Calculations Shown



Homestyle Interiors sells a variety of home furnishings including entertainment centers. On March 31, the company had 144 centers in inventory. The company’s policy is to maintain a entertainment center inventory equal to 9% of next month’s expected sales. The company expects the following sales activity for the second quarter of the year:
April
1,600 centers
May
2,400 centers
June
1,500 centers

What is the projected production for May?

Select Manufacturing sells a variety of office products including two-drawer file cabinets. On June 30, the company had 1,200 cabinets in inventory. The company’s policy is to maintain a cabinet inventory equal to 20% of next month’s sales. The company expects the following sales activity for the third quarter of the year:
July
6,000 cabinets
August
8,000 cabinets
September
9,600 cabinets

In addition, October’s sales are projected to be 10,000 cabinets. What is the total required production for the third quarter?

Donnelly Manufacturing

Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following sales forecast for the third quarter of 2013:

July
10,000 units
August
12,000 units
September
20,000 units

Inventory at June 30, 2013 was budgeted at 1,500 units. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 15% of next month’s budgeted unit sales. October’s sales are projected to be 24,000 units.

Each completed unit of finished product requires 2.5 square feet of cedar at a cost of $3.5 per square foot.

Refer to the Donnelly Manufacturing information above. The company has determined that it needs 10 percent of next month’s raw material needs on hand at the end of each month.

The cost of the direct material that should be purchased in August is:

Holmes Manufacturing Inc. had the following purchases budgeted for the last six months of 2013:
July
$60,000
August
45,000
September
52,000
October
60,000
November
80,000
December
85,000

Holmes pays one-half of a month’s purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2013?

McCourt Inc. manufacturers a unique product. The company’s controller has prepared the following static budget for the month of February:
Estimated production
300 units
Direct labor per unit
1 hour
Direct labor required for estimated production
300 hours
Average direct labor rate per hour
$     10
Estimated direct labor cost
$3,000

Actual production during February was 275 units and actual direct labor cost was $2,900.

If McCourt prepares a flexible budget for February, the projected direct labor cost would be:

Violetta Inc. manufactures plastic storage boxes. Management has determined that each medium-sized box has a standard materials cost of $1.20 when 4 pounds of raw material at a cost of $.30 per pound are used. The static budget for the month of March showed an estimated production of 15,000 boxes in March. During March, 17,000 boxes were actually produced. The actual cost for each box was $1.56 when 3.9 pounds of raw material at a cost of $.40 per pound were purchased and used. What should be the total direct materials cost according to Violetta’s flexible budget for March?
Trina makes handmade leis in Hawaii which she sells to local tourists. She anticipates August to be a busy month with the sale of 500 leis. She has prepared the following static budget for August:
Sales revenue (500 units)
$5,000
Variable costs:
Direct materials
1,000
Direct labor
1,000
Overhead
375
Fixed costs
     200
Net operating income
$2,425

During August, Trina actually produced and sold 400 leis. What should be Trina’s net operating income in August based on a flexible budget?

Rogers Rods & Reels Ltd.

Rogers Rods & Reels Ltd. manufactures and sells various types of fishing equipment. At the end of 2011, Rogers had estimated for the production and sale of 15,000 bass fishing rods. Each rod has a standard calling for 1.5 pounds of direct material at a standard rate of $8.00 per pound and 15 minutes of direct labor time at a standard rate of $.18 per minute. During 2012, Rogers actually produced and sold 16,000 rods. These 16,000 rods had an actual direct materials cost of $179,200 (25,600 pounds at $7.00 per pound) and an actual direct labor cost of $44,800 (224,000 minutes at $.20 per minute). Each rod sells for $50.

Refer to the Rogers Rods & Reels Ltd. information above. What is Rogers’ net operating income based on a flexible budget?

Chilé Products Ltd.

Chilé Products Ltd. bottles and sells hot pepper sauce. In 2012, the company had expected to sell 65,000 bottles but actually bottled and sold 80,000 bottles. The standard direct materials cost for each bottle is $.24 comprised of .60 ounces at a cost of $.40 per ounce. During 2012, 52,000 ounces of material were purchased out of which 46,000 ounces were used at a cost of $.37 per ounce.

Refer to the Chilé Products Ltd. information above. The direct materials price variance for 2012 was:

JAX Inc.

In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:

Direct materials:
1.50 pounds at $2.50 per lb
Direct labor:
30 minutes of assembly at $.20 per minute

Actual results for 2012 were determined to be as follows:

Number of units produced
     and sold:
5,600 units
Sales revenue:
$100,800 ($18 per unit)
Direct materials cost:
$  22,848 (9,520 lbs purchased and used at $2.40 per lb)
Direct labor cost:
$  38,192 (173,600 minutes at $.22 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.’s sales price variance for 2012?

JAX Inc.

In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:

Direct materials:
1.50 pounds at $2.50 per lb
Direct labor:
30 minutes of assembly at $.20 per minute

Actual results for 2012 were determined to be as follows:

Number of units produced
     and sold:
5,600 units
Sales revenue:
$100,800 ($18 per unit)
Direct materials cost:
$  22,848 (9,520 lbs purchased and used at $2.40 per lb)
Direct labor cost:
$  38,192 (173,600 minutes at $.22 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.’s direct materials usage variance for 2012?

JAX Inc.

In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:

Direct materials:
1.50 pounds at $2.50 per lb
Direct labor:
30 minutes of assembly at $.20 per minute

Actual results for 2012 were determined to be as follows:

Number of units produced
     and sold:
5,600 units
Sales revenue:
$100,800 ($18 per unit)
Direct materials cost:
$  22,848 (9,520 lbs purchased and used at $2.40 per lb)
Direct labor cost:
$  38,192 (173,600 minutes at $.22 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.’s direct materials price variance for 2012?

JAX Inc.

In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:

Direct materials:
1.50 pounds at $2.50 per lb
Direct labor:
30 minutes of assembly at $.20 per minute

Actual results for 2012 were determined to be as follows:

Number of units produced
     and sold:
5,600 units
Sales revenue:
$100,800 ($18 per unit)
Direct materials cost:
$  22,848 (9,520 lbs purchased and used at $2.40 per lb)
Direct labor cost:
$  38,192 (173,600 minutes at $.22 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.’s direct labor rate variance for 2012?