Question 1 Figure 8-5. Sorrell Company makes all its sales on account. Accounts

Question

Question 1

Figure 8-5.
Sorrell Company makes all its sales on account. Accounts receivable payment experience is as follows:

Percent paid in the month of sale

30%

Percent paid in the month after the sale

60%

Percent paid in the second month after the sale

8%

Sorrell provided information on sales as follows:

May

$100,000

June

$120,000

July

$130,000

August (expected)

$150,000

Refer to Figure 8-5. How much of May’s sales are expected to be uncollectible?

Answers

$8,000

$2,000

$2,500

$7,200

$0

Question 2

Figure 8-5.
Sorrell Company makes all its sales on account. Accounts receivable payment experience is as follows:

Percent paid in the month of sale

30%

Percent paid in the month after the sale

60%

Percent paid in the second month after the sale

8%

Sorrell provided information on sales as follows:

May

$100,000

June

$120,000

July

$130,000

August (expected)

$150,000

Refer to Figure 8-5. How much of June credit sales are expected to be collected in the month of July?

Answers

$30,000

$60,000

$36,000

$72,000

$80,000

Question 3

Figure 8-5.
Sorrell Company makes all its sales on account. Accounts receivable payment experience is as follows:

Percent paid in the month of sale

30%

Percent paid in the month after the sale

60%

Percent paid in the second month after the sale

8%

Sorrell provided information on sales as follows:

May

$100,000

June

$120,000

July

$130,000

August (expected)

$150,000

Refer to Figure 8-5. What is budgeted cash to be collected on account for the month of August?

Answers

$45,000

$132,000

$132,600

$150,000

$ 54,600

Question 4

Figure 9-3.
Caballero Corporation a parent company of Sorrell produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor:

Leather (20 strips @ $15)

$300

Direct labor (15 hours @ $15)

225

Total prime cost

$525

During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour.

Refer to Figure 9-3. Compute the costs of leather and direct labor that should have been incurred for the production of 150 saddles.

Answers

$36,000 and $36,000

$46,500 and $37,500

$37,200 and $40,000

$45,000 and $33,750

Question 5

Figure 9-3.
Caballero Corporation the parent company of Sorrell produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor:

Leather (20 strips @ $15)

$300

Direct labor (15 hours @ $15)

225

Total prime cost

$525

During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour.

Refer to Figure 9-3. Calculate the labor rate variance and the labor efficiency variance, respectively.

Answers

$2,500 U and $3,750 U

$2,500 F and $3,750 F

$2,250 U and $4,000 U

$2,250 F and $4,000 F

Question 6

Figure 9-3.
Caballero Corporation parent company of Sorrell produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor:

Leather (20 strips @ $15)

$300

Direct labor (15 hours @ $15)

225

Total prime cost

$525

During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour.

Refer to Figure 9-3. Compute the total budget variances for materials and labor, respectively.

Answers

$7,800 U and $6,250 F

$7,800 F and $6,250 U

$1,500 U and $3,750 U

$1,500 F and $3,750 F

Question 7

Figure 9-3.
Caballero Corporation parent company of Sorello produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor:

Leather (20 strips @ $15)

$300

Direct labor (15 hours @ $15)

225

Total prime cost

$525

During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour.

Refer to Figure 9-3. Compute the materials price variance and the materials usage variance, respectively.

Answers

$9,300 F and $1,500 U

$9,300 U and $1,500 F

$9,000 F and $1,200 U

$9,000 U and $1,200 F

Figure 8-5.
Sorrell Company makes all its sales on account. Accounts receivable payment experience is as follows:

Percent paid in the month of sale

30%

Percent paid in the month after the sale

60%

Percent paid in the second month after the sale

8%

Sorrell provided information on sales as follows:

May

$100,000

June

$120,000

July

$130,000

August (expected)

$150,000

Refer to Figure 8-5. How much of May’s sales are expected to be uncollectible?

Answers

$8,000

$2,000

$2,500

$7,200

$0

Explanation / Answer

Question 1 Refer to Figure 8-5. How much of May’s sales are expected to be uncollectible? Answers $2,000 Question 2 Refer to Figure 8-5. How much of June credit sales are expected to be collected in the month of July? Answers $72,000 Question 3 Refer to Figure 8-5. What is budgeted cash to be collected on account for the month of August? Answers $132,600 Question 4Compute the costs of leather and direct labor that should have been incurred for the production of 150 saddles. Answers $45,000 and $33,750 Question 5 Refer to Figure 9-3. Calculate the labor rate variance and the labor efficiency variance, respectively. Answers $2,500 U and $3,750 U Question 6 Refer to Figure 9-3. Compute the total budget variances for materials and labor, respectively. Answers $7,800 U and $6,250 F Question 7 Caballero Corporation parent company of Sorello produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor: Leather (20 strips @ $15) $300 Direct labor (15 hours @ $15) 225 Total prime cost $525 During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour. Refer to Figure 9-3. Compute the materials price variance and the materials usage variance, respectively. Answers $9,300 F and $1,500 U

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