance Sheet;December 31;12X1;Assets;Cash;$4,595;Accounts receivable;10,000;Finished goods (575 units x $7.00);4,025;Direct materials (2,760 units x $0.50);1,380;Plant & equipment;$50,000;Less: Accumulated depreciation;10,000;40,000;Total assets;$60,000;Liabilities & Stockholders' Equity;Accounts payable to suppliers;$14,000;Common stock;$25,000;Retained earnings;21,000;46,000;Total liabilities &. stockholders;equity;$60,000;The;following information has been extracted from the firm's accounting records;1. All sales are made on;account at $20 per unit. Sixty percent of the sales are collected in the month;of sale, the remaining 40% are collected in the following month. Forecasted;sales for the first five months of 20X2 are: January, 1,500 units,- February;1,600 units, March, 1,800 units, April, 2,000 units, May, 2,100 units.;2. Management wants to maintain;the finished goods inventory at 30% of the following month's sales.;3. Watson uses four units of;direct material in each finished unit. The direct material price has been;stable and is expected to remain so over the next six months. Management wants;to maintain the ending direct materials inventory at 60% of the following;month's production needs.;4. Seventy percent of all;purchases are paid in the month of purchase, the remaining 30% are paid in the;subsequent month.;5. Watson's product requires 30;minutes of direct labor time. Each hour of direct labor costs $7.;Instructions;a. Rounding computations to the;nearest dollar, prepare the following for January through March;1) Sales budget;2) Schedule of cash collections;3) Production budget;4) Direct material purchases budget;5) Schedule of cash disbursements for material;purchases;6) Direct labor budget;b. Determine the balances in;the following accounts as of March 31;1) Accounts Receivable;2) Direct Materials;3);Accounts Payable;2. Basic flexible budgeting Centron, Inc., has the following budgeted production costs;Direct materials;$0.40 per unit;Direct labor;1.80 per unit;Variable factory overhead;2.20 per unit;Fixed factory overhead;Supervision;$24,000;Maintenance;18,000;Other;12,000;The;company normally manufactures between 20,000 and 25,000 units each quarter.;Should output exceed 25,000 units, maintenance and other fixed costs are;expected to increase by $6,000 and $4,500, respectively.;During;the recent quarter ended March 31, Centron produced 25,500 units and incurred;the following costs;Direct Materials;$10,710;Direct Labor;47,175;Variable factory overhead;51,940;Fixed factory overhead;Supervision;24,500;Maintenance;23,700;Other;16,800;Total production costs;$174,825;Instructions;a. Prepare;a flexible budget for 20,000, 22,500, and 25,000 units of activity.;b. Was;Centron's experience in the quarter cited better or worse than anticipated?;Prepare an appropriate performance report and explain your answer.;c. Explain;the benefit of using flexible budgets (as opposed to static budgets) in the;measurement of performance.;3. Straightforward variance;analysis;Arrow Enterprises uses a standard costing;system. The standard cost sheet for product no. 549 follows.;Direct materials: 4;units @ $6.50;$26.00;Direct labor: 8 hours;$8.50;68;Variable factory;overhead: 8 hours;@ $7.00;56;Fixed factory overhead;8 hours;@ 2.5;20;Total standard cost per;unit;$170.00;The following information pertains to activity for December;1. Direct;materials acquired during the month amounted to 26,350 units at $6.40 per unit.;All materials were consumed in operations.;2. Arrow;incurred an average wage rate of $8.75 for 51,400 hours of activity.;3. Total;overhead incurred amounted to $508,400. Budgeted fixed overhead totals $1.8;million and is spread evenly throughout the year.;4. Actual;production amounted to 6,500 completed units.;Instructions;a. Compute;Arrow's direct material variances.;b. Compute;Arrow's direct labor variances.;c. Compute;Arrow's variances for factory overhead.
Paper#40886 | Written in 18-Jul-2015Price : $25