Please start with requirement 8.

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 Trenton'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. 11. Calculate Trenton's profit margin ratio for 2019. Interpret your results. 12. Calculate Trenton's asset turnover ratio for 2019. Interpret your results. 13. Use the expanded ROI formula to confirm your results from Requirement 10. Interpret your results. 14. Trenton's management has specified a 20% target rate of return. Calculate Trenton's RI for 2019. Interpret your results. Requirement 7. During 2019, Trenton 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. We will start with the direct materials. Select the formula to calculate direct materials cost and efficiency variances, then enter the variance amounts. (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH favorable (F) or unfavorable (U).) Direct materials cost variance Direct materials efficiency variance Formula (AC-SC) AQ (AQ - SQ) SC Variance = $ 24,700 U = $ 300 F Select the formula to calculate direct labor cost and efficiency variances, then enter the variance amounts. (Label each variance as favorable (F) or unfavorable (U).) Direct labor cost variance Formula (AC-SC) AQ (AQ - SQ) SC $ Variance 208 U 700 F Direct labor efficiency variance $ Requirement 8. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. We will start with the variable overhead (VOH). Select the formula to calculate VOH cost and efficiency variances, then enter the variance amounts. (Label each variance as favorable (F) or unfavorable (U).) Formula Variance VOH cost variance VOH efficiency variance Requirement 7. During 2019, Trenton 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. We will start with the direct materials. Select favorable (F) or unfavorable (U).) and efficiency variances, then enter the variance (AC-SC) AQ ariance 4,700 U = Direct materials cost variance Direct materials efficiency variance Select the formula to calculate direct labor (AC-SC) SQ 300F (AQ - SQ) *A x AC ariance amounts. (Label each variance as favorab (AQ - SQ) SC ariance 208 U 700 F Actual FOH - Allocated FOH Direct labor cost variance Direct labor efficiency variance Requirement 8. For manufacturing overhe We will start with the variable overhead (VC Actual FOH - Budgeted FOH fficiency variances and the fixed overhead cost an and efficiency variances, then enter the variance a Variance Bugeted FOH - Allocated FOH VOH cost variance VOH efficiency variance Data Table Standard Cost Information Quantity Direct materials 7 pounds per set Direct labor 0.30 hours per set Variable manufacturing overhead 0.30 hours per set Fixed manufacturing overhead Static budget amount: $41,280 0.30 hours per set Cost $1 per pound $14 per hour $14 per hour $23.80 per hour Data Table 74,100 Actual Cost Information Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (49,400 pounds @ $1.50 per pound) $ (2,080 hours @ $14.10 per hour) (2,080 hours @ $13.60 per hour) 29,328 28,288 39,180 - Data Table 76,150 Trenton Toy Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 15,000 Accounts Receivable 55,000 Raw Materials Inventory 1,050 Finished Goods Inventory 5,100 Total Current Assets $ Property, Plant, and Equipment: Equipment 206,000 Less: Accumulated Depreciation (39,000) Total Assets $ Liabilities Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par $ 130,000 Retained Earnings 96,150 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 167,000 243,150 17,000 226,150 243,150 (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 1,300 sets for the first quarter and expected to increase by 200 sets per quarter. Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account. Sets are budgeted to sell for $70 per set. b. Finished Goods Inventory on December 31, 2018, consists of 150 sets at $34 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected to be 2,100 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 1,050 pounds. Direct materials requirement is 7 pounds per set. The cost is 1 per pound. e. 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 1,050 pounds; indirect materials are insignificant and not considered for budgeting purposes. f. Each set requires 0.30 hours of direct labor, direct labor costs average 14 per hour. g. Variable manufacturing overhead is $4.20 per set. h. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $7,820 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $1,800 per quarter for rent: $1,500 per quarter for insurance; and $1,000 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 3% of sales. k. Capital expenditures include $30,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. 