# ACC 206 Week 4 Assignment

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ACC 206 Week 4 Assignment

Please complete the following exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

1. Comprehensive budgeting

The balance sheet of Watson Company as of December 31, 20X1, follows.

 WATSON COMPANY Balance Sheet December 31, 12X1 Assets Cash \$4,595 Accounts receivable 10,000 Finished goods (575 units x \$7.00) 4,025 Direct materials (2,760 units x \$0.50) 1,380 Plant & equipment \$50,000 Less: Accumulated depreciation 10,000 40,000 Total assets \$60,000 Liabilities & Stockholders’ Equity Accounts payable to suppliers \$14,000 Common stock \$25,000 Retained earnings 21,000 46,000 Total liabilities &. stockholders’ equity \$60,000

The following information has been extracted from the firm’s accounting records:

1. All sales are made on account at \$20 per unit. Sixty percent of the sales are collected in the month of sale; the remaining 40% are collected in the following month. Forecasted sales for the first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100 units.

2. Management wants to maintain the finished goods inventory at 30% of the following month’s sales.

3. Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month’s production needs.

4. Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month.

5. Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs \$7.

Instructions:

1. Rounding computations to the nearest dollar, prepare the following for January through March:

1) Sales budget

2) Schedule of cash collections

3) Production budget

4) Direct material purchases budget

5) Schedule of cash disbursements for material purchases
6) Direct labor budget

1. Determine the balances in the following accounts as of March 31:

1) Accounts Receivable

2) Direct Materials

3) Accounts Payable

2. Basic flexible budgeting
Centron, Inc., has the following budgeted production costs:

 Direct materials \$0.40 per unit Direct labor 1.80 per unit Variable factory overhead 2.20 per unit Fixed factory overhead Supervision \$24,000 Maintenance 18,000 Other 12,000

The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by \$6,000 and \$4,500, respectively.

During the recent quarter ended March 31, Centron produced 25,500 units and incurred the following costs:

 Direct Materials \$10,710 Direct Labor 47,175 Variable factory overhead 51,940 Fixed factory overhead Supervision 24,500 Maintenance 23,700 Other 16,800 Total production costs \$174,825

Instructions:

1. Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity.

2. Was Centron’s experience in the quarter cited better or worse than anticipated? Prepare an appropriate performance report and explain your answer.

3. Explain the benefit of using flexible budgets (as opposed to static budgets) in the measurement of performance.

3. Straightforward variance analysis

Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.

 Direct materials: 4 units @ \$6.50 \$26.00 Direct labor: 8 hours @ \$8.50 68 Variable factory overhead: 8 hours @ \$7.00 56 Fixed factory overhead: 8 hours @ 2.5 20 Total standard cost per unit \$170.00

The following information pertains to activity for December:

1. Direct materials acquired during the month amounted to 26,350 units at \$6.40 per unit. All materials were consumed in operations.

2. Arrow incurred an average wage rate of \$8.75 for 51,400 hours of activity.

3. Total overhead incurred amounted to \$508,400. Budgeted fixed overhead totals \$1.8 million and is spread evenly throughout the year.

4. Actual production amounted to 6,500 completed units.

Instructions:

1. Compute Arrow’s direct material variances.

2. Compute Arrow’s direct labor variances.

3. Compute Arrow’s variances for factory overhead.

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# ACC 206 Week 4 Assignment

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ACC 206 Week 4 Assignment: Chapter 6 and 7 Problems

Please complete the following exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

Chapter 6 Problem 3
1. Comprehensive budgeting
The balance sheet of Watson Company as of December 31, 20X1, follows.
WATSON COMPANY
Balance Sheet
December 31, 12X1
Assets
Cash \$4,595
Accounts receivable 10,000
Finished goods (575 units x \$7.00) 4,025
Direct materials (2,760 units x \$0.50) 1,380
Plant & equipment \$50,000
Less: Accumulated depreciation 10,000 40,000
Total assets \$60,000
Liabilities & Stockholders’ Equity
Accounts payable to suppliers \$14,000
Common stock \$25,000
Retained earnings 21,000 46,000
Total liabilities &. stockholders’ equity \$60,000

The following information has been extracted from the firm’s accounting records:
1. All sales are made on account at \$20 per unit. Sixty percent of the sales are collected in the month of sale; the remaining 40% are collected in the following month. Forecasted sales for the first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100 units.
2. Management wants to maintain the finished goods inventory at 30% of the following month’s sales.
3. Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month’s production needs.
4. Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month.
5. Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs \$7.
Instructions:
a. Rounding computations to the nearest dollar, prepare the following for January through March:
1) Sales budget
2) Schedule of cash collections
3) Production budget
4) Direct material purchases budget
5) Schedule of cash disbursements for material purchases
6) Direct labor budget
b. Determine the balances in the following accounts as of March 31:
1) Accounts Receivable
2) Direct Materials
3) Accounts Payable

