i need help with the two questions belowtwo questions 6-33 Budgeted income statement & 7-17 Flexible Budget.

Please answer and show all steps. I want to fully understand.

Questions:6-33Budgeted income statement & 7-17Flexible Budget.

Week 8 1) 6-33 Budgeted income statement. (CMA, adapted) Smart Video Company is a manufacturer of videoconferencing products. Maintaining the videoconferencing equipment is an important area of customer satisfaction. A recent downturn in the computer industry has caused the videoconferencing equipment segment to suffer, leading to a decline in Smart Video's financial performance. The following income statement shows results for 2014: Smart Video Company Income Statement for the Year Ended December 31, 2014 (in thousands) Revenues Equipment Maintenance Contracts Total Revenues Cost of goods sold Gross margin Operating Costs Marketing Distribution Customer maintenance Administration Total operating costs Operating income $800 1,900 $9,900 4,000 $5,900 630 100 1100 920 2750 3,150 Smart Video's management team is preparing the 2015 budget and is studying the following information: 1. Selling prices of equipment are expected to increase by 10% as the economic recovery begins. The selling price of each maintenance contract is expected to remain unchanged from 2014. 2. Equipment sales in units are expected to increase by 6%, with a corresponding 6% growth in units of maintenance contracts. 3. Cost of each unit sold is expected to increase by 5% to pay for the necessary technology and quality improvements. 4. Marketing costs are expected to increase by $290,000, but administration costs are expected to remain at 2014 levels. 5. Distribution costs vary in proportion to the number of units of equipment sold. 6. Two maintenance technicians are to be hired at a total cost of $160,000, which covers wages and related travel costs. The objective is to improve customer service and shorten response time 7. There is no beginning or ending inventory of equipment. 8. Prepare a budgeted income statement for the year ending December 31, 2015. 9. How well does the budget align with Smart Video's strategy? 10. How does preparing the budget help Smart Video's management team better manage the company? 2) 7-17 Flexible Budget. Connor Company's budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attach case are $40, $8, and $12, respectively. The president is pleased with the following performance report: Direct materials Direct manufacturing labor Direct marketing (distribution labor) Actual Costs $364,000 78,000 100,00 Static Budget $400,000 80,000 120,000 Variance $36,000 F 2,000 F 10,000 F Actual output was 8,800 attach cases. Assume all three direct-cost items shown are variable costs. Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget. 3) 8-39 Review of Chapters 7 and 8, 3-variance analysis. (CPA, adapted) The Brown Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2014, Beal adopted the following standards for its manufacturing costs: Direct materials Direct manufacturing labor Manufacturing overhead: Variable Fixed Standard manufacturing cost per put unit Input 5 lb. at $4 per lb 4 hrs. at $16 per hr. Cost per Output Unit $20.00 64.00 $8 per DLH $9 per DLH 32.00 36.00 $152.00 The denominator level for total manufacturing overhead per month in 2014 is 37,000 direct manufacturing labor-hours. Beal's flexible budget for January 2014 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 40,300 lb. at $3.80 per lb. 37,300 lb. 31,400 hrs. at $16.25 per hr. $650,000 7,600 output units Required 1. Prepare a schedule of total standard manufacturing costs for the 7,600 output units in January 2014. 2. For the month of January 2014, compute the following variances, indicating whether each is favorable (F) or unfavorable (U): a. Direct materials price variance, based on purchases b. Direct materials efficiency variance c. d. e. f. g. Direct manufacturing labor price variance Direct manufacturing labor efficiency variance Total manufacturing overhead spending variance Variable manufacturing overhead efficiency variance Production-volume variance 4) 9-22 Absorption versus variable costing. Regina Company manufacturers a professionalgrade vacuum cleaner and began operations in 2014. For 2014, Regina budgeted to produce and sell 20,000 units. The company had no price, spending, or efficiency variances and writes off production-volume variance to cost of goods sold. Actual data for 2014 are given as follows: 1. 2. 3. 4. Required Prepare a 2014 income statement for Regina Company using variable costing. Prepare a 2014 income statement for Regina Company using absorption costing. Explain the differences in operating incomes obtained in requirements 1 and 2. Regina's management is considering implementing a bonus for the supervisors based on gross margin under absorption costing. What incentives will this bonus plan create for the supervisors? What modifications could Regina management make to improve such a plan? Explain briefly. 5) 12-22 Strategy, balanced scorecard. Stanmore Corporation makes a special-purpose machine, D4H, used in the textile industry. Stanmore has designed the D4H machine for 2013 to be distinct from its competitors. It has been generally regarded as a superior machine. Stanmore presents the following data for 2012 and 2013. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Units of D4H produced and sold Selling price Direct materials (kilograms) Direct material cost per kilogram Manufacturing capacity in units of D4H Total conversion costs Conversion cost per unit of capacity (row 6 row 5) Selling and customer-service capacity Total selling and customer-service costs Selling and customer-service capacity cost per customer (row 9 , row 8) 2012 200 $40,000 300,000 $8 250 2,000,000 $8,000 100 customers $1,000,000 2013 210 $42,000 310,000 $8.50 250 2,025,000 $8,100 95 customers $940,500 $10,000 $9,900 Stanmore produces no defective machines, but it wants to reduce direct materials usage per D4H machine in 2013. Conversion costs in each year depend on production capacity defined in terms of D4H units that can be produced, not the actual units produced. Selling and customer-service costs depend on the number of customers that Stanmore can support, not the actual number of customers it serves. Stanmore has 75customers in 2012 and 80 customers in 2013. Required 1. Is Stanmore's strategy one of product differentiation or cost leadership? Explain briefly. 2. Describe briefly key measures that you would include in Stanmore's balanced scorecard and the rea-sons for doing so