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##### Managerial Accounting 1B Ch21

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Question;Managerial Accounting 1B;Financial;and Managerial Accounting;Chapter 21;1.Exercise 21-1 Preparation of flexible budgets;L.O. P1;Mesa Company's fixed budget for;the first quarter of calendar year 2011 reveals the following.;Prepare flexible budgets that show;variable costs per unit, fixed costs, and three different flexible budgets;for sales volumes of 7,500, 10,000, and 12,500 units. (Round your "Variable amount per unit" to 2;decimal places. Input all amounts as positive values. Omit the;$" sign in your response.);MESA COMPANY;Flexible Budgets;For Quarter Ended March 31, 2011;Flexible;Budget;2.;Exercise 21-4;Preparation of a flexible budget performance report L.O. P1;Daytec Company?s fixed budget;performance report for June follows. The $440,000 budgeted expenses include;$300,000 variable expenses and $140,000 fixed expenses. Actual expenses;include $130,000 fixed expenses.;Prepare a flexible budget;performance report showing any variances between budgeted and actual results.;List fixed and variable expenses separately. (Input;all amounts as a positive value. Indicate the effect of each variance by;selecting "F" for favorable, "U" for unfavorable, and;None" for no effect (i.e., zero variance). Leave no cells blank -;be certain to enter "0" wherever required. Omit the "$;sign in your response.);Exercise 21-7A;Computation and interpretation of overhead spending, efficiency, and volume;variances L.O. P3;[The following information applies to the questions displayed;below.];Sonic Company set the following;standard costs for one unit of its product for 2011.;The $3.00 ($2.50 + $0.50) total;overhead rate per direct labor hour is based on an expected operating level;equal to 75% of the factory's capacity of 50,000 units per month. The;following monthly flexible budget information is also available.;During the current month, the;company operated at 70% of capacity, employees worked 500,000 hours, and the;following actual overhead costs were incurred.;3.;Exercise 21-7 Part 1;1.;Compute variable overhead spending;and efficiency variances.(Input all amounts;as a positive value. Indicate the effect of each variance by selecting;F" for favorable, "U" for unfavorable, and;None" for no effect (i.e., zero variance). Leave no cells;blank - be certain to enter "0" wherever required. Omit the;$" sign in your response.);Spending variances;$;U;Efficiency variances;$;F;4.;Exercise 21-7 Part 2;2.;Compute Fixed overhead spending;and volume variances.(Input all amounts as a;positive value. Indicate the effect of each variance by selecting;F" for favorable, "U" for unfavorable, and;None" for no effect (i.e., zero variance). Leave no cells;blank - be certain to enter "0" wherever required. Omit the;$" sign in your response.);Spending variances;$;U;Volume variances;$;U;5.Exercise 21-7 Part 3;3.;Compute controllable;variance.(Input all amounts as a positive;value. Indicate the effect of each variance by selecting "F" for;favorable, "U" for unfavorable, and "None" for no effect;(i.e., zero variance). Leave no cells blank - be certain to enter "0";wherever required. Omit the "$" sign in your response.);Controllable variance;$;F;6.Exercise 21-8 Computation and interpretation;of materials variances L.O. P2;BTS Company made 6,000 bookshelves;using 88,000 board feet of wood costing $607,200. The company?s direct;materials standards for one bookshelf are 16 board feet of wood at $7 per;board foot.;(1);Compute the direct materials;variances incurred in manufacturing these bookshelves. (Do not round your intermediate calculations. Input all amounts;as a positive value. Indicate the effect of each variance by selecting;F" for favorable, "U" for unfavorable, and;None" for no effect (i.e., zero variance). Leave no cells blank;- be certain to enter "0" wherever required. Omit the "$;sign in your response.);Problem 21-1A;Computation of materials, labor, and overhead variances L.O. P2, P3;[The following information applies to the questions displayed;below.];Tuna Company set the following;standard unit costs for its single product.;The predetermined overhead rate is;based on a planned operating volume of 80% of the productive capacity of;60,000 units per quarter. The following flexible budget information is;available.;During the current quarter, the;company operated at 70% of capacity and produced 42,000 units of product;actual direct labor totaled 250,000 hours. Units produced were assigned the;following standard costs;Actual costs incurred during the;current quarter follow;7.Problem 21-1A Part 1;Required;1.;Compute the direct materials cost;variance, including its price and quantity variances.(Indicate the effect of each variance by selecting;F" for favorable, "U" for unfavorable, and;None" for no effect (i.e., zero variance). Input all amounts as;positive values. Leave no cells blank - be certain to enter "0";wherever required. Omit the "$" sign in your response.);8.;Problem 21-1A Part 2;2.;Compute the direct labor variance;including its rate and efficiency variances.(Indicate;the effect of each variance by selecting "F" for favorable;U" for unfavorable, and "None" for no effect (i.e., zero;variance). Input all amounts as positive values. Leave no cells blank - be;certain to enter "0" wherever required. Omit the "$" sign;in your response.);9.Problem 21-1A Part 3;3.;Compute the overhead controllable;and volume variances.(Indicate the effect of;each variance by selecting "F" for favorable, "U" for;unfavorable, and "None" for no effect (i.e., zero variance). Input;all amounts as positive values. Leave no cells blank - be certain to enter;0" wherever required. Omit the "$" sign in your response.);Controllable variance;$;Fixed overhead volume;variance;$;Problem 21-3A;Preparation and analysis of a flexible budget L.O. P1;[The following information applies to the questions displayed;below.];Pebco Company?s 2011 master budget;included the following fixed budget report. It is based on an expected;production and sales volume of 20,000 units.;PEBCO;COMPANY;Fixed Budget Report;For Year Ended December 31, 2011;10.Problem 21-3A Part 1;1.;Classify all items listed in the;fixed budget as variable or fixed. Also determine their amounts per unit or;their amounts for the year, as appropriate. (Round;your variable amount answers to 2 decimal places. Omit the "$;sign in your response.);11.Problem 21-3A Part 2;2.;Prepare flexible budgets for the;company at sales volumes of 18,000 and 24,000 units.(Round your variable;amount per unit answers to 2 decimal places. Input all;amounts as positive values. Omit the "$" sign in your response.);PEBCO COMPANY;Flexible;Budgets;For Year;Ended December 31, 2011;12.Problem 21-3A Part 3;3.;The company?s business conditions;are improving. One possible result is a sales volume of approximately 28,000;units. The company president is confident that this volume is within the;relevant range of existing capacity. How much would operating income increase;over the 2011 budgeted amount of $125,000 if this level is reached without;increasing capacity?(Do not round;intermediate calculations.Omit the "$" sign in your response.);Operating income;increase;$;13.Problem 21-3A Part 4;4.;An unfavorable change in business;is remotely possible, in this case, production and sales volume for 2011;could fall to 14,000 units. How much income (or loss) from operations would;occur if sales volume falls to this level?(Input;the amount as positive value. Do not round intermediate;calculations.Omit the "$" sign in your response.);Potential operating;loss;$;Explanation;Operating income (loss) at 14,000;units

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