Chapter 7 Problem 1
2. Basic flexible budgeting
Centron, Inc., has the following budgeted production costs:
Direct materials \$0.40 per unit
Direct labor 1.80 per unit
Variable factory overhead 2.20 per unit
Supervision \$24,000
Maintenance 18,000
Other 12,000

The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by \$6,000 and \$4,500, respectively.
During the recent quarter ended March 31, Centron produced 25,500 units and incurred the following costs:

Direct Materials \$10,710
Direct Labor 47,175
Supervision 24,500
Maintenance 23,700
Other 16,800
Total production costs \$174,825

Instructions:
a. Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity.
b. Was Centron’s experience in the quarter cited better or worse than anticipated? Prepare an appropriate performance report and explain your answer.
c. Explain the benefit of using flexible budgets (as opposed to static budgets) in the measurement of performance.

Chapter 7 Problem 5
3. Straightforward variance analysis
Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.
Direct materials: 4 units @ \$6.50 \$26.00
Direct labor: 8 hours @ \$8.50 68
Variable factory overhead: 8 hours @ \$7.00 56
Fixed factory overhead: 8 hours @ 2.5 20
Total standard cost per unit \$170.00

The following information pertains to activity for December:
1. Direct materials acquired during the month amounted to 26,350 units at \$6.40 per unit. All materials were consumed in operations.
2. Arrow incurred an average wage rate of \$8.75 for 51,400 hours of activity.
3. Total overhead incurred amounted to \$508,400. Budgeted fixed overhead totals \$1.8 million and is spread evenly throughout the year.
4. Actual production amounted to 6,500 completed units.

Instructions:
a. Compute Arrow’s direct material variances.
b. Compute Arrow’s direct labor variances.
c. Compute Arrow’s variances for factory overhead.

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# ACC 206 Week 4 Assignment

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Category:

## Description

ACC 206 Week 4 Assignment

Please complete the following exercises below in either Excel or a word
document (but must be single document). You must show your work where
appropriate (leaving the calculations within Excel cells is acceptable). Save
the document, and submit it in the appropriate week using the Assignment
Submission button.

1.
Comprehensive budgeting

The balance sheet of Watson Company as of
December 31, 20X1, follows.

 WATSON COMPANY Balance Sheet December 31, 12X1 Assets Cash \$4,595 Accounts receivable 10,000 Finished goods (575 units x \$7.00) 4,025 Direct materials (2,760 units x \$0.50) 1,380 Plant & equipment \$50,000 Less: Accumulated depreciation 10,000 40,000 Total assets \$60,000 Liabilities & Stockholders’ Equity Accounts payable to suppliers \$14,000 Common stock \$25,000 Retained earnings 21,000 46,000 Total liabilities &. stockholders’ equity \$60,000

The following
information has been extracted from the firm’s accounting records:

1. All sales are made on account at \$20 per unit.
Sixty percent of the sales are collected in the month of sale; the remaining
40% are collected in the following month. Forecasted sales for the first five
months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800
units; April, 2,000 units; May, 2,100 units.

2. Management wants to maintain the finished goods
inventory at 30% of the following month’s sales.

3. Watson uses four units of direct material in each
finished unit. The direct material price has been stable and is expected to
remain so over the next six months. Management wants to maintain the ending
direct materials inventory at 60% of the following month’s production needs.

4. Seventy percent of all purchases are paid in the
month of purchase; the remaining 30% are paid in the subsequent month.

5. Watson’s product requires 30 minutes of direct
labor time. Each hour of direct labor costs \$7.

Instructions:

1. Rounding computations to the nearest dollar,
prepare the following for January through March:

1) Sales budget

2) Schedule of cash collections

3) Production budget

4) Direct material purchases budget

5) Schedule of cash disbursements for material purchases

6) Direct labor budget

1. Determine the balances in the following accounts
as of March 31:

1) Accounts Receivable

2) Direct Materials

3) Accounts
Payable

2. Basic flexible budgeting

Centron, Inc., has the
following budgeted production costs:

 Direct materials \$0.40 per unit Direct labor 1.80 per unit Variable factory overhead 2.20 per unit Fixed factory overhead Supervision \$24,000 Maintenance 18,000 Other 12,000

The company normally manufactures between 20,000
and 25,000 units each quarter. Should output exceed 25,000 units, maintenance
and other fixed costs are expected to increase by \$6,000 and \$4,500,
respectively.

