Question 1: Hunter Corp. requires a minimum $20,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). If the ending cash balance exceeds the minimum, the excess will be applied to repaying any outstanding loan balance. The cash balance on April 1 was $20,000. Cash receipts other than for loans received for April, May, and June are forecasted at $58,000, $105,000, and $112,000, respectively. Payments other than loan or interest payments for the same period are planned at $70,000, $101,000, and $105,000, respectively. at June 1, there were no outstanding loans.

Prepare a cash budget for April, May, and June. You can round up your numbers to whole numbers in calculations.

Question 2: The following information describes the actual production activities of Cheers Corp.:

Raw materials used	8,100 lbs. at $2.50 per lb.
Factory payroll	2,225 hours for a total of $27,812.50 ($12.50 per hour)

8,000 units were completed during the year

Budgeted standards for each unit produced:

1 lb. of raw material at $2.60 per lb.

15 minutes (0.25) of direct labor at $12.75 per hour

Compute the direct material price and quantity and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.