( please answer all the questions) The Trolley Trolley Toy Company manufactures toy building block sets for children. Trolley Trolley is planning for 2019 2019 by developing a master budget by quarters. Trolley Trolley's balance sheet for December December 31 31, 2018 2018, follows:

Trolley Toy Company Balance Sheet December 31, 2018 Assets Current Assets: Cash 58,000 Accounts Receivable 22,000 Raw Materials Inventory 1,200 5,400 Finished Goods Inventory Total Current Assets 86,600 Property, Plant, and Equipment Equipment 142,000 (47,000) 95,000 Less: Accumulated Depreciation 181,600 Total Assets Liabilities Current Liabilities: 8,000 Accounts Payable Stockholders' Equity Common Stock, no par 120,000 53,600 Retained Earnings 173,600 Total Stockholders' Equity 181,600 Total Liabilities and Stockholders' Equity (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,400 sets for the first quarter and expected to increase by 150 sets per quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% of sales on account. Sets are budgeted to sell for $90 per set. b. Finished Goods Inventory on December 31, 2018, consists of 200 sets at $27 each. Desired ending Finished Goods Inventory is 40% of the next quarter's sales, first quarter sales for 2020 are expected to be 2,000 sets. FIFO inventory costing method is used c. d. Raw Materials Inventory 3 pounds per set The cost is $2 per pound. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019, is 600 pounds, indirect materials are insignificant and not considered for budgeting purposes. December 31, 2018, consists of 600 pounds. Direct materials requirement is on e. $12 per hour f. Each set requires 0.30 hours of direct labor, direct labor costs aver g. Variable manufacturing overhead is $3.60 per set. h. Fixed manufacturing overhead includes $7,0000 per quarter in depreciation and $2,585 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $11,000 per quarter for salaries, $1,500 per quarter for rent, $1,350 per quarter for insurance; and $1,500 per quarter for depreciation. Variable selling and administrative expenses include supplies at 2% of sales j. k. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. Cash receipts for sales on account are 40% in the quarter of the sale and 60% in the quarter following the sale; Accounts Receivable balance on December 31, 2018, is expected to be received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. m. Direct materials purchases are paid 90% in the quarter purchased and 10 % in the following quarter Accounts Payable balance on December 31, 2018, is expected to be paid in the first quarter of 2019. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. o. Trolley desires to maintain a minimum cash balance of $55,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter, principal repayments are made at the beqinning of the quarter when excess funds are available and in increments of $1,000; interest is 10% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter p. 1. Prepare Trolley's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours (Round all calculations to the nearest dollar.) 2. Prepare Trolley's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet 3. Trolley sold 7,000 sets in 2019, and its actual operating income was as follows: (Click the icon to view the actual income statement) Prepare a flexible budget performance report through operating income for 2019. Show product costs separately from selling and administrative costs. To simplify the calculations due to sets in beginning inventory having a different cost than those produced and sold in 2019, assume the following product costs |(Click the icon to view the product costs.) 4. What was the effect on Trolley's operating income of selling 500 sets more than the static budget level of sales? 5. What is Trolley's static budget variance for operating income? 6. Explain why the flexible budget performance report provides more useful information to Trolley's managers than the static budget performance report. What insights can Trolley's managers draw from this performance report? 7. During 2019, Trolley recorded the following cost data: (Click the icon to view the standard cost data.) (Click the icon to view the actual cost data.) Compute the cost and efficiency variances for direct materials and direct labor. 8. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 9. Prepare the standard cost income statement for 2019. 