Part 1A The Bandeiras Corporation, a merchandising firm, has budgeted its activi

Question

Part 1A

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:

Sales at $630,000, all for cash.

Merchandise inventory on November 30 was $290,000.

The cash balance at December 1 was $36,000.

Selling and administrative expenses are budgeted at $114,000 for December and are paid in cash.

Budgeted depreciation for December is $61,000.

The planned merchandise inventory on December 31 is $320,000.

The cost of goods sold is 70% of the sales price.

All purchases are paid for in cash.

There is no interest expense or income tax expense.

The budgeted cash receipts for December are:

Multiple Choice

$691,000

$630,000

$495,000

$135,000

Part 1B:

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:

Overhead costs:

Distribution of Resource Consumption Across Activity Cost Pools:

In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.

Activity:

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

Sales and Direct Cost Data:

What is the product margin for Product W1 under activity-based costing?

Multiple Choice

$9,131

$8,351

$12,911

$1,089

Part 1C

Tennies Clinic uses client-visits as its measure of activity. During November, the clinic budgeted for 3,400 client-visits, but its actual level of activity was 3,390 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for November:

Data used in budgeting:

Actual results for November:

The spending variance for medical supplies in November would be closest to:

Multiple Choice

$796 F

$736 U

$736 F

$796 U

Part 1 D

Krepps Corporation produces a single product. Last year, Krepps manufactured 33,100 units and sold 27,800 units. Production costs for the year were as follows:

Sales totaled $1,320,500 for the year, variable selling and administrative expenses totaled $164,020, and fixed selling and administrative expenses totaled $205,220. There was no beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit was:

Multiple Choice

$21.40 per unit

$27.30 per unit

$16.90 per unit

$22.50 per unit

Part 1 E

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available:

All of these expenses (except depreciation) are paid in cash in the month they are incurred.

If the company has budgeted to sell 16,000 Debs in January, then the total budgeted variable selling and administrative expenses for January will be:

Multiple Choice

$36,800

$25,600

$40,000

$17,600

Equipment depreciation $ 35,000 Supervisory expense $ 12,000

Explanation / Answer

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Part 1A Since all sales are in cash, budgeted cash receipt in December will be $630000. Part 1B Machining Order Filling Other Equipment Dep 14000 10500 10500 Supervisory 4800 2400 4800 Total 18800 12900 15300 W1 18800*5660/27760 3833 1351 12900*109/1041 M0 18800*22100/27760 14967 11549 12900*932/1041

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