QUESTION 15 Avril Company makes collections on sales according to the following
ID: 2495053 • Letter: Q
Question
QUESTION 15
Avril Company makes collections on sales according to the following schedule:
50% in the month of sale
45% in the month following sale
5% in the second month following sale
The following sales are expected:
Expected Sales
January
$180,000
February
$190,000
March
$180,000
Cash collections in March should be budgeted to be:
$184,500
$180,900
$175,500
$180,000
7 points
QUESTION 16
Roye Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During September, the Kennel budgeted for 4,900 tenant-days, but its actual level of activity was 4,930 tenant-days. The Kennel has provided the following data concerning the formulas used in its budgeting and its actual results for September:
Data used in budgeting:
Fixed element
per month
Variable element per tenant-day
Revenue
—
$35.40
Wages and salaries
$2,100
$8.80
Expendables
1,300
15.30
Facility expenses
7,700
4.30
Administrative expenses
6,200
0.10
Total expenses
$17,300
$28.50
Actual results for September:
Revenue
$150,135
Wages and salaries
$28,680
Expendables
$77,130
Facility expenses
$28,225
Administrative expenses
$7,108
The revenue variance for September would be closest to:
$24,387 F
$24,387 U
$23,325 F
$23,325 U
Avril Company makes collections on sales according to the following schedule:
Explanation / Answer
1) March collection = (180000*.50) +(190000* .45) +(180000* .05)
= 90000+ 85500+ 9000
= 184500
correct option is "A"
2) Revenue variance =Actual revenue -Budgeted revenue
= 150135 - (35.4* 4900)
= 150135 - 173460
= 23325 (U)
correct option is "D"
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