1. Cash receipts for sales on account are 50% in the quarter of the sale and 50% 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. o. Income tax expense is projected at $2,500 per quarter and is paid in the quarter incurred. p. Trenton desires to maintain a minimum cash balance of $30,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at beginning of the quarter when excess funds are available and in increments of $1,000; interest is 5% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Data Table 497,000 162,802 334,198 Trenton Toy Company Income Statement For the Year Ended December 31, 2019 Net Sales Revenue Cost of Goods Sold: Variable $ 123,622 Fixed 39,180 Gross Profit Selling and Administrative Expenses: Variable 14,910 Fixed 51,200 Operating Income Other Income and (Expenses): Interest Expense Income Before Income Taxes Income Tax Expense Net Income 66, 110 268,088 (300) 267,788 15,000 $ 252,788 - Data Table Variable Fixed Total 41,280 $ Static budget Flexible budget $ 97,570 $ 122,372 138,850 163,652 41,280 Data Table Standard Cost Information Quantity Direct materials 7 pounds per set Direct labor 0.30 hours per set Variable manufacturing overhead 0.30 hours per set Fixed manufacturing overhead Static budget amount: $41,280 0.30 hours per set Cost $1 per pound $14 per hour $14 per hour $23.80 per hour Data Table 74,100 Actual Cost Information Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (49,400 pounds @ $1.50 per pound) $ (2,080 hours @ $14.10 per hour) (2,080 hours @ $13.60 per hour) 29,328 28,288 39,180 Requirement 7. During 2019, Trenton 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. We will start with the direct materials. Select favorable (F) or unfavorable (U).) and efficiency variances, then enter the variance (AC-SC) AQ ariance 4,700 U = Direct materials cost variance Direct materials efficiency variance Select the formula to calculate direct labor (AC-SC) SQ 300F (AQ - SQ) *A x AC ariance amounts. (Label each variance as favorab (AQ - SQ) SC ariance 208 U 700 F Actual FOH - Allocated FOH Direct labor cost variance Direct labor efficiency variance Requirement 8. For manufacturing overhe We will start with the variable overhead (VC Actual FOH - Budgeted FOH fficiency variances and the fixed overhead cost an and efficiency variances, then enter the variance a Variance Bugeted FOH - Allocated FOH VOH cost variance VOH efficiency variance Data Table 497,000 162,802 334,198 Trenton Toy Company Income Statement For the Year Ended December 31, 2019 Net Sales Revenue Cost of Goods Sold: Variable $ 123,622 Fixed 39,180 Gross Profit Selling and Administrative Expenses: Variable 14,910 Fixed 51,200 Operating Income Other Income and (Expenses): Interest Expense Income Before Income Taxes Income Tax Expense Net Income 66, 110 268,088 (300) 267,788 15,000 $ 252,788 (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 1,300 sets for the first quarter and expected to increase by 200 sets per quarter. Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account. Sets are budgeted to sell for $70 per set. b. Finished Goods Inventory on December 31, 2018, consists of 150 sets at $34 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected to be 2,100 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 1,050 pounds. Direct materials requirement is 7 pounds per set. The cost is 1 per pound. e. 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 1,050 pounds; indirect materials are insignificant and not considered for budgeting purposes. f. Each set requires 0.30 hours of direct labor, direct labor costs average 14 per hour. g. Variable manufacturing overhead is $4.20 per set. h. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $7,820 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $1,800 per quarter for rent: $1,500 per quarter for insurance; and $1,000 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 3% of sales. k. Capital expenditures include $30,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. 1. Cash receipts for sales on account are 50% in the quarter of the sale and 50% 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. o. Income tax expense is projected at $2,500 per quarter and is paid in the quarter incurred. p. Trenton desires to maintain a minimum cash balance of $30,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at beginning of the quarter when excess funds are available and in increments of $1,000; interest is 5% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. - Data Table Variable Fixed Total 41,280 $ Static budget Flexible budget $ 97,570 $ 122,372 138,850 163,652 41,280 Requirement 7. During 2019, Trenton 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. We will start with the direct materials. Select the formula to calculate direct materials cost and efficiency variances, then enter the variance amounts. (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH favorable (F) or unfavorable (U).) Direct materials cost variance Direct materials efficiency variance Formula (AC-SC) AQ (AQ - SQ) SC Variance = $ 24,700 U = $ 300 F Select the formula to calculate direct labor cost and efficiency variances, then enter the variance amounts. (Label each variance as favorable (F) or unfavorable (U).) Direct labor cost variance Formula (AC-SC) AQ (AQ - SQ) SC $ Variance 208 U 700 F Direct labor efficiency variance $ Requirement 8. