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Ashford University ACC 206 Week 4 Assignment




Question;Week Four Assignment;Please complete the following 3 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;Williams Company as of December 31, 20X8, follows.;WILLIAMS COMPANY;Balance Sheet;December 31, 12X8;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;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 20X9 are: January, 1,600 units,- February, 1,700 units, March, 1,900;units, April, 2,100 units, May, 2,200 units.Management wants to maintain the finished goods;inventory at 30% of the following month's sales.Williams 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.Seventy percent of all purchases are paid in the;month of purchase, the remaining 30% are paid in the subsequent month.Williams? product requires 30 minutes of direct;labor time. Each hour of direct labor costs $9.;Instructions;Rounding computations to the nearest dollar;prepare the following for January through March:Sales budget;Schedule of cash collections:Production;budget;4);Direct material purchases budget;Schedule of cash disbursements for material;purchases;Direct labor budget;b. Determine the balances in the following;accounts as of March 31;2.Basic flexible budgeting;Sydney, Inc., has the;following budgeted production costs;Direct;materials;$0.45;per unit;Direct;labor;1.80;per unit;Variable;factory overhead;2.30;per unit;Fixed;factory overhead;Supervision;$26,000;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, Sydney produced;25,500 units and incurred the following costs;Direct Materials;$11,710;Direct Labor;47,175;Variable factory overhead;53,940;Fixed factory overhead;Supervision;24,500;Maintenance;23,700;Other;16,800;Total production costs;$177,825;Instructions;Prepare a flexible budget for 21,000, 23,000;and 24,500 units of activity.Was Sydney?s experience in the quarter cited;better or worse than anticipated?Prepare an appropriate performance report and;explain your answer.Explain the benefit of using flexible budgets;(as opposed to static budgets) in the measurement of performance.3. Straightforward variance analysisAndy Enterprises uses a standard costing system. The;standard cost sheet for product no. 551 follows.;Direct materials: 4;units @ $6.50;$26.00;Direct labor: 8 hours;@ $8.50;68.00;Variable factory;overhead: 8 hours;@ $7.00;56.00;Fixed factory;overhead: 8 hours;@ 2.5;20.00;Total standard cost;per unit;$170.00;The following;information pertains to activity for December;Direct materials acquired during the month;amounted to 26,350 units at $6.40 per unit. All materials were consumed in;operations.Andy incurred an average wage rate of $8.75 for;51,400 hours of activity.Total overhead incurred amounted to $508,400.;Budgeted fixed overhead totals $1.8 million and is spread evenly throughout the;year.Actual production amounted to 6,500 completed;units.Instructions;Compute Andy?s direct material variances.Compute Andy's direct labor variances.Compute;Andy's variances for factory overhead.;Budgeted overhead;variable factory overhead;$359,800;fixed factory overhead;$128,500;total factory overhead;$488,300;Actual overhead;Variable factory overhead;$449,750;Fixed factory overhead;$128,500;Total factory overhead;$578,250


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