Ashford acc 206 week 4 chapter six and seven problems
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Ashford acc 206 week 4 chapter six and seven problems Ashford acc 206 week 4 chapter six and seven problems Document Transcript

  • ASHFORD ACC 206 Week 4 Chapter Six and Seven ProblemsPLEASE DOWNLOAD HEREChapter 6 and 7 Problems. Please complete the following 8 exercises below ineither Excel or a word document (but must be single document). You must showyour work where appropriate (leaving the calculations within Excel cells isacceptable). Save the document, and submit it in the appropriate week using theAssignment Submission button.Chapter 6 Exercise 22. Schedule of cash collections Sugarland Company sells a single product andanticipates opening a new facility in Charlotte on May 1 of the current year.Expected sales during the first three months of activity are: May, $60,000; June,$80,000; and July, $85,000. Thirty percent of all sales are for cash; the remaining70% are on account. Credit sales have the following collection pattern: Collectedin the month of sale60%Collected in the month following sale 35 Uncollectible 5a. Prepare a schedule of cash collections for May through July.b. Compute the expected balance in Accounts Receivable as of July 31.Chapter 6 Exercise 4 4. Production and cash-outlay computations RPR, Inc.,anticipates that 120,000 units of product K will be sold during May. Each unit ofproduct K requires four units of raw material A. Actual inventories as of May 1 andbudgeted inventories as of May 31 follow.1-May31-MayProduct K (Units)55,00060,000Rate Materials A (Units)
  • 40,00037,000Each unit of raw material A costs $8; RPR pays for all purchases in the month ofacquisition. Invoices that account for 80% of the cost of materials acquired will bepaid within 10 days of receipt, entitling the company to a 2% cash discount.a. Determine the number of units of product K to be manufactured in May.b. Compute the May cash outlay for purchases of raw material A.Chapter 6 Exercise 5 5. Abbreviated cash budget; financing emphasis Anabbreviated cash budget for Big Chuck Enterprises follows.Big Chuck wishes to maintain a $10,000 minimum cash balance at all times.Additional financing is available (and retired) in $1,000 multiples at a 12% interestrate. Assume that borrowings take place at the beginning of the month;retirements, in contrast, occur at the end of the month. Interest is paid at the timeof repaying principal and computed on the portion of principal repaid.a. Find the unknowns in Big Chucks abbreviated cash budget.b. Determine the outstanding loan balance as of September 30, after anyrepayments have been made.Chapter 6 Problem 3 3. Comprehensive budgetingThe balance sheet of Watson Company as of December 31, 19X1, follows.JulyAugustSeptemberBeginning cash balance$10,000$?$?Add: Cash receipts50,000
  • 63,00071,000Deduct: Cash payments-64,000-58,000-64,000Cash excess (deficiency) before financing($4,000)$?$?FinancingBorrowing to maintain minimum balance???Principal repayment???Interest payment???Ending cash balance$?
  • $?$?The following information has been extracted from the firms accounting records:1. All sales are made on account at $20 per unit. Sixty percent of the sales arecollected in the month of sale; the remaining 40% are collected in the followingmonth. Forecasted sales for the first five months of 19X2 are: January, 1,500units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100units.2. Management wants to maintain the finished goods inventory at 30% of thefollowing months sales.3. Watson uses four units of direct material in each finished unit. The directmaterial price has been stable and is expected to remain so over the next sixmonths. Management wants to maintain the ending direct materials inventory at60% of the following months production needs.4. Seventy percent of all purchases are paid in the month of purchase; theremaining 30% are paid in the subsequent month.5. Watsons product requires 30 minutes of direct labor time. Each hour of directlabor costs $7.Instructions:a. Rounding computations to the nearest dollar, prepare the following for Januarythrough March:1) Sales budget2) Schedule of cash collections3) Production budget4) Direct material purchases budget5) Schedule of cash disbursements for material purchases 6) Direct labor budgetb. Determine the balances in the following accounts as of March 31:1) Accounts Receivable2) Direct Materials3) Accounts Payable
  • Chapter 7 Exercise 33. Variances for direct materials and direct laborBanner Company manufactures flags of various countries. Each flag has astandard of eight square feet of fabric and three hours of direct labor time.Information about recent production activity follows.Actual cost of fabric: $4.50 per square footFabric consumed: 32,080 square feetStandard price per square foot of fabric: $4.25Standard direct labor rate: $10.00 per hourActual direct labor rate: $10.20 per hourActual labor hours worked: 11,940Actual production completed: 4,000 flagsa. Compute the materials price variance and the materials quantity variance.b. Compute the labor rate variance and the labor efficiency variance.Chapter 7 Exercise 55. Overhead variancesNova Manufacturing applies factory overhead to products on the basis of directlabor hours. At the beginning of the current year, the companys accountant madethe following estimates for the forthcoming period: Estimated variable overhead:$500,000 Estimated fixed overhead: $400,000 Estimated direct labor hours:40,000It is now 12 months later. Actual total overhead incurred in the manufacture of7,900 units amounted to $895,100. Actual labor hours totaled 39,800. Assuming adirect labor standard of five hours per finished unit, calculate the following:a. Variable overhead efficiency varianceb. Fixed overhead volume variancec. Overhead spending varianceChapter 7 Problem 1
  • 1. P26-A1 Basic flexible budgeting (L.O. 2) Centron, Inc., has the followingbudgeted production costs:Direct materials$0.40 per unitDirect labor1.80 per unitVariable factory overhead2.20 per unitFixed factory overheadSupervision$24,000Maintenance18,000Other12,000Instructions:a. Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity.b. Was Centrons experience in the quarter cited better or worse than anticipated?Prepare an appropriate performance report and explain your answer.c. Explain the benefit of using flexible budgets (as opposed to static budgets) inthe measurement of performance.Chapter 7 Problem 55. P26-B3 Straightforward variance analysis (L.O. 5)Arrow Enterprises uses a standard costing system. The standard cost sheet forproduct no. 549 follows.The following information pertains to activity for December:
  • 1. Direct materials acquired during the month amounted to 26,350 units at $6.40per unit. All materials were consumed in operations.2. Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity.3. Total overhead incurred amounted to $508,400. Budgeted fixed overheadtotals $1.8 million and is spread evenly throughout the year.4. Actual production amounted to 6,500 completed units.Instructions:a. Compute Arrows direct material variances.b. Compute Arrows direct labor variances.c. Compute Arrows variances for factory overhead