Lovensena, choose Check for Updates 413 fx D CHAPTER 22 REVIEW Front Range Furniture Flexible Budget Performance Report Sales in Units CHAPTER 23 REVIEW Meie Bunt per Unit Budget Actu 20.000 21000 21,000 Fare UniM 0 31.50 0 F 0 0 0 Sales in Dollars Variable costs Direct materials Direct labor Variable owerhed Variabile operating expenses Total Variable costs Contribution Man Fixed costs Overeed Operatings Totalents income from Operation O 0 O 0 Neutral 2 (A) Cash Collections May cash sales 4 50% of April credit sales 5. Sok of March credit sales 6 Total cash collections from customers $ 7 (B) Cash Payments ADX of May purchases 10 OK of April purchases 11 Total cash payments for purchases 12 13 14 Front Range Furniture 15 Cash Budget 16 For the month of May 17 Beginning cash borce 1 Cash reciepts from sales 19 Total 20 Cash Disbursements 21 Payments for merchandise S 22 Payroll 21 Advertising 24 Rent 25 Ince 26 Total cash disbursements 27 Preliminary cash balance 2 La repayment 29 Cash balance, ending 30 Loans balance, end of the month 11 32 31 34 15 0 0 O 0 $ 0 $ Amount Favorabile vs. Unele Selected Variance Analysis Variable Cost Variance Fred Gost Variance Total Cost Variance Sales Rene Varange 5 $ Analysis Insert your way here. You may expand this text box mended 5 Front Range Furniture is preparing a Cash Budget for the second quarter of the coming year. Management would like to give you additional exposure to budgeting during your internship and has assigned you the task of preparing this Cash Budget. You will present this to your accounting supervisor for review. The following data has been forecasted: April May $150,000 $157,000 107,000 112,400 I Sales Merchandise Purchases Operating Expenses Payroll Advertising Rent Depreciation End of April balances 13,600 5,400 2,500 7,500 14,280 5,700 2,500 7,500 Bank loan payable 26,000 Additional data: A. Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. B. Purchases are all on credit, with 40% paid in the month of purchase; the balance is paid in the following month. C. Operating expenses are paid in the month they are incurred. D. A minimum cash balance of $25,000 is required at the end of each month. E. Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available. Required: 1. Prepare the company's cash budget for May on the next page. Show the ending loan balance on May 1. After accurate completion of the Cash Budget for the month of May, your supervisor wants to see how much you remember about Flexible Budgets and Variance Analysis from your introductory accounting principles course. Management of Front Range Furniture wants to begin using flexible budgets in the hopes of better planning for future operations. Your next task assigned is to create a flexible budget from the information below with a basic variance analysis. This will require review and approval before sending on to the company controller. Front Range Furniture provides the following Fixed Budget data for the year: $630,000 Sales 20,000 units; $31.50 per unit) Cost of sale: Direct materials Direct labor Variable overhead Fixed overhead Gross Profit Operating expense: Fixed Variable Income from operations $210,000 168,000 63,000 80.000 521.000 $ 109,000 $12,000 40.000 52.000 $57.000 $651,000 The company's actual activity for the year follows: Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead Gross Profit Operating expense: Fixed Variable Income from operations $231,000 168,000 73.500 77,500 550.000 $101,000 $12,000 39,500 51.500 $49.500 Required: 2. Prepare a flexible budget performance report for the year using the contribution margin format on the appropriate tab of your working papers. You will be "flexing" the budget to a sales level of 21,000. Be sure to complete all columns provided. Be sure to answer the questions below the chart in your working papers. Submit Part Ill of the project