During the recent quarter ended March 31, Centron
produced 25,500 units and incurred the following costs:

 Direct Materials \$10,710 Direct Labor 47,175 Variable factory overhead 51,940 Fixed factory overhead Supervision 24,500 Maintenance 23,700 Other 16,800 Total production costs \$174,825

Instructions:

1. Prepare a flexible budget for 20,000, 22,500, and
25,000 units of activity.

2. Was Centron’s experience in the quarter cited
better or worse than anticipated? Prepare an appropriate performance report and

3. Explain the benefit of using flexible budgets (as
opposed to static budgets) in the measurement of performance.

3.
Straightforward variance analysis

Arrow
Enterprises uses a standard costing system. The standard cost sheet for product
no. 549 follows.

 Direct materials: 4 units @ \$6.50 \$26.00 Direct labor: 8 hours @ \$8.50 68 Variable factory overhead: 8 hours @ \$7.00 56 Fixed factory overhead: 8 hours @ 2.5 20 Total standard cost per unit \$170.00

The following information pertains to activity
for December:

1. Direct materials acquired during the month
amounted to 26,350 units at \$6.40 per unit. All materials were consumed in
operations.

2. Arrow incurred an average wage rate of \$8.75 for
51,400 hours of activity.

3. Total overhead incurred amounted to \$508,400.
Budgeted fixed overhead totals \$1.8 million and is spread evenly throughout the
year.

4. Actual production amounted to 6,500 completed
units.

Instructions:

1. Compute Arrow’s direct material variances.

2. Compute Arrow’s direct labor variances.

3. Compute Arrow’s variances for factory overhead.

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# ACC 206 Week 4 Assignment

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Category:

## Description

ACC 206 Week 4
Assignment

Please complete the following exercises below
in either Excel or a word document (but must be single document). You must show
your work where appropriate (leaving the calculations within Excel cells is
acceptable). Save the document, and submit it in the appropriate week using the
Assignment Submission button.

1. Comprehensive budgeting

The balance sheet of Watson Company as of December 31,
20X1, follows.

 WATSON COMPANY Balance Sheet December 31, 12X1 Assets Cash \$4,595 Accounts receivable 10,000 Finished goods (575 units x \$7.00) 4,025 Direct materials (2,760 units x \$0.50) 1,380 Plant & equipment \$50,000 Less: Accumulated depreciation 10,000 40,000 Total assets \$60,000 Liabilities & Stockholders’ Equity Accounts payable to suppliers \$14,000 Common stock \$25,000 Retained earnings 21,000 46,000 Total liabilities &. stockholders’ equity \$60,000

The following information has been extracted from the firm’s
accounting records:

1. All sales are
made on account at \$20 per unit. Sixty percent of the sales are collected in
the month of sale; the remaining 40% are collected in the following month.
Forecasted sales for the first five months of 20X2 are: January, 1,500 units,-
February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100
units.

2. Management wants
to maintain the finished goods inventory at 30% of the following month’s sales.

3. Watson uses four
units of direct material in each finished unit. The direct material price has
been stable and is expected to remain so over the next six months. Management
wants to maintain the ending direct materials inventory at 60% of the following
month’s production needs.

4. Seventy percent
of all purchases are paid in the month of purchase; the remaining 30% are paid
in the subsequent month.

5. Watson’s product
requires 30 minutes of direct labor time. Each hour of direct labor costs \$7.

Instructions:

a. Rounding
computations to the nearest dollar, prepare the following for January through
March:

1) Sales budget

2) Schedule of cash
collections

3) Production budget

4) Direct material purchases
budget

5) Schedule of cash
disbursements for material purchases
6) Direct labor budget

b. Determine the
balances in the following accounts as of March 31:

1) Accounts Receivable

2) Direct Materials

3) Accounts Payable

2. Basic flexible budgeting
Centron, Inc., has the following budgeted
production costs:

 Direct materials \$0.40 per unit Direct labor 1.80 per unit Variable factory overhead 2.20 per unit Fixed factory overhead Supervision \$24,000 Maintenance 18,000 Other 12,000

The company normally manufactures between 20,000 and 25,000 units
each quarter. Should output exceed 25,000 units, maintenance and other fixed
costs are expected to increase by \$6,000 and \$4,500, respectively.

