The Yates Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturinglabor. Direct materials: 10 lb. at $4.90 per lb. Direct manufacturing labor. 0.5 hour at $32 per hour 16.00 The number of finished units budgeted for January 2014 was 9930; 9900 units were actually produced. Actual results in January 2014 were as follows: Direct materials: 97,500 lb. used Direct manufacturing labor. 4,900 hours $ 165,375 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 99,300 at a total cost of $501,465. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. 1. Compute the January 2014 price and efficiency variances of direct materials and direct manufacturing labor. 2. Prepare journal entries to record the variances in requirement 1. 3. Comment on the January 2014 price and efficiency variances of Yates Corporation. 4. Why might Yates calculate direct materials price variances and direct materials efficiency variances with reference to different points in time? Requirement 1. Compute the January 2014 price and efficiency variances of direct materials and direct manufacturing labc $49.0 0 Let's begin by calculating the actual input at the budgeted price. (Round your answers to the nearest whole dollar.) x Budgeted price = Actual input x Cost Direct materials (purchases) Direct materials (usage) Direct manufacturing labor x = Katharine Johnson is the owner of Better Bikes, a company that produces high quality cross-country bicycles. Better Bikes participates in a supply chain that consists of suppliers, manufacturers, distributors, and elite bicycle shops. For several years Better Bikes has purchased titanium from suppliers in the supply chain. Better Bikes uses titanium for the bicycle frames because it is stronger and lighter than other metals and therefore increases the quality of the bicycle. Earlier this year, Better Bikes hired Samson, a recent graduate from State University, as purchasing manager. Michael believed that he could reduce costs if he purchased titanium from an online marketplace at a lower price. 1. Compute the direct materials price and efficiency variances. 2. What factors can explain the variances identified in requirement 1? Could any other variances be affected? 3. Was switching suppliers a good idea for Better Bikes? Explain why or why not. 4. Should Michael Samson's performance evaluation be based solely on pricevariances? Should the production manager's evaluation be based solely on efficiency variances? Why is it important for Katharine Johnson to understand the causes of a variance before she evaluates performance? 5. Other than performance evaluation, what reasons are there for calculatingvariances? 6. What future problems could result from Better Bikes' decision to buy a lower quality of titanium from the online marketplace? Data Table Better Bikes established the following standards based upon the company's experience with their previous suppliers. The standards are as follows: Cost of titanium $ 23 per pound Titanium used per bicycle 8 lbs. Actual results for the first month using the online supplier of titanium are as follows: Bicycles produced 500 Titanium purchased Titanium used in production 6,500 lb. for $143,000 5,000 lb. Requirement 1. Compute the direct materials price and efficiency variances. Let's begin by calculating the cost for the actual input at the budgeted price. Direct materials (purchases) Direct materials (usage) Actual input x Budgeted price Cost x x Hansell Company expects its trial balance on June 30 to be as follows: HANSELL COMPANY Budgeted Trial Balance June 30, 2019 Cash Accounts receivable Allowance for bad debts Book erences Inventory Plant, property, and equipment Accumulated depreciation Accounts payable Wages and salaries payable Note payable Stockholders' equity Total Debit Credit $ 30,000 60,000 $ 2,600 18,600 483,600 238,100 70,700 17,900 149,200 113,700 $592,200 $592,200 Typically, cash sales for Hansell represent 20% of sales while credit sales represent 80%. Credit sales terms by the company are 2/10, n/30. Hansell bills customers on the first day of the month following the month of sale. Experience has shown that 60% of the company's billings will be collected within the discount period, 25% by the end of the month after sales, 10% by the end of the second month after the sale, and 5% will ultimately be uncollectible. The company writes off uncollectible accounts after 12 months. The purchase terms for materials are 2/15, n/60. Hansell makes all payments within the discount period. Experience has shown that 80% of the purchases are paid in the month of the purchase and the remainder are paid in the month immediately following. In June 2019, the firm budgeted purchases of $18,900 for Dura-1000 and $16,500 for Flexplas. Variable manufacturing overhead is budgeted at $900 per batch (of 100 units) plus $80 per direct labor hour. In addition to variable overhead, the firm has a monthly fixed factory overhead of $37,800, of which $7,800 is depreciation expense. The firm pays all manufacturing labor and factory overhead when incurred. Total budgeted marketing, distribution, customer service, and administrative costs for 2019 are $2,534,000. Of this amount, $895,000 is considered fixed and includes depreciation expense of $90,000. The remainder varies with sales. The budgeted total sales for 2019 are $4 million. All marketing and administrative costs are paid in the month incurred. Management desires to maintain an end-of-month minimum cash balance of $30,000. The firm has an agreement with a local bank to borrow its short-term needs in multiples of $1,000 up to $100,000 at an annual interest rate of 12%. Borrowings are assumed to occur at the end of the month. Bank borrowing at July 1 is $0. Required: Using the information presented above: 1. Prepare the cash budget for July 2019. 