The Trevor Toy Company manufactures toy building block sets for children. Trevor is planning for 2019 by developing a master budget by quarters. Trevor's balance sheet for December 31, 2018, follows:

More Into (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 1,500 sets for the first guarter and expected to increase by 50 sets per quarter. Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account Sets are budgeted to sell for $90 per set b. Finished Goods Inventory on December 31, 2018, consists of 550 sets at $35 each c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales, first quarter sales for 2020 are expected to be 1,700 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018 consists of 3,300 pounds. Direct materials requirement is 6 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 3.300 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 10 per hour g. Variable manufacturing overhead is $2.00 per set h. Fixed manufacturing overhead includes $4.500 per quarter in depreciation and $8,020 per quarter for other costs such as utilities, insurance, and property taxes Fixed selling and administrative expenses include $9.000 per quarter for salaries $5.700 per quarter for rent $600 per quarter for insurance and $1.000 per quarter for depreciation i. Print Done > More Info i. Fixed selling and administrative expenses include $9,000 per quarter for salaries. $5.700 per quarter for rent: $600 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 $20,000 for new manufacturing equipment to be purchased and paid for in the first quarter 1. Cash receipts for sales on account are 60% in the quarter of the sale and 40% 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 70% in the quarter purchased and 30% 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 $4.500 per quarter and is paid in the quarter incurred p. Trevor desires to maintain a minimum cash balance of $60,000 and borrows from the local bankas needed in increments of $1,000 at the beginning of the quarter, principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1.000 interest is 12% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Print Done 30 Trevor Toy Company Balance Sheet December 31, 2018 Assets Current Assets Cash S 60,000 Accounts Receivable 18,000 Raw Materials Inventory 3.300 Finished Goods Inventory 19,250 Total Current Assets $ 100.550 Property Plant and Equipment Equipment Less Accumulated Depreciation 188.000 (39,000) 149.000 Data Table Total Current Assets $ 100.550 Property, Plant, and Equipment Equipment Less: Accumulated Depreciation 188,000 (39,000) 149,000 Total Assets $ 249,550 Liabilities Current Liabilities Accounts Payable $ 16,000 Stockholders' Equity $ 180.000 g Common Stock, no par Retained Earnings Total Stockholders' Equity 53,550 233 550 Total Liabilities and Stockholders' Equity $ 249.550 Print Done i Requirements - X 1. Prepare Trevor's operating budget and cash budget for 2019 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 2019, including budgeted income statement and budgeted balance sheet. 3. Trevor sold 7.100 sets in 2019, and its actual operating income was as follows: Click the icon to view the actual income statement) Prepare a flexible budget performance report through operating income for 2019. 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 2019 assume the following product costs 2 (Click the icon to view the product costs.) 4. What was the effect on Trevor's operating income of selling 800 sets more than the static budget level of sales? Print Done - Requirements 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 2019, Trevor 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. 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 Trevor'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 Print Done 11. Calculate Trevor's profit margin ratio for 2019. Interpret your results. 12. Calculate Trevor'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. Trevor's management has specified a 10% target rate of return. Calculate Trevor's RI for 2019. Interpret your results Print Done . Data Table Trevor Toy Company Income Statement For the Year Ended December 31, 2019 Net Sales Revenue $ 639,000 Cost of Goods Sold: Variable $ 86,406 Fixed 48,480 134,886 Gross Profit 504,114 Selling and Administrative Expenses Variable 19,170 Fixed 65,200 84,370 419.744 Operating Income Other Income and (Expenses) Print Done i Data Table - X Cost of Goods Sold: Variable $ 86,406 Fixed 48,480 134,886 Gross Profit 504,114 Selling and Administrative Expenses Variable 19.170 Fixed 65,200 84,370 419.744 Operating Income Other Income and (Expenses) Interest Expense Income Before Income Taxes Income Tax Expense (500) 419,244 25.000 Net Income $ 394,244 i Data Table - X Variable Fixed Total $ 72.670 S 50.080 $ 122,750 Static budget Flexible budget 85,606 50.080 135,686 Print Done i Data Table Cost Standard Cost Information Quantity Direct materials 6 pounds per set Direct labor 0.20 hours per set Variable manufacturing overhead 0.20 hours per set Fixed manufacturing overhead Static budget amount: $50,080 0.20 hours per set $1 per pound $10 per hour $10 per hour $40.00 per hour Print Done Data Table 59.220 Actual Cost Information Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (42 300 pounds @ $1.40 per pound) $ (1,380 hours @ $10.10 per hour) (1.380 hours @ 59 60 per hour) 13,938 13,248 48.480 Print Done The Trevor Toy Company manufactures toy building blocksets for children Trevor is planning for 2019 by developing a master budget by quarters Trevor's balance sheet for December 31, 2016 (Cick the icon to view the balance sheet) Other budget data for Trevor Toy Company Click the icon to view the other data) Read the regulaments Trevor Toy Company Production Budget For the Year Ended December 31, 2015 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted set to be sold 1.500 1550 1600 1650 5.300 Plus Desired sets in ending inventory Total sets needed Less Sets in beginning inventory Budgeted sets to be produced Thomany sto enter any number in the input neds and then click Check