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Question 1: Score 0/4

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Exercise 9-1 Schedule of Expected Cash Collections [LO2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

Exercise 9-1 Schedule of Expected Cash Collections [LO2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

Budgeted sales (all on account)

April $ 300,000

May $ 500,000

June $ 200,000

Total $ 1,000,000

Budgeted sales (all on account)

April $ 300,000

May $ 500,000

June $ 200,000

Total $ 1,000,000

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

Requirement 1: Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Requirement 1: Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

February sales March sales April sales May sales June sales Total cash collections

$

$

April 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

$

May 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

$

June 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

$

$

Total 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%) 1 (0%)

February sales March sales April sales May sales June sales Total cash collections

April 23,000 182,000 60,000 0 0 $ 265,000 $

May 0 26,000 210,000 100,000 0 $ 336,000 $

June 0 0 30,000 350,000 40,000 $ 420,000 $

Total 23,000 208,000 300,000 450,000 40,000 $ 1,021,000 $

Total grade: 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 + 0.0×1/24 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% Feedback: April May June Total February sales: $230,000 × 10% March Sales: $260,000 × 70%, 10% April sales: $300,000 × 20%, 70%, 10% May sales: $500,000 × 20%, 70% June sales: $200,000 × 20%

$ 23,000

$

23,000

182,000

$ 26,000

208,000

60,000

210,000

$ 30,000

300,000

100,000

350,000

450,000

40,000

40,000

Total cash collections

$ 265,000

$ 336,000

$ 420,000

$ 1,021,000

Observe that even though sales peak in May, cash collections peak in June. This occurs because the bulk of the company's customers pay in the month following sale. The lag in collections that this creates is even more pronounced in some companies. Indeed, it is not unusual for a company to have the least cash available in the months when sales are greatest.

Your response

Correct response

Requirement 2: Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. (Omit the "$" sign in your response.)

Requirement 2: Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. (Omit the "$" sign in your response.)

Accounts receivable

$ 1 (0%)

Accounts receivable

$ 210,000

Total grade: 0.0×1/1 = 0% Feedback: Accounts receivable at June 30: From May sales: $500,000 × 10% From June sales: $200,000 × (70% + 10%) Total accounts receivable at June 30

$ 50,000 160,000 $ 210,000

Question 2: Score 0/4 Your response Exercise 9-2 Production Budget [LO3] Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

April May June July

Sales in Units 50,000 75,000 90,000 80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units. Required: Show the number of units to be produced each month and for the quarter in total. Required Production

Correct response Exercise 9-2 Production Budget [LO3] Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

April May June July

Sales in Units 50,000 75,000 90,000 80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units. Required: Show the number of units to be produced each month and for the quarter in total.

April May June Quarter

1 1 1 1

(0%) (0%) (0%) (0%)

April May June Quarter

Required Production 52,500 76,500 89,000 218,000

Total grade: 0.0×1/4 + 0.0×1/4 + 0.0×1/4 + 0.0×1/4 = 0% + 0% + 0% + 0% Feedback: Budgeted sales in units Add desired ending inventory* Total needs Less beginning inventory Required production

April 50,000 7,500 57,500 5,000 52,500

May 75,000 9,000 84,000 7,500 76,500

June 90,000 8,000 98,000 9,000 89,000

Quarter 215,000 8,000 223,000 5,000 218,000

*10% of the following month's sales in units.

Question 3: Score 0/4 Your response

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Exercise 9-3 Direct Materials Budget [LO4] Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Exercise 9-3 Direct Materials Budget [LO4] Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Budgeted production, in bottles

First 60,000

Year 2 Second Third 90,000 150,000

Fourth 100,000

Year 3 First 70,000 Budgeted production, in bottles

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)

Production needs—grams Less (0%) : desired ending inventory—grams Total needs—grams Add (0%) : beginning inventory—grams

First 1 1 1 1

(0%) (0%) (0%) (0%)

Second 1 1 1 1

(0%) (0%) (0%) (0%)

Year 2 Third 1 1 1 1

First 60,000

Year 2 Second Third 90,000 150,000

Fourth 100,000

Year 3 First 70,000

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total. (Input all amounts as positive values.)

Production needs—grams

First 180,000

Second 270,000

Year 2 Third 450,0

Raw materials to be purchased—grams Cost of raw materials to be purchased

1 (0%) 1 (0%)

1 (0%) 1 (0%)

1 (0 Add : desired ending inventory—grams 1 (0%) 1 (0%) 1 (0%) Total needs—grams Less : beginning inventory—grams Raw materials to be purchased—grams

54,000 234,000 36,000 198,000

90,000 360,000 54,000 306,000

60,000 510,000 90,000 420,000

42,000 342,000 60,000 282,000

Cost of raw materials to be purchased

29,700

45,900

63,000

42,300

Total grade: 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 + 0.0×1/32 = 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% Feedback: Year 2 Second

First Required production in bottles Number of grams per bottle Total production needs—grams

Third

Fourth 100,000

60,000

90,000

150,000

× 3

× 3

× 3

180,000

270,000

450,000

Year 3 First 70,00 0

× 3 300,000

× 3 210,00 0

Question 4: Score 0/4

Your response

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Exercise 9-4 Direct Labor Budget [LO5] The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Exercise 9-4 Direct Labor Budget [LO5] The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Units to be produced

1st Quarter 8,000

2nd Quarter 6,500

3rd Quarter 7,000

4th Quarter 7,500

Units to be produced

1st Quarter 8,000

2nd Quarter 6,500

3rd Quarter 7,000

4th Quarter 7,500

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.