2. Prepare the budgeted income statement for July 2019. (Assume that the company uses a LIFO cost-flow assumption.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the cash budget for July 2019. (Round your answers to the nearest whole dollar amount.) Prepare the cash budget for July 2019. (Round your answers to the nearest whole dollar amount.) HANSELL COMPANY Cash Budget Cash balance, beginning (given) Cash flow from operations: Collections of receivables from credit sales in June: Cash disbursements: Materials purchases-June Materials purchases-July For July 2019 + Prev Next 0 Total cash flow from operations Investing activities: Sales of investments and other long-term assets Interest payments, end of month Purchases of investments and other long-term assets Repayment of existing debt, end of month Financing activities: Cash balance, July 31, 2019 $ 0 $ $ 0 Required 1 Required 2 > 0 Prepare the budgeted income statement for July 2019. (Assume that the company uses a LIFO cost-flow assumption.) (Round "per unit" to 2 decimal places and other answers to the nearest whole dollar amount.) HANSELL COMPANY Budgeted Income Statement For July 2019 Sales Cost of goods sold Selling and administrative expenses-Fixed Cost per unit, July $ 0 $ 0 $ 0.00 < Prev 3 of 3 Next > mework-help/questions-and-answers/need Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July 2019. The firm sells the product for $93 per unit and has the following expected sales (In units) for these months in 2019: April 3,700 May 6,700 June 6,800 July 8,600 August 9,600 September 5,408 The production process requires 4 pounds of Dura-1000 and 2 pounds of Flexplas. The firm's policy is to maintain an ending Inventory each month equal to 10% of the following month's budgeted sales, but in no case less than 500 units. All materials Inventories are to be maintained at 5% of the production needs for the next month, but not to exceed 1,000 pounds. The firm expects all Inventories at the end of June to be within the guidelines. The purchases department expects the materials to cost $1.25 per pound and $5.00 per pound for Dura-1000 and Flexplas, respectively. The production process requires direct labor at two skill levels. The rate for labor at the K102 level is $50 per hour and $20 per hour for the K175 level. The K102 level can process one batch of duraflex per hour, each batch consists of 100 units. The manufacturing of Duraflex also requires one-tenth of an hour of K175 workers' time for each unit manufactured. Required: On the basis of the preceding data and projections, prepare the following budgets: a. Sales budget for July (in dollars). b. Production budget for July (in units). c. Production budget for August (In units). d. Direct materials purchases budget for July (in pounds). e. Direct materials purchases budget for July (in dollars). f. Direct manufacturing labor budget for July (in dollars). Answer is complete but not entirely correct. a. Sales budget for July (in dollars) $ 799,800 b. Production budget for July (in units) 8,700 C. Production budget for August (in units) 9,180 Direct materials purchases budget for July (in d. 52,488 pounds) e. Direct materials purchases budget for July (in dollars) $ 129,500 f Direct manufacturing labor budget for July (in dollars) $ 21,750 Please help finding: d. Direct materials purchases budget for July (in pounds). e. Direct materials purchases budget for July (in dollars). The Seneca Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor. The Seneca Corporation manufactures lamps. It has set up the following standards per finished unit for Assume that there was no beginning inventory of either direct materials or finished units. During the direct materials and direct manufacturing labor. month, materials purchased amounted to 98,800 lb., at a total cost of $653,280. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. (Click the icon to view the standards.) The number of finished units budgeted for January 2017 was 9,880: 9,850 units were actually produced. (Click the icon to view actual data.) Requirement 1. Compute the January 2017 price and efficiency variances of direct materials and direct Let's begin by calculating the actual input at the budgeted price. (Round your answers to the nearest who Direct materials (purchases) Direct materials (usage) Direct manufacturing labor Cost $533,520 Actual input x Budgeted price 5.40 5.40 4,700 32.00 $ 523,800 $150,400 98,800 97,000 Standards Direct materials: 10 lb. at $5.40 per lb. Direct manufacturing labor. 0.5 hour at $32 per hour Print Done $54.00 16.00 Next determine the formula and calculate the costs for the flexible budget. Budgeted input for actual output x Direct materials Direct manufacturing labor 98,500 4,925 Budgeted price Flexible budget cost 531,900 - 5 157,600 5.40 32.00 Now compute the price and efficiency variances for direct materials and direct manufacturing labor Label each variance as favorable (F) or unfavorable (U). Direct materials Direct manufacturing labor Price variances Efficiency variances U U Actual Data Actual results in January 2017 were as follows: Direct materials: 97,000 lb. used Direct manufacturing labor: 4,700 hours $ 158,625 Print Done Now compute the price and efficiency variances for direct materials and direct manufacturing labor. Label each variance as favorable (F) or unfavorable (U).