Search here for Tutorials

If the Data is different in your question, please send your questions to homeworksolutionsnow@gmail.com. The questions will be answered at the same price.

Week 7 7-2, 7-3, 7-6 EXCEL TEMPLTES – Principles of Accounting

Week 7 P7-2, P7-3, P7-6 EXCEL TEMPLTES – Principles of Accounting

P7-2 Glide Tire Company's budgeted unit sales for the year 2008 were:                          
            Passenger car tires       120,000         
            Truck tires                   25,000                                              

The budgeted selling price for truck tires was $200 per tire and for passenger car tires was $65 per tire. He beginning finished goods inventories was expected to be 2,000 truck tires and 5,000 passenger tires, for a total cost of $326,478, with desired ending inventories at 2,500 and 6,000, respectively, with a total cost of $400,510. There was no anticipated beginning or ending work in process inventory for either type of tire.                                  

The standard materials quantities for each type of fire were as follows:                              
                        Truck   Passenger
            Car Rubber      30lbs    10 lbs
            Steel belts        4 lbs     1.5 lbs

The purchase prices of rubber and steel were $2 and $3 per pound, respectively. The desired ending inventories for rubber and steel were 75,000 and 7,500 pounds respectively. The estimated beginning inventories for rubber and steel were 60,000 and 6,000 pounds, respectively.            

The direct labor hours required for each type of tire were as follows:                                  
                                                Molding Department                Finishing Department
Truck Tire                                            0.25                                                     0.15
Passenger car tire                    0.10                                         0.05

The direct labor rate for each department is as follows:                    
Molding department               $15 per hour
Finishing department              $13 per hour

Budgeted factory overhead costs for 2008 were as follows:                        
Indirect materials                                             198,500
Indirect labor                                                               213,200
Depreciation of building and equipment                    157,500
Power and light                                                122,900
Total                                                                            692,100

Required:                   
Prepare each of the following budgets for Glide for the year ended 2008:              
1. Sales budget                       
2. Production budget             
3. Direct material budget
4. Direct labor budget
5. Factory overhead budget
6. Cost of goods sold budget


P7-3 A listing of budgeted selling and administrative expenses for Glide Tire Company in P7-2 for the year ended December 31, 2008, were as follows:            
            Advertising expense                942,000
            Office rent expense                             125,000
            Office salaries expense           821,000
            Office supplies expense          45,500
            Officers' salaries expense        661,000
            Sales salaries expense                          868,000
            Telephone and fax expense     33,500
            Travel expense                                    443,000

Required:                   
Prepare a selling and administrative expenses budget, in good form, for the year 2008. 
Using the information above and the budgets prepared in P7-2, prepare a budgeted income statement for the year 2008, assuming an income tax rate of 40%.

P7-6 Flexible budget for factory overhead                
P7-6 Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month
 
Factory Overhead Cost Budget
Fixed cost:                 
Depreciation on building and machinery        1,200
Taxes on building and machinery       500    
Insurance on building and machinery 500    
Superintendent's salary                                    1,500
Supervisors' salaries                                         2,300
Maintenance wages                              1,000  7,000
 

Variable cost:             
Repairs                                                            400    
Maintenance supplies                                      300    
Other supplies                                      200    
Payroll taxes                                                    800    
Small tools                                           300      2,000
Total standard factory overhead                                  $9,000

Required:                   
1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90% and 110% of normal capacity.  Also determine the rate for application of factory overhead to work in process at each level of volume in both units and direct labor hours.

2. Prepare a flexible budget for production levels of 80%, 90% and 110%, assuming that variable costs will vary in direct proportion to the change in volume, but with the following exceptions. (Hint:  Set up a third category for semi fixed expenses).              
a. At 110% of capacity, an assistant department head will be needed at a salary of $10,500 annually.
b. At 80% of capacity, the repairs expense will drop to one-half of the amount at 100% capacity. 
c. Maintenance supplies expense will remain constant at all levels of production.              
d. At 80% of capacity, one part-time maintenance worker, earning $6,000 a year, will be laid off.
e. At 110% of capacity, a machine not normally in use and on which no depreciation is normally recorded will be used in production.  Its cost was $12,000, it has a ten-year life, and straight-line depreciation will be taken.

3. Using the facts and the flexible budget prepared in 1, determine the budgeted cost at 96% of capacity, using interpolation.

4. Using the flexible budget prepared in 1, determine the budgeted cost at 104% capacity, using a method other than interpolation.



SOLUTION PREVIEW
Problem 7-6
1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90% and 110% of normal capacity.  Also determine the rate for application of factory overhead to work in process at each level of volume in both units and direct labor hours.
Factory Overhead Cost Budget
Percent of normal capacity
80%
90%
110%
Number of units
 4,000
        4,500
  5,500
Number of standard direct labor hours
       16,000
    18,000
   22,000
Budgeted factory overhead:
 
 
 
  
Fixed cost:
 
 
 
 
 
Depreciation on building and machinery
 $1,200
 $1,200
 $ 1,200
 
 
Taxes on building and machinery
               500
               500
               500






File name: Week-7-7-2-7-3-7-6.xls File type: application/vnd.ms-excel Price: $20