Problem 1(60 points) Complete the following budget using the attached schedules.

Problem 2 (10 points) Thefollowing information applies to Company A's materials cost. Actual Cost: 4,100 Ibs. @, $5.07 per Ib. = $20,787 Standard Cost: 4,000Ibs. @, $5.00 perIb. = $20,000 Direct Materials Cost Variance: $787 Calculate the price and quantity variance.

Problem 3(10 points) Company A is considering a potential investment. This investment requires a cash outflow of $25,000. The investment is expected to generate equalannual cash flows of $4,500. Calculate the payback period.

Problem 4(10 points) Company A is evaluating a potential investment. This investment requires a cash outflow of $18,000. The investment is expected to yield equal annual cash flows of $6,500 for 3 years. The Company requires a 10% rate of return. Calculate the net present value of the investment. Should the Company accept this investment opportunity?

Essay (10 points) Describe the four factors, which make capital budgeting decision to be so difficult and risky.

Problem 4(10 points) Data for Budget Company A is evaluating a potential investment. This investment requires a cash outflow Budgeted Sales of $18,000. The investment is expected to yield equal annual cash flows of $6,500 for 3 December (Actual) $75,000 years. The Company requires a 10% rate of return. Calculate the net present value of the January $55,000 investment. Should the Company accept this investment opportunity? February $80,000 March $35,000 April $60,000 Budgeted Expenses Wages and Salaries $5,000 Freight-out 5% Advertising $3,500 Depreciation $2,000 Other Expenses 1.50% Other Data Essay (10 points) Minimum Inventory % of Next Month's COGS 40% Describe the four factors, which make capital budgeting decision to be so difficult and $20,000 risky. Ending Inventory for Dec. Sales Mix: Cash 10% Credit 90% Note: Credit sales collected in the following month COGS 60% Inventory Paid: Current Month 50% Month After Purchase 50% Dec. Accounts Payable $3,000 Dec. Cash Balance $11,500 Minimum Cash Balance $10,000Schedule A: Sales Budget January February March Credit Sales Cash Sales Total Sales Schedule B: Cash Collections January February March Cash Sales Prior Collections Total Collections Schedule C: Purchases Budget January February March Desired Ending Inventory Cost of Goods Sold Total Needed Beginning Inventory Total Purchases Schedule D: Cash Disbursements for Purchases January February March For December For January For February For March Total DisbursementsSchedules E and F: Operating Expenses and Cash Disbursements January February March Cash Expenses: Salaries & Wages Freight-out Advertising Other Expenses Total Disbursements Noncash Expenses: Depreciation Total Expenses Cash Budget January February March Beginning Cash Balance Minimum Cash Balance Available Cash Balance Cash Receipts & Disbursements Collections from Customers Inventory Purchases Operating Expenses Net Cash Excess or (Deficiency) Financing: Borrowing Repayment Ending Cash Balance