Problem 1 - Picture Pretty manufactures picture frames. Sales for August are exp
ID: 2356511 • Letter: P
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Problem 1 - Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Prices are $0.30 per foot of framing, $6.00 per square foot of glass, and $2.25 per square foot of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired. Question 1: Determine the quantity of framing, glass, and backing that is to be purchased during August. Question 2: Determine the total costs of direct materials for August purchases. Problem 2 - Russell Company has the following projected account balances for June 30, 20X2: Accounts payable $40,000 Sales $800,000 Accounts receivable 100,000 Capital stock 400,000 Depreciation, factory 24,000 Retained earnings ? Inventories (5/31 & 6/30) 180,000 Cash 56,000 Direct materials used 200,000 Equipment, net 240,000 Office salaries 80,000 Buildings, net 400,000 Insurance, factory 4,000 Utilities, factory 16,000 Plant wages 140,000 Selling expenses 60,000 Bonds payable 160,000 Maintenance, factory 28,000 Question 1: Calculate the budgeted net income for June 20X2. Question 2: Calculate the budgeted total assets as of June 30, 20X2. Problem 3 - Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X2, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows: Item Fixed Variable Cost driver Product handling $10,000 $1.25 per 100 units Storage - 3.00 per storage bin Utilities 1,000 1.50 per 100 units Shipping clerks 1,000 1.00 per shipment Supplies - 0.50 per shipment During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20X2 were: Item Actual costs Product handling $10,900 Storage 465 Utilities 2,020 Shipping clerks 1,400 Supplies 340 Question 1: Determine the 20X2 static budget variances. Question 2: Determine the 20X2 flexible budget variances.Explanation / Answer
You have more than one problem, so split it in one problem for every post. Here is the answer for Problem 1- Picture Pretty manufactures.......
a. Framing Glass Backing
Desired ending inventory* 2,250 750 750
Production needs (10,000 units)** 40,000 10,000 20,000
Total needs 42,250 10,750 20,750
Less: Beginning inventory 1,500 500 500
Purchases planned 40,750 10,250 20,250
b. Cost of direct materials:
Framing (40,750 x $0.30) $12,225.00
Glass (10,250 x $6.00) 61,500.00
Backing (20,250 x $2.25) 45,562.50
Total $119,287.50
*1,500 x 1.5 = 2,250
500 x 1.5 = 750
**10,000 x 4 = 40,000
10,000 x 1 = 10,000
10,000 x 2 = 20,000
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