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. We will start with the variable overhead (VOH). Select the formula to calculate VOH cost and efficiency variances, then enter the variance amounts. (Label each variance as favorable (F) or unfavorable (U).) Formula Variance VOH cost variance VOH efficiency variance Cash Receipts from Customers Total sales First Second Third Fourth Quarter Quarter Quarter Quarter Total $ 91.000 $ 105,000 $ 119,000 S 133,000 S 448,000 First Second Third Fourth Quarter Quarter Quarter Quarter Total $ 55,000 36,400 27,300 Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 1st Qtr.-Cash sales 1st Qtr.Credit sales, collection of Otr. 1 sales in Qtr. 1 1st Qtr. Credit sales, collection of Qtr. 1 sales in Qtr. 2 2nd Qtr.-Cash sales 2nd Qtr.Credit sales, collection of Otr. 2 sales in Qtr. 2 2nd Qtr.-Credit sales, collection of Otr. 2 sales in Qtr. 3 3rd Q.-Cash sales 3rd Qtr.-Credit sales, collection of otr. 3 sales in Qtr. 3 3rd Qtr-Credit sales, collection of Otr. 3 sales in Qtr. 4 4th Qtr.-Cash sales 4th Qtr.-Credit sales, collection of Qtr. 4 sales in Qtr. 4 $ 27,300 42,000 31,500 $ 31,500 47,600 35,700 $ 35,700 53.200 39.900 $ 118,700 $ 100,800 $ 114,800 $ 128,800 $ 463,100 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 39,900 Cash Payments First Second Third Fourth Quarter $ 13,398 $ Total Total direct materials purchases 48.160 Quarter Quarter Quarter $ 11,242 $ 11,060 $ 12,460 First Second Third Quarter Quarter Quarter Fourth Quarter Total $ 17.000 10.118 $ 1.124 Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qtr.-Qtr. 1 direct material purchases paid in Qtr. 1 1 st Atr. Qtr. 1 direct material purchases paid in Qtr. 2 2nd Qtr.-Qlr. 2 direct material purchases paid in Qtr. 2 2nd Qtr.-Qtr. 2 direct material purchases paid in otr. 3 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 3 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 4 4th Qtr-tr. 4 direct material purchases paid in Qtr. 4 Total payments for direct materials 9,954 $ 1,106 11,214 $ 1.246 12,058 13,304 | s 27.118 11,078 12,320 63,820 Direct Labor: Total payments for direct labor 6,720 6,552 7,392 8,232 28,896 Manufacturing Overhead: Variable manufacturing overhead Utilities, insurance, property taxes 6,552 8,232 28,896 6,720 7,820 7,392 7.820 7,820 7,820 31,280 7.820 7.820 7,820 7,820 31,280 Utilities, insurance, property taxes Total payments for manufacturing overhead 14,540 14,372 15,212 16,052 60,176 8,500 8,500 8,500 34,000 Selling and Administrative Expenses: Salaries Expense Rent Expense Insurance Expense Supplies Expense Total payments for Selling and Admin. expenses 8,500 1.800 1,500 1,800 1.800 1,500 3.150 1,500 3,570 1,800 1,500 3,990 7,200 6,000 13,440 2.730 14,530 14,950 15,370 15,790 60,640 Income Taxes: Total payments for income taxes 2,500 2,500 2,500 2,500 10,000 Capital Expenditures: 30,000 Total payments for capital expenditures 30,000 $ Total cash payments (before interest) 95,408 49.452 $ 52,794 $ 55,878 $ 253,532 Accounts Payable balance, December 31, 2019: 4th Qtr. tr. 4 direct material purchases paid in Qtr. 1 of 2020 1,340 Prepare the cash budget. (Complete all input fields. Enter a "o" for any zero balances. Round all amounts entered into the cash budget Review the cash recebeu pared above Review the cash payments today spared above Trenton Toy Company Cash Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Beginning cash balance 5 15,000$ 38,292$ 89,640 $ 151,548 $ 15,000 118,700 100,800 114,800 Cash receipts 128,800 483,100 Cash available 133,700 139,092 204,440 280.446 478,100 Cash payments Capital expenditures 30,000 0 0 0 30,000 Purchases of direct materials 27.118 11,078 12,320 13,304 83,820 Direct labor 6,720 6,552 7,392 8.232 28,896 Manufacturing overhead 14,540 14,372 15,212 16,062 80,178 Selling and administrative expenses 14,530 14,950 15,370 15.790 50,640 Income taxes 2,500 2,500 2,500 2,500 10,000 0 Interest expense 95,400 49,452 52,714 55,878 253,532 Total cash payments Ending cash balance before financing 38,292 89,640 151,646 224,568 224,568 Minimum cash balance desired (30,000 (30,000 (30,000 (30.000) (30,000 Projected cash excess de ciency 8,212 59,640 121,546 194,568 194,56 Financing Borrowing Principal repayments Total effects of financing Ending cash balance $ 38,20289,640 151,646 224.566 224,568 Requirement 2. Prepare Trenton's annual Financial budget for 2019, induding budgeted income statement and budgeted balance sheet. Begin with the budgeted income statement (Complete all input fields. Enter