Hello, I need help with two of my accounting problems: 1, The following informat

Question

Hello, I need help with two of my accounting problems:

1, The following information was gathered for Larsen Company for the year ended December 31, 2001:

Budgeted Direct-labor hours 15,500

Actual direct-labor hours 16,200

Budgeted factory overhead $73,625

Actual Factory overhead $74,990

Assume the direct-labor hours is the cost driver.

What is the amount of the over/underapplied overhead?

A. $1,365 underapplied

B. $1, 365 overapplied

C. $3,225 underapplied

D. $1,960 overapplied

4. Please prepare a cash budget for the month of April from the following information:

- Estimated cash balance at the end of March is $250,000

-Aprils depreciation is $25,000

-Taxes of the year of $50,000 will be paid in December

- Payroll for April will be $45,000

-Insurance cost for the month of April will be $5,000

-Collections of sales are as follows: 50% in the month of the sale, and 25% in each of the next two months

-Receivables balance as of the end of March is $200,000 ($150,000 relating to February and $50,000 relating to March)

-Sales for the month of April are estimated to be $300,000

-Merchandise purchases are paid as follow: 50% in the month of the purchase and 50% in the next month

-Marchs purchases were $200,000 and April was $150,000

Explanation / Answer

1 Budgeted Factory overhead rate = Budgeted Factory Overhead ÷ Budgeted direct labor hours Budgeted Factory overhead rate = $73,625 ÷ 15,500 = $4.75 per direct labor hour Applied Factory Overhead = Predetermined overhead rate x Actual Hours Applied Factory Overhead = $4.75 x 16,200 = $76,950 Actual factory overhaed = $74,990 Applied fcatory overhead =          76,950 Overapplied overhead = $1,960 Overapplied 4 April Beginning balance $        250,000 Add: collection from customer            312,500 =300000*0.5 + 150000 + 50000 *0.25 Total cash available $        562,500 Less: Payments to creditors            175,000 =200000*0.5+150000*0.5 Less: operating expenses paid in cash Payroll              45,000 Insurance cost                 5,000 Total payments            225,000 Ending balance            337,500 Note: Depreciation is not a cash expense and taxes are to be paid in December.

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