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  • Acca 310 Budget Probs With Answers Set 2

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    Xyrene Keith Medrano
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    Perry Company provides budgeted sales figures and other information to calculate a purchases budget for April through June. The purchases budget totals $190,020 for the period. Christy Enterprises reports 2011 year-end financial information and develops a 2012 budget with increased prices and decreased sales volume. The budgeted 2012 net income is $83,550. Nicholas Company manufactures TVs and provides additional budget variance information to replace lost data. Flexible and static budget revenues and variances are calculated along with actual variable costs and operating income variances.

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    Perry Company provides budgeted sales figures and other information to calculate a purchases budget for April through June. The purchases budget totals $190,020 for the period. Christy Enterprises reports 2011 year-end financial information and develops a 2012 budget with increased prices and decreased sales volume. The budgeted 2012 net income is $83,550. Nicholas Company manufactures TVs and provides additional budget variance information to replace lost data. Flexible and static budget revenues and variances are calculated along with actual variable costs and operating income variances.

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    © All Rights Reserved
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    22 views2 pages

    Acca 310 Budget Probs With Answers Set 2

    Uploaded by

    Xyrene Keith Medrano
    Perry Company provides budgeted sales figures and other information to calculate a purchases budget for April through June. The purchases budget totals $190,020 for the period. Christy Enterprises reports 2011 year-end financial information and develops a 2012 budget with increased prices and decreased sales volume. The budgeted 2012 net income is $83,550. Nicholas Company manufactures TVs and provides additional budget variance information to replace lost data. Flexible and static budget revenues and variances are calculated along with actual variable costs and operating income variances.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 2

    1.

    Perry Company has the following information:

    Month Budgeted Sales


    March $100,000
    April 106,000
    May 102,000
    June 109,000
    July 105,000

    In addition, the gross profit rate is 40% and the desired inventory level is 30% of next
    month's cost of sales.

    Required:
    Prepare a purchases budget for April through June.
    Answer: April May June Total
    Desired ending inventory $ 18,360 $ 19,620 $ 18,900 $ 18,900
    Plus COGS 63,600 61,200 65,400 190,200
    Total needed 81,960 80,820 84,300 209,100
    Less beginning inventory 19,080 18,360 19,620 19,080
    Total purchases $62,880 $62,460 $64,680 $ 190,020

    2. Christy Enterprises reports the year-end information from 2011 as follows:

    Sales (100,000 units) $500,000


    Less: Cost of goods sold 300,000
    Gross profit 200,000
    Operating expenses (includes $20,000 of Depreciation) 120,000
    Net income $ 80,000

    Christy is developing the 2012 budget. In 2012 the company would like to increase
    selling prices by 10%, and as a result expects a decrease in sales volume of 5%. Cost of
    goods sold as a percentage of sales is expected to increase to 62%. Other than
    depreciation, all operating costs are variable.

    Required:
    Prepare a budgeted income statement for 2012.

    Answer: Christy Enterprises


    Budgeted Income Statement
    For the Year 2012

    Sales (95,000 × $5.50) $522,500


    Cost of goods sold (2012 sales × 62%) 323,950
    Gross profit 198,550
    Less: Operating expenses [($1.00 × 95,000] + $20,000) 115,000
    Net income $ 83,550

    3. Nicholas Company manufacturers TVs. Some of the company's data was


    misplaced. Use the following information to replace the lost data:

    Sales-
    Actual Flexible Flexible Volume Static
    Analysis Results Variances Budget Variances Budget
    Units Sold 112,500 112,500 103,125
    Revenues $42,080 $1,000 F (A) $1,400 U (B)
    Variable Costs (C) $200 U $15,860 $2,340 F $18,200
    Fixed Costs $8,280 $860 F $9,140 $9,140
    Operating Income $17,740 (D) $16,080 (E) $15,140

    Required:
    a. What are the respective flexible-budget revenues (A)?
    This study source was downloaded by 100000845994861 from CourseHero.com on 04-25-2022 22:11:02 GMT -05:00

    https://www.coursehero.com/file/34922740/ACCA-310-BUDGET-PROBS-WITH-ANSWERS-SET-2docx/
    b. What are the static-budget revenues (B)?
    c. What are the actual variable costs (C)?
    d. What is the total flexible-budget variance (D)?
    e. What is the total sales-volume variance (E)?
    f. What is the total static-budget variance?

    Answer:
    a. $42,080 - $1,000 = $41,080

    b. $41,080 + $1,400 = $42,480

    c. $15,860 + $200 = $16,060

    d. $17,740 - $16,080 = $1,660 favorable

    e. $2,340 favorable + $1,400 unfavorable = $940 favorable

    f. $17,740 - $15,140 = $2,600 favorable

    This study source was downloaded by 100000845994861 from CourseHero.com on 04-25-2022 22:11:02 GMT -05:00

    https://www.coursehero.com/file/34922740/ACCA-310-BUDGET-PROBS-WITH-ANSWERS-SET-2docx/

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