1. Prepare next year's annual budget for the quality assurance (QA) department given the following assumptions. Cost category 2019 Planning assumption basis 2019 Planning rate Salary & Wages Use the midpoint of the salary band for all job classifications All salaried employees will receive a 3 % increase over the standard job classification rate. (No hourly salary increase) Salary & Wages 3 % Employee Bene Percent of wages and salaries 50% Employee Overtime Time and a half of hourly wage: OT is planned at 4% of the total hours 4 % of hourly hours. worked (assume 2,000 work hours per employee) worked 5 % inflation Inflation 5% No changes Depreciation Plant Facilities Square feet occupied Shared service rate Shared service rate One phone per SG&A person Telecommunications Shared service rate One phone per production department Telecommunications Shared service rate PC workstation One PC per SG&A person Shared service rat PC workstation One PC per production department 80,000-100,000 1 QA Department Manager 55,000-65,000 40,000-50,000 $10.00-$15.00 QA Supervisor Senior QA analyst 2 S H Inspectors Yearly Shared Service Cost Quantity Shared Service Basis Support Desktop $9,000 per PC $900 per telephone $35 per square foot $15 per square foot 600 PC's Support Desktop Support Telecommunications Office facilities Manufacturing facilities 500 Telephones Square ft Square ft 10,000 sq ft 40,000 sq ft 1 |Pa Assume this is the first vear that the company is to implement a charge for shared services Assume 2,000 available work hours per employee per year. Assume inflation impacts QA consumables. Assume a planned production level of 15,000 units for 2019 Assume the QA inspector is at 100 % capacity when producing 1,250 units per month. a) Complete the 2019 budget column in the following chart: Budget Budget Actual Expended 2019 2018 Projected 2018 General Ledger Acct Department Quality Assurance $310,000 $312.000 Salary & Wages 155,000 156,000 Employee Benefits 5,000 4,800 Overtime 3,750 4,000 QA consumables 3,000 3,000 Depreciation Facilities (100 sq ft) Telecommunications PC $476,750 $479,800 Total HR b) During January 2019, the actual results were as follows. Assume the actual production was 1,500 units. Prepare a January flexible budget with variances. Actual Flexed Budget Flex Budget Expended Variance Department General Ledger Acct Jan-19 Jan-19 Jan-19 Jan-19 Quality Assurance Salary & Wages $29,000 $27,295 Employee Benefits 15,000 13,648 Overtime 400 375 QA consumables 400 350 Depreciation 250 250 Facilities (100 sq ft) 125 125 Telecommunications 75 75 PC 750 750 Total QA $46,000 $42,868 2| Page 1. Prepare next year's annual budget for the quality assurance (QA) department given the following assumptions. Cost category 2019 Planning assumption basis 2019 Planning rate Salary & Wages Use the midpoint of the salary band for all job classifications All salaried employees will receive a 3 % increase over the standard job classification rate. (No hourly salary increase) Salary & Wages 3 % Employee Bene Percent of wages and salaries 50% Employee Overtime Time and a half of hourly wage: OT is planned at 4% of the total hours 4 % of hourly hours. worked (assume 2,000 work hours per employee) worked 5 % inflation Inflation 5% No changes Depreciation Plant Facilities Square feet occupied Shared service rate Shared service rate One phone per SG&A person Telecommunications Shared service rate One phone per production department Telecommunications Shared service rate PC workstation One PC per SG&A person Shared service rat PC workstation One PC per production department 80,000-100,000 1 QA Department Manager 55,000-65,000 40,000-50,000 $10.00-$15.00 QA Supervisor Senior QA analyst 2 S H Inspectors Yearly Shared Service Cost Quantity Shared Service Basis Support Desktop $9,000 per PC $900 per telephone $35 per square foot $15 per square foot 600 PC's Support Desktop Support Telecommunications Office facilities Manufacturing facilities 500 Telephones Square ft Square ft 10,000 sq ft 40,000 sq ft 1 |Pa Assume this is the first vear that the company is to implement a charge for shared services Assume 2,000 available work hours per employee per year. Assume inflation impacts QA consumables. Assume a planned production level of 15,000 units for 2019 Assume the QA inspector is at 100 % capacity when producing 1,250 units per month. a) Complete the 2019 budget column in the following chart: Budget Budget Actual Expended 2019 2018 Projected 2018 General Ledger Acct Department Quality Assurance $310,000 $312.000 Salary & Wages 155,000 156,000 Employee Benefits 5,000 4,800 Overtime 3,750 4,000 QA consumables 3,000 3,000 Depreciation Facilities (100 sq ft) Telecommunications PC $476,750 $479,800 Total HR b) During January 2019, the actual results were as follows. Assume the actual production was 1,500 units. Prepare a January flexible budget with variances. Actual Flexed Budget Flex Budget Expended Variance Department General Ledger Acct Jan-19 Jan-19 Jan-19 Jan-19 Quality Assurance Salary & Wages $29,000 $27,295 Employee Benefits 15,000 13,648 Overtime 400 375 QA consumables 400 350 Depreciation 250 250 Facilities (100 sq ft) 125 125 Telecommunications 75 75 PC 750 750 Total QA $46,000 $42,868 2| Page