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Question
Allan Corporation has a sales budget for March of $440,000. About 10% are cash sales and the remainder is sold on account.
The company expects that 60% of credit sales will be collected in the month of the sale, 25% in the next month and 10% in the following month.
Materials purchased on account are expected to be $250,000. Allan pays 35% in the month of the purchase, 50% in the month following the purchase and the remaining 15% in the second month after the purchase.
Salaries and wages of the workers are approximately $45,000 per month. The employees are paid weekly so on average 95% of their wages are paid in the month to which they relate and the remaining 5% is paid in the following month.
Utilities average $4,300 per month.
Rent on the building is $9,000 per month.
Insurance is $3,000 per month and advertising costs are $1,000 per month.
February sales were $320,000 and purchases of materials in February were $170,000; January sales were $200,000 and purchases of materials in January were $130,000.
The cash balance on March 1st is $5,400.
Required:
A. Prepare a schedule of cash receipts
B. Prepare a schedule of cash payments (Accounts payable payments)
C. Prepare a cash budget
Answer
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Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:
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Insurance 11,000
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Q:
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Variable overhead: 5 hours $4.00 per hour 20.00
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Required:
A. Calculate the variable overhead spending variance and indicate whether it is favorable or unfavorable.
B. Calculate the variable overhead efficiency variance and indicate whether it is favorable or unfavorable.
C. Calculate the fixed overhead spending variance and indicate whether it is favorable or unfavorable.
D. Calculate the fixed overhead volume variance and indicate whether it is favorable or unfavorable.