Part 7 (10 points): The table below contains the master budget (of making 100 units) and actual information (of making 150 units) for the month of May for Thompson Company. Required: Fill in the blanks in column (3) to prepare a flexible budget when 150 units were actually produced Fill in the blanks in columns (2) and (4) to prepare spending variances and volume variances. (1) (2) (5) Actual Costs (150 units) Spending Variance (3) Flexible Budget (150 units) $10,500 Volume Variance Master Budget (100 units) (5,000) or 5,000 U (3,500) or 3,500U Direct materials Direct labor $7,000 11,000 Variable overhead Fixed overhead Total mfg. costs $15,500 14,200 6,300 10,000 $46,000 4,000 10,000 $32,000 Part 8 (10 points): Carson Company has the following information available for the last year: Net Operating Income Average Invested Assets Hurdle Rate 500,000 | 1,000,000 8% 1. Calculate return on investment (ROI) for the last year. ROI = 2. Calculate residual income for the last year. Residual Income = Part 5 (10 points): The budgeted sales revenues of Capstone, Inc. for the coming year are listed on line a. It is expected that 30% of the total sales will be paid in cash during the same quarter of sales and 70% of total sales will be credit sales. Capstone, Inc. expects to collect 50% of the credit sales in the same quarter and the remaining 50% of credit sales in the next quarter. The beginning balance of accounts receivable is $10,000 (i.e., the remaining credit sales from the last quarter of the previous year to be collected). Fill in the gray area to complete the schedule of cash collections for Capstone, Inc. Quarter 1 Quarter 2 Quarter 3 Quarter 4 a. Budgeted sales revenue $25,000 $50,000 $75,000 $100,000 $7,500 $17,500 b. Cash sales of the current quarter (30% of current quarter's budgeted sales revenue c. Credit sales (70% of current quarter's budgeted sales revenue) d. Collected in the current quarter (50% of current quarter's credit sales) e. Cash collected in the current quarter from sales made in the previous quarter f. Budgeted cash collections $8,750 $10,000 $26,250 Part 6 (10 points): The raw materials purchases of Capstone, Inc. for the coming year are listed on line a. It is expected that 40% of the raw materials purchases will be paid in the same quarter of purchase and the remaining 60% will be paid in the following quarter. The beginning balance of accounts payable is $3,000 (i.e., the remaining unpaid purchase from the last quarter of the previous year). Fill in the gray area to complete the schedule of cash payments for raw materials purchases of Capstone, Inc. Quarter 1 Quarter 2 Quarter 3 Quarter 4 a. Raw materials purchases $6,000 $8,000 $12,000 $20,000 $2,400 b. 40% paid for in the same quarter of purchase c. 60% paid in the following quarter d. Cash paid for raw materials $3,000 $5,400
