Question 25

The International Company makes and sells only one product, Product SW. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:

Variable Cost

Per Unit Sold

Monthly Fixed Cost

Sales Commissions

$0.70

Shipping

$1.10

Advertising

$0.20

$14,000

Executive Salaries

-

$34,000

Depreciation on Office Equipment

-

$11,000

Other

$0.25

$19,000

Bad debts-2% of credit sales

(Average monthly credit sales

$85,000 for the last half of the year)

All cash expensesare paid in the month for which they are incurred.Pay particular attention to non-cash fixed expenses.

a.

If the company has budgeted to sell 25,000 units of Product SW in July, what will

be the totalbudgeted selling and administrative expenses for July?

b.

If the company has budgeted to sell 20,000 units of Product SW in October, what will be thetotal budgeted variable selling and administrative expenses for October?

c.

If the budgeted cash disbursements for selling and administrative expenses for November total $123,250, then how many units of Product SW does the company plan to sell in November (rounded to the nearest whole unit)?

d.

If the company has budgeted to sell 25,000 units of Product SW in September,

what will be the total budgeted fixed selling and administrative expenses for September?

Question 26

The following labour standards have been established for a particular product:

Standard labour hours per unit of output

8.3 hours

Standard labour rate

$12.10 per hour

The following data pertain to operations concerning the product for the last month:

Actual hoursworked

6,100 hours

Actual total labour cost

$71,370

Actual output

900 units

1. What were the labourvariances for the month? Clearly indicate whether they were Favourable (F), or, Unfavourable (U)

Input:DLOutput:900units

STD:8.3 Hrs @ $12.10

AH xARAH xSRSH xSR

a. Overhead is applied on the basis of direct labour hours:

Standard labour hours per unit of output

8.3 hours

Standard variable overhead costs per hour

$2.10 per hour

Required: Determine the overhead variances

Input:MOH -VCOutput:900units

STD:8.3Hrs@ $2.10

AH xARAH xSRSH xSR

[7 marks]

Question 27

Needs Grading

The following materials standards have been established for a particular product:

Standard quantity per unit of output

8.5 grams

Standard price

$19.15 per gram

The following data pertain to operations concerning the product for the last month:

Actual materialspurchased

7,500 grams

Actual cost of materials purchased

$141,375

Actual materialsusedin production

7,100 grams

Actual output

700 units

What were the materials variances for the month? Clearly indicate whether they were Favourable(F), or Unfavourable (U)

[10 m..s@$19.15per gram

Input:DMOutput:700 units

AQ xAPAQ xSPSQxSQ