10. Calculate Trolley's ROI for 2019. To calculate average total assets, use the December 31, 2018, balance sheet for the beginning balance and the budgeted balance sheet for December 31, 2019, for the ending balance. Round all of your answers to four decimal places. Trolley Toy Company Income Statement For the Year Ended December 31, 2019 Net Sales Revenue 630,000 Cost of Goods Sold: Variable 94,890 131,430 36,540 Fixed Gross Profit 498,570 Selling and Administrative Expenses: Variable 12,600 61,400 74,000 Fixed Operating Income 424,570 Other Income and (Expenses): (425) Interest Expense Income Before Income Taxes 424,145 22,000 Income Tax Expense 402,145 Net Income Trolley Toy Company Sales Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted sets to be sold 1,400 1,550 1,700 1,850 6,500 90 S 90 $ 90 $ 90 $ 90 Sales price per unit 126,000 $ 153,000 $ 166,500 S 139,500 S 585,000 Total sales Fixed Variable Total $ 84,240 $ Static budget 38,340 $ 122,580 Flexible budget 93,940 38,340 132,280 Standard Cost Information Quantity Cost Direct materials 2.00 per pound 3 pounds per set 12.00 per hour 0.30 hours per set Direct labor $ 12.00 per hour Variable manufacturing overhead 0.30 hours per set 0.30 hours per set Fixed manufacturing overhead $ 21.00 per hour Static budget amount: $38,340 Actual Cost Information 20,700 pounds $ Direct materials 2.50 per pound) 51,750 $ 12.40 per hour) Direct labor 2,060 hours 25,544 $ 11.60 per hour 2,060 hours Variable manufacturing overhead 23,896 Fixed manufacturing overhead 36,540 Cash Receipts from Customers First Second Third Fourth Quarter Quarter Quarter Quarter Total 126,000 139,500 153,000 $ 166,500 $ Total sales $ 585,000 First Second Third Fourth Quarter Quarter Quarter Quarter Total Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 22,000 $ 1st Qtr-Cash sales 37,800 1st Qtr.-Credit sales, collection of Qtr. 1 sales in Qtr. 1 35,280 1st Qtr.-Credit sales, collection of Qtr. 1 sales in Qtr. 2 52,920 2nd Qtr.-Cash sales 41,850 2nd Qtr-Credit sales, collection of Qtr. 2 sales in Qtr. 2 39,060 2nd Qtr-Credit sales, collection of Qtr. 2 sales in Qtr. 3 S 58,590 3rd Qtr.-Cash sales 45,900 3rd Qtr.-Credit sales, collection of Qtr. 3 sales in Qtr. 3 42,840 3rd Qtr.-Credit sales, collection of Qtr. 3 sales in Qtr. 4 64,260 4th Qtr.-Cash sales 49,950 4th Qtr.-Credit sales, collection of Qtr. 4 sales in Qtr. 4 46,620 95,080 133,830 147,330 160,830 $ 537,070 Total cash receipts from customers Accounts Receivable balance, December 31, 2019: 4th Qtr.-Credit sales, collection of Qtr. 4 sales in Qtr. 1 of 2020 69,930 Le Cash Payments First Second Third Fourth Quarter Quarter Quarter Quarter Total 9,750 S 10,650| S 10,686 $ 11,514 S Total direct materials purchases 42,600 First Second Third Fourth Quarter Quarter Quarter Quarter Total Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 8,000 1st Qtr-Qtr. 1 direct material purchases paid in Qtr. 1 9,617 1st Qtr-Qtr. 1 direct material purchases paid in Qtr. 2 1,069 2nd Qtr.-Qtr. 2 direct material purchases paid in Qtr. 2 8,775 2nd Qtr-Qtr. 2 direct material purchases paid in Qtr. 3 975 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 3 9,585 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 4 1,065 4th Qtr.-Qtr. 4 direct material purchases paid in Qtr. 4 10,363 9,844 10,560 11,428 S 49,449 17,617 Total payments for direct materials Direct Labor 6,336 6,876 Total payments for direct labor 6,552 5,796 25,560 Manufacturing Overhead: 6,336 6,876 Variable manufacturing overhead 6,552 5,796 25,560 2,585 Utilities, insurance, property taxes 2,585 2,585 2,585 10,340 9,461 Total payments for manufacturing overhead 9,137 8,381 8,921 35,900 Selling and Administrative Expenses: 11,000 11,000 Salaries Expense 44,000 11,000 11,000 1,500 1,500 Rent Expense 1,500 1,500 6,000 1,350 1,350 Insurance Expense 1,350 1,350 5,400 2,790 Supplies Expense 2,520 3,060 3,330 11,700 17,180 16,370 67,100 Total payments for Selling and Admin. expenses 16,640 16,910 Income Taxes: 3,500 Total payments for income taxes 3,500 3,500 3,500 14,000 Capital Expenditures 45,000 45,000 Total payments for capital expenditures 44,161 $ 46,227 $ 48,445 $ 237,009 98,176 Total cash payments (before interest) Accounts Payable balance, December 31, 2019: 4th Qtr-Qtr. 4 direct material purchases paid in Qtr. 1 of 2020 1,151 Cash Budget For the Year Ended December 31, 2019 First 4th Psl p Quarter Beginning cash balance Cash receipts Cash available Cash payments Capital expenditures Purchases of direct materials Direct labor Manufacturing overhead Selling and administrative expenses Income taxes Interest expense Total cash payments Ending cash balance before financing Minimum cash balance desired Projected cash excess (deciency) Financing: Borrowing Principal repayments