Looking for assistance on the attached questions
Week 6 Graded Assignment Question #1: A company manufactures widgets. Based on an analysis, we find that each widget needs 3/4 pound of \"gunk.\" The following is information on the budgeted production of widgets in units for the following three months: Budgeted production July 21,000 August 20,000 September 24,000 We know that this company desires to maintain monthly ending inventories of \"gunk\" amounting to 25% of the following month's budgeted production needs. The cost per pound of \"gunk\" is $2.12. Instructions Prepare a direct materials purchases budget for the month of August. Question #2 The following is Howell Company's estimated cash flows for the third quarter: August September October Cash receipts $900,000 $1,000,000 $1,300,000 Cash disbursements 1,100,000 1,000,000 1,000,000 Quarter $3,200,000 3,100,000 Howell starts the year with $100,000 in cash and has a requirement of a minimum cash balance of $25,000. Howell may borrow any amount from a local financial institution at an annual interest rate of 3%, The borrowing must occur at the beginning of any month and all repayments must be made at the end of any month. Interest must be repaid at the time of loan repayment. Required: Prepare the company's cash budget for the upcoming year. Use good form! Note that there is a similar problem in the Tony Bell's folder in the Week 6 Media Links folder. Question #3 Stovall Company's management is trying to predict collections from customers for the months of October and November. Management estimates that credit sales for August, September, October, and November will be $270,000, $375,000, $420,000, and $240,000, respectively. Typically, the Company collects from its customers as follows: In month of sale In first month after sale In second month after sale 25% 60% 10% Instructions Prepare a schedule to determine the collections from customers in October and November. Be sure that you show your calculations. Question #4: (note that this question is similar to one of the Tony Bell problems posted in the Media Folder) It's Just Lunch is a match-making service for professionals. The company had the following income statement for June: It's Just Lunch, Inc. Income Statement (Actual versus Budget) For the Month Ended June 30 Budget Actual # of couples matched 120 150 Revenues $12,000 $14,500 Variable costs Hand Selected Matching Client screening Billing Total variable costs Fixed costs Office expenses Insurance expense Total fixed costs Total costs Net income Variance 30 F $2,500 F $3,000 $3,600 $600 U 2,400 1,200 6,600 1,500 1,450 6,550 900 F 250 U 50 F 2,000 900 2,900 9,500 $2,500 1,800 950 2,750 9,300 $5,200 200 F 50 U 150 F 200 F $2,700 F Ann Zimmerer, the manager commented on the report: \"June was an amazing month. We had more business than we expected and we still managed to keep costs down - it would be great if every month could be this good\". Required: a.) What is the major flaw in the report above. b.) Prepare a revised report using a flexible budget. c.) Comment on Zimmerer's assertion that it was an \"amazing month\". d.) Which variance(s) ought to be investigated further? Question #5: Hercules, Inc. reported the following information concerning the company's standard costing system for 2018: Standard Data Materials units Labor 10 lbs. @ $4 per lbs. Actual Data Produced 3 hrs. @ $21 per hr. 75,000 lbs. for $315,000 Budgeted fixed overhead $100,000 Materials used Budgeted variable overhead $30 per unit 16,500 hrs. costing $330,000 Budgeted production 5,000 units Actual overhead 6,000 Materials purchased 61,500 lbs. Labor worked $355,000 Instructions Calculate the labor price variance and the labor quantity variance. Note to use the formulas provided in the Week 6 Class Notes