Requirement 1: Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

Requirement 1: Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign in your response.)

1st Quarter 2nd Quarter 3rd Quarter

Total direct labor cost $ 1 (0%) $ 1 (0%) $ 1 (0%)

1st Quarter 2nd Quarter

Total direct labor cost $ 33,600 $ 27,300

4th Quarter Year

$ 1 (0%) $ 1 (0%)

3rd Quarter 4th Quarter Year

$ 29,400 $ 31,500 $ 121,800

Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% Feedback: Assuming that the direct labor workforce is adjusted each quarter, the direct labor budget is: 1st Quarter 8,000 × 0.35 2,800 × $12.00 $ 33,600

Units to be produced Direct labor time per unit (hours) Total direct labor hours needed Direct labor cost per hour Total direct labor cost

2nd Quarter 6,500 × 0.35 2,275 × $12.00 $ 27,300

3rd Quarter 7,000 × 0.35 2,450 × $12.00 $ 29,400

4th Quarter 7,500 × 0.35 2,625 × $12.00 $ 31,500

Year 29,000 × 0.35 10,150 × $12.00 $ 121,800

Your response

Correct response

Requirement 2: Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)

Requirement 2: Compute the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Omit the "$" sign in your response.)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Total direct labor cost $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% Feedback: Assuming that the direct labor workforce is not adjusted each quarter and that overtime wages are paid, the direct labor budget is:

Units to be produced Direct labor time per unit (hours) Total direct labor hours needed

1st Quarter 8,000 × 0.35 2,800

2nd Quarter 6,500 × 0.35 2,275

3rd Quarter 7,000 × 0.35 2,450

4th Quarter 7,500 × 0.35 2,625

Year

Total direct labor cost $ 34,800 $ 31,200 $ 31,200 $ 31,650 $ 128,850

Regular hours paid Overtime hours paid Wages for regular hours (@ $12.00 per hour) Overtime wages (@ 1.5 hours × $12.00 per hour) Total direct labor cost

2,600 200 $ 31,200 3,600 $ 34,800

2,600 0 $ 31,200 0 $ 31,200

2,600 0 $ 31,200 0 $ 31,200

2,600 25 $ 31,200 450 $ 31,650

$ 124,800 4,050 $ 128,850

Question 5: Score 0/4

Your response

Correct response

Exercise 9-5 Manufacturing Overhead Budget [LO6] The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:

Exercise 9-5 Manufacturing Overhead Budget [LO6] The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:

Budgeted direct labor-hours

1st Quarter 8,000

2nd Quarter 8,200

3rd Quarter 8,500

4th Quarter 7,800

Budgeted direct labor-hours

1st Quarter 8,000

2nd Quarter 8,200

3rd Quarter 8,500

4th Quarter 7,800

The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing overhead is $48,000 per quarter. The only non cash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

Requirement 1: Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your response.)

Requirement 1: Compute the company's manufacturing overhead budget for the upcoming fiscal year. (Omit the "$" sign in your response.)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Cash disbursements for manufacturing overhead $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%) $ 1 (0%)

Total grade: 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 + 0.0×1/5 = 0% + 0% + 0% + 0% + 0% Feedback: Yuvwell Corporation Manufacturing Overhead Budget 1st 2nd Quarter Quarter Budgeted direct labor-hours 8,000 8,200 Variable overhead rate $ × 3.25 $ × 3.25 Variable manufacturing overhead $ 26,000 $ 26,650

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

3rd Quarter 8,500 $ × 3.25 $ 27,625

4th Quarter 7,800 $ × 3.25 $ 25,350

Year 32,500 $ × 3.25 $ 105,625

Cash disbursements for manufacturing overhead $ 58,000 $ 58,650 $ 59,625 $ 57,350 $ 233,625

Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbursements for manufacturing overhead

48,000 74,000 16,000 $ 58,000

48,000 74,650 16,000 $ 58,650

48,000 75,625 16,000 $ 59,625

48,000 73,350 16,000 $ 57,350

192,000 297,625 64,000 $ 233,625

Your response

Correct response

Requirement 2: Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Requirement 2: Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Manufacturing overhead rate for the year

$ 1 (0%)

Manufacturing overhead rate for the year

$

9.16

Total grade: 0.0×1/1 = 0% Feedback: Total budgeted manufacturing overhead for the year (a) Total budgeted direct labor-hours for the year (b) Manufacturing overhead rate for the year (a) ÷ (b)

$ 297,625 32...