a "o" for any zero balances) 0 Review the production budget you prepared above. Trenton Toy Company Direct Labor Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted sets to be produced 1,600 1,560 1,760 1,960 6.880 Direct labor hours per unit 0.30 0.30 0.30 0.30 0.30 Direct labor hours needed for production 480 468 528 588 2,064 14 14S $ 14 $ 14 $ Direct labor cost per hour 14 6,720 $ 6,552 | $ 7.392 S 8,232 $ 28.896 Budgeted direct labor cost Prepare the manufacturing overhead budget. (Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.) Review the production budget you prepared above. Review the direct labor budget you prepared above. Trenton Toy Company Budgeted Balance Sheet December 31, 2019 Assets Current Assets Cash $ 224,568 Accounts Receivable 39,900 Raw Materials inventory 1,050 Finished Goods Invertory 13,412 Total Current Assets $ 270,000 Property. Plant, and Equipment Equipment 296,000 183,000 Less Accumulated Depreciation 453,000 $ Total Assets 462,00 Liabilities Current Liais: Accounts Payable 1,340 Stockholders' Equity Common Stock, no par $ 130,000 Retained Eamingo 330,650 Total Stockholders' Equity 480,650 S 462,000 Total Liabilities and Stockholders' Equity 0 Trenton Toy Company Flexible Budget Performance Report For the Year Ended December 31, 2019 1 2 3 4 5 (1)-(3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Statie Per Unit Results Variance Budget Variance Budget Units 7,100 7.100 6,400 Net Sales Revenue $ $ 70.00 $ 497,000 $ 0 $ 497,000 $ 49,000 F $448.000 Variable Costs Product Costs 123,822 1,250 122,372 24,802 97,570 14,910 14,910 1,470 13440 Selling and Admin.Com Contribution Margin 358,468 1,250U 359,718 22,728 F 338,990 Fixed Cow Product Costs 39,180 2.100F 41,280 0 41,280 51,200 51.200 0 51200 Selling and Admin Cook Operating income $ 285,088 850 F S 287 238 $ 22,728 FS244,510 Requirement 4. What was the atfect on Trenton's operating income of seing 700 sets more than the static budget level of sales? Selling 700 units more than the state budget level of sales increased Trenton Toy company's operating income by $22,728 which is the favorable sales volume variance calculated in Requirements Requirement 5. What is Trenton's static budget variance for operating income? Trenton Toy Company's static budget variance is $ 23,578' favorable Requirement 8. Explain why the flexible budget perfomance report provides more useful information to Trenton's manager than the static budget performance report What insights can Trenton's managers draw from this performance report? The static budget is prepared for only one level of sales volume - the sets expected to be sold and it does not change after it is developed. The state budget variance is the difference between actual operating income based on actual units sold and expected operating income based on expected units sold. The flexible budget performance report(Requirement 3) provides more useful information than the simple static budget performance report because it separates the state budget variance into its components: the flexible budget variance and the sales volume variance Requirement 7. During 2019. Trenten recorded the following cost diata Click the icon to view the standard calda Click the icon to view the actual data.) Compute the cost and efficiency various for direct materials and direct labor We will start with the direct materials Select the formula to calculate direct materials cost and eficiency variances, then enter the variance amounts (Abbreviations used. AC = actual cost AD = actual quantity, FOH = fed overhead: SC standard cost; S = standard quantity. Label each variance as favorable (F) or unfavorable (UN) We will start with the direct materials Select the formula to calculate direct materials cost and efficiency variance, then enter the variance amounts (Abbreviations used: AC = actual coat AQ - actual quantity, FOH =Pad overhead: SC standard cost; SQ = standard quantity. Label each variance as favorable (F) or unfavorable (UN Fomu Variance Direct material col variance IAC -SC) AD = $ 24.700 Direct materials alcancy variance (AC-SC) SC 300 F Select the formula to calculate direct labor cost and efficiency variance, then enter the variance amounts. Labelcach variance as favorable (F) or unfavorable (U).) Formu Variance Direct labores variance (AC-SCAD 5 200U Direct labor aliciency variance (AQ-SG) SC 700 Requirements. For manufacturing overhead, compute the variable overhead coat and efficiency variances and the fixed overhead cost and volume variances. We will start with the variable overhead (VOH). Select the formula to calculate VOH cost and efficiency variances, then enter the variance amounts (Label each variance as favorable (F) or unfavorable (UN Forma Variance VOH covariance VOH ciency variance Choose from any ist or enter any number in the input fields and then click Check