During the recent quarter ended March 31, Centron produced 25,500
units and incurred the following costs:

 Direct Materials \$10,710 Direct Labor 47,175 Variable factory overhead 51,940 Fixed factory overhead Supervision 24,500 Maintenance 23,700 Other 16,800 Total production costs \$174,825

Instructions:

a.
Prepare a flexible budget for
20,000, 22,500, and 25,000 units of activity.

b.
Was Centron’s experience in the
quarter cited better or worse than anticipated? Prepare an appropriate

c.
Explain the benefit of using
flexible budgets (as opposed to static budgets) in the measurement of
performance.

3. Straightforward
variance analysis

Arrow Enterprises uses a standard
costing system. The standard cost sheet for product no. 549 follows.

 Direct materials: 4 units @ \$6.50 \$26.00 Direct labor: 8 hours @ \$8.50 68 Variable factory overhead: 8 hours @ \$7.00 56 Fixed factory overhead: 8 hours @ 2.5 20 Total standard cost per unit \$170.00

The following information pertains to activity for
December:

1.
Direct materials acquired
during the month amounted to 26,350 units at \$6.40 per unit. All materials were
consumed in operations.

2.
Arrow incurred an average wage
rate of \$8.75 for 51,400 hours of activity.

3.
amounted to \$508,400. Budgeted fixed overhead totals \$1.8 million and is spread
evenly throughout the year.

4.
Actual production amounted to
6,500 completed units.

Instructions:

a.
Compute Arrow’s direct material
variances.

b.
Compute Arrow’s direct labor
variances.

c.
Compute Arrow’s variances for

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# ACC 206 Week 4 Assignment

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Category:

## Description

ACC 206 Week 4 Assignment

Please complete the following exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

1. Comprehensive budgeting

The balance sheet of Watson Company as of December 31, 20X1, follows.

 WATSON COMPANY Balance Sheet December 31, 12X1 Assets Cash \$4,595 Accounts receivable 10,000 Finished goods (575 units x \$7.00) 4,025 Direct materials (2,760 units x \$0.50) 1,380 Plant & equipment \$50,000 Less: Accumulated depreciation 10,000 40,000 Total assets \$60,000 Liabilities & Stockholders’ Equity Accounts payable to suppliers \$14,000 Common stock \$25,000 Retained earnings 21,000 46,000 Total liabilities &. stockholders’ equity \$60,000

The following information has been extracted from the firm’s accounting records:

1. All sales are made on account at \$20 per unit. Sixty percent of the sales are collected in the month of sale; the remaining 40% are collected in the following month. Forecasted sales for the first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100 units.

2. Management wants to maintain the finished goods inventory at 30% of the following month’s sales.

3. Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month’s production needs.

4. Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month.

5. Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs \$7.

Instructions:

a. Rounding computations to the nearest dollar, prepare the following for January through March:

1) Sales budget

2) Schedule of cash collections

3) Production budget

4) Direct material purchases budget

5) Schedule of cash disbursements for material purchases
6) Direct labor budget

b. Determine the balances in the following accounts as of March 31:

1) Accounts Receivable

2) Direct Materials

3) Accounts Payable

2. Basic flexible budgeting
Centron, Inc., has the following budgeted production costs:

 Direct materials \$0.40 per unit Direct labor 1.80 per unit Variable factory overhead 2.20 per unit Fixed factory overhead Supervision \$24,000 Maintenance 18,000 Other 12,000

The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by \$6,000 and \$4,500, respectively.

During the recent quarter ended March 31, Centron produced 25,500 units and incurred the following costs:

 Direct Materials \$10,710 Direct Labor 47,175 Variable factory overhead 51,940 Fixed factory overhead Supervision 24,500 Maintenance 23,700 Other 16,800 Total production costs \$174,825

Instructions:

a. Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity.

b. Was Centron’s experience in the quarter cited better or worse than anticipated? Prepare an appropriate performance report and explain your answer.

c. Explain the benefit of using flexible budgets (as opposed to static budgets) in the measurement of performance.

3. Straightforward variance analysis

Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.

 Direct materials: 4 units @ \$6.50 \$26.00 Direct labor: 8 hours @ \$8.50 68 Variable factory overhead: 8 hours @ \$7.00 56 Fixed factory overhead: 8 hours @ 2.5 20 Total standard cost per unit \$170.00

The following information pertains to activity for December:

1. Direct materials acquired during the month amounted to 26,350 units at \$6.40 per unit. All materials were consumed in operations.

2. Arrow incurred an average wage rate of \$8.75 for 51,400 hours of activity.

3. Total overhead incurred amounted to \$508,400. Budgeted fixed overhead totals \$1.8 million and is spread evenly throughout the year.

4. Actual production amounted to 6,500 completed units.

Instructions:

a. Compute Arrow’s direct material variances.

b. Compute Arrow’s direct labor variances.

c. Compute Arrow’s variances for factory overhead.

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