Accounting

REVISION COMMENTS: INSTRUCTIONS NOT FOLLOWED: Several problems were solved incorrectly upon review of the paper. Even starting with the very first problem only 8 fields were finished where there was 9 to do. Second time requesting a revision and I need a new writer. 10/28/2015 Print Assignment: Required Chapter 10 Homework ::false http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?titleType=false 1/4 Exercise 10­5 Oregon Adventures provides tours of scenic locations in Oregon. The company expects tours taken to increase dramatically compared with the prior year. For the past year, 2014, the number of tours given were as follows: First quarter 7,000 Second quarter 8,000 Third quarter 8,000 Fourth quarter 8,000 Assume that sales for each quarter in 2015 will be 31 percent higher than in 2014 and that the price per tour is $74. Prepare a sales budget by quarter for 2015. Oregon Adventures Sales Budget For the Year Ending December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Year Projected sales Sales price per unit $ $ $ $ $ Budget revenue for 2015 $ $ $ $ $ Problem 10­1 (Part Level Submission) The results of operations for the Preston Manufacturing Company for the fourth quarter of 2014 were as follows: Sales $ 590,000 Less variable cost of sales 354,000 Contribution margin 236,000 Less fixed production costs $ 118,000 Less fixed selling and administrative expenses 59,000 177,000 Income before taxes 59,000 Less taxes on income 23,600 Net income $ 35,400 Note: Preston Manufacturing uses the variable costing method. Thus, only variable production costs are included in inventory and cost of goods sold. Fixed production costs are charged to expense in the period incurred. The company’s balance sheet as of the end of the fourth quarter of 2014 was as follows: Assets: Cash $ 145,000 Accounts receivable 295,000 Inventory 387,000 Total current assets 827,000 Property, plant, and equipment 500,000 Less accumulated depreciation 126,000 Total assets $1,201,000 Liabilities and owners’ equity: Accounts payable $ 70,800 Common stock 523,000 Retained earnings 607,200 Total liabilities and owners’ equity $1,201,000 Additional information: 1. Sales and variable costs of sales are expected to increase by 12 percent in the next quarter. 2. All sales are on credit with 50 percent collected in the quarter of sale and 50 percent collected in the following quarter. 3. Variable cost of sales consists of 40 percent materials, 40 percent direct labor, and 20 percent variable overhead. Materials are purchased on credit. 50 percent are paid for in the quarter of purchase, and the remaining amount is paid for in the quarter after purchase. The inventory balance is not expected to change. Also, direct labor and variable overhead costs are paid in the quarter the expenses are incurred. 4. Fixed production costs (other than $9,000 of depreciation expense) are expected to increase by 2 percent. Fixed production costs requiring payment are paid in the quarter they are incurred. 5. Fixed selling and administrative costs (other than $8,000 of depreciation expense) are expected to increase by 1 percent. Fixed selling and administrative costs requiring payment are paid in the quarter they are incurred. 6. The tax rate is expected to be 40 percent. All taxes are paid in the quarter they are incurred. 7. No purchases of property, plant, or equipment are expected in the first quarter of 2015. (a) Prepare a budgeted income statement for the first quarter of 2015. Preston Manufacturing Company Budgeted Income Statement for the Quarter Ended March 31, 2015 10/28/2015 Print Assignment: Required Chapter 10 Homework ::false http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?titleType=false 2/4 $ : : $ : $ (b) Prepare a cash budget for the first quarter of 2015. Preston Manufacturing Company Cash Budget For the Quarter Ended March 31, 2015 : $ : : $ (c) Prepare a budgeted balance sheet as of the end of the first quarter of 2015. (List Current assets in order of liquidity.) Preston Manufacturing Company Budgeted Balance Sheet March 31, 2015 Assets $ : Liabilities and stockholders’ equity 10/28/2015 Print Assignment: Required Chapter 10 Homework ::false http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?titleType=false 3/4 Problem 10­9 (Part Level Submission) Fenzel Slide Oil produces a lubricant, SlickTone, which is used on trombone slides. Information about the budget for the year 2015 is as follows: 1. The company expects to sell 7,600 bottles of SlickTone in the first quarter, 6,200 in the second quarter, 10,800 in the third quarter, and 8,700 in the fourth quarter. 2. A bottle of SlickTone requires 6 ounces of Chemical A and 3.5 ounces of Chemical B. 3. For the first, second, and third quarters of 2015, the desired ending inventory of finished goods is equal to 8 percent of next quarter’s sales, whereas the desired ending inventory for material is 13 percent of next quarter’s production requirements. 4. There are 1,600 bottles of SlickTone, 4,600 ounces of Chemical A, and 2,200 ounces of Chemical B on hand at the beginning of the first quarter. 5. At the end of the fourth quarter, the company must have 700 bottles of SlickTone, 8,900 ounces of Chemical A, and 3,900 ounces of Chemical B to meet its needs in the first quarter of 2016. 6. The cost of Chemical A is $1.00 per ounce, the cost of Chemical B is $0.12 per ounce, and the selling price of SlickTone is $12 per bottle. 7. The cost of direct labor is $0.55 per bottle, and the cost of variable overhead is $0.70 per bottle. Fixed manufacturing overhead is $2,400 per quarter. 8. Variable selling and administrative expense is 4 percent of sales and fixed selling and administrative expense is $2,400 per quarter. (a) Prepare a production budget for each quarter of 2015. Fenzel Slide Oil Production Budget for 2015 First Quarter Second Quarter Third Quarter Fourth Quarter : : (b1) Prepare a material purchases budget for each quarter of 2015 for chemical A. (Round cost per ounce to 2 decimal places and other answers to 0 decimal places, e.g. 125.) Fenzel Slide Oil Material Purchases Budget 2015 Chemical A Quarter 1 Quarter 2 Quarter 3 Quarter 4 : : $ $ $ $ $ $ $ $ (b2) Prepare a material purchases budget for each quarter of 2015. (Round cost per ounce to 2 decimal places and other answers to 0 decimal places, e.g. 125.) Fenzel Slide Oil Material Purchases Budget 2015 Chemical B Quarter 1 Quarter 2 Quarter 3 Quarter 4 : : 10/28/2015 Print Assignment: Required Chapter 10 Homework ::false http://edugen.wileyplus.com/edugen/shared/assignment/test/agprint.uni?titleType=false 4/4 $ $ $ $ $ $ $ $ (c) Prepare a budgeted income statement for each quarter of 2015 (ignore taxes). (List variable costs before fixed costs.) Super Clean Inc. Budgeted Income Statement for the Year 2015 Quarter 1 Quarter 2 Quarter 3 Quarter 4 $ $ $ $ : : $ $ $ $ Exercise 10­15 Expected manufacturing costs for Imperial Data Devices are as follows: Variable Costs Fixed Costs per Month Direct material $8.00/unit Supervisory salaries $21,000 Direct labor 3.30/unit Factory depreciation 11,000 Variable overhead 1.50/unit Other factory costs 3,900 During the period, Imperial produced 12,930 units and incurred the following costs: Variable Costs Fixed Costs per Month Direct material $100,600 Supervisory salaries $20,610 Direct labor 46,759 Factory depreciation 9,590 Variable overhead 18,925 Other factory costs 4,160 Prepare a performance report for Imperial Data Devices. (List variable costs before fixed costs. Enter unfavorable variances using either a negative sign preceding the number e.g. ­45 or parentheses e.g. (45).) Flexible Budget Actual Difference : $ $ $ : $ $ $