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;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.Management wants to maintain the finished goods;inventory at 30% of the following month's sales.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.Seventy percent of all purchases are paid in the;month of purchase, the remaining 30% are paid in the subsequent month.Watson's product requires 30 minutes of direct;labor time. Each hour of direct labor costs $7.;Instructions;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;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;Prepare a flexible budget for 20,000, 22,500, and;25,000 units of activity.Was Centron'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 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;Direct materials acquired during the month;amounted to 26,350 units at $6.40 per unit. All materials were consumed in;operations.Arrow 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 Arrow's direct material variances.Compute Arrow's direct labor variances.Compute Arrow's variances for factory overhead.
Paper#42101 | Written in 18-Jul-2015Price : $30