Acca 310 Budget Probs With Answers Set 2
Acca 310 Budget Probs With Answers Set 2
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
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.
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)?
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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
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