1. Franklin, Inc. has two divisions, Seward and Charles. Following is the income

Question

1. Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year:

Of the total fixed costs, $302,700 are common fixed costs that are allocated equally between the divisions. How much did the Charles division incur in direct fixed costs?

A $172,