requirements:

Data table Data table 7. During 2025, Trevor recorded the following cost data below. Compute the cost and efficiency variances for direct materials and direct labor. given are stated as of December 31,2024 .) a. Budgeted sales are 1,500 sets for the first quarter and expected to increase by 200 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 31,2024 , consists of 100 sets at $35 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2026 are expected to be 2,300 sets. FIFO inventory costing method is used d. Raw Materials Inventory on December 31,2024 , consists of 400 pounds. Direct materials requirement is four 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 31,2025 , is 400 pounds; indirect materials are insignificant and not considered for budgeting purposes f. Each set requires 0.20 hours of direct labor, direct labor costs average 8 per hour g. Variable manufacturing overhead is $1.60 per set h. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $6,464 per quarter for other costs, such as utilities, insurance, and property taxes i. Fixed selling and administrative expenses include $8,000 per quarter for salaries; $5,100 per quarter for rent, $750 per quarter for insurance; and $1,500 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 receiots for sales on account are 50% in the auarter of the sale and 50% in the auarter following III (IClck the kce to vew the balance stoet) for Trevor Toy Compary (3) Jumevercun lo vow the obler data) Read the comurements: 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 2025 10. Calculate Trevor's ROI for 2025. To calculate average total assets, use the December 31,2024 , balance sheet for the beginning balance and the budgeted balance sheet for Vecember 31,2025 , for the ending balance. Round all of your answers to four decimal places. 11. Calculate Trevor's profit margin ratio for 2025 . Interpret your results. 12. Calculate Trevor's asset turnover ratio for 2025 Interpret your results. 13. Use the expanded ROI formula to confirm your results from Requirement 10. Interpret your results. 14. Trevor's management has specified a 30% target rate of return. Calculate Trevor's RI for 2025 Interpret your results Requirements 1. Prepare Trevor's operating budget and cash budget for 2025 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 Trevor's annual financial budget for 2025 , including budgeted income statement and budgeted balance sheet 3. Trevor sold 7,500 sets in 2025 , and its actual operating income was as follows: Income Statement For the Year Ended December 31, 2025 Net Sales Revenue $675,000 Cost of Goods Sold Variable Fixed Gross Profit Selling and Administrative Expenses Variable Fixed Operating Income Other Income and (Expenses) Interest Expense Income Before Income Taxes Income Tax Expense Net Income \$ 55,595 \begin{tabular}{r|r} 48,256 & 103,851 \\ \hline & 571,149 \end{tabular} \begin{tabular}{|rr} 20,250 & \\ 61,400 & 81,650 \\ \hline & 489,499 \end{tabular} Prepare a flexible budget performance report through operating income for 2025 . 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 2025, assume the following product costs: 4. What was the effect on Trevor's operating income of selling 300 sets more than the static budget level of sales? 5. What is Trevor's static budget variance for operating income? 6. Explain why the flexible budget performance report provides more useful information to Trevor's managers than the static budget performance report What insights can Trevor's managers draw from this performance report? 7. During 2025, Trevor recorded the following cost data below Compute the cost and efficiency variances for direct materials and direct labor Data table Data table 7. During 2025, Trevor recorded the following cost data below. Compute the cost and efficiency variances for direct materials and direct labor. given are stated as of December 31,2024 .) a. Budgeted sales are 1,500 sets for the first quarter and expected to increase by 200 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 31,2024 , consists of 100 sets at $35 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2026 are expected to be 2,300 sets. FIFO inventory costing method is used d. Raw Materials Inventory on December 31,2024 , consists of 400 pounds. Direct materials requirement is four 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 31,2025 , is 400 pounds; indirect materials are insignificant and not considered for budgeting purposes f. Each set requires 0.20 hours of direct labor, direct labor costs average 8 per hour g. Variable manufacturing overhead is $1.60 per set h. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $6,464 per quarter for other costs, such as utilities, insurance, and property taxes i. Fixed selling and administrative expenses include $8,000 per quarter for salaries; $5,100 per quarter for rent, $750 per quarter for insurance; and $1,500 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 receiots for sales on account are 50% in the auarter of the sale and 50% in the auarter following III (IClck the kce to vew the balance stoet) for Trevor Toy Compary (3) Jumevercun lo vow the obler data) Read the comurements: 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 2025 10. Calculate Trevor's ROI for 2025. To calculate average total assets, use the December 31,2024 , balance sheet for the beginning balance and the budgeted balance sheet for Vecember 31,2025 , for the ending balance. Round all of your answers to four decimal places. 11. Calculate Trevor's profit margin ratio for 2025 . Interpret your results. 12. Calculate Trevor's asset turnover ratio for 2025 Interpret your results. 13. Use the expanded ROI formula to confirm your results from Requirement 10. Interpret your results. 14. Trevor's management has specified a 30% target rate of return. Calculate Trevor's RI for 2025 Interpret your results Requirements 1. Prepare Trevor's operating budget and cash budget for 2025 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 Trevor's annual financial budget for 2025 , including budgeted income statement and budgeted balance sheet 3. Trevor sold 7,500 sets in 2025 , and its actual operating income was as follows: Income Statement For the Year Ended December 31, 2025 Net Sales Revenue $675,000 Cost of Goods Sold Variable Fixed Gross Profit Selling and Administrative Expenses Variable Fixed Operating Income Other Income and (Expenses) Interest Expense Income Before Income Taxes Income Tax Expense Net Income \$ 55,595 \begin{tabular}{r|r} 48,256 & 103,851 \\ \hline & 571,149 \end{tabular} \begin{tabular}{|rr} 20,250 & \\ 61,400 & 81,650 \\ \hline & 489,499 \end{tabular} Prepare a flexible budget performance report through operating income for 2025 . 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 2025, assume the following product costs: 4. What was the effect on Trevor's operating income of selling 300 sets more than the static budget level of sales? 5. What is Trevor's static budget variance for operating income? 6. Explain why the flexible budget performance report provides more useful information to Trevor's managers than the static budget performance report What insights can Trevor's managers draw from this performance report? 7. During 2025, Trevor recorded the following cost data below Compute the cost and efficiency variances for direct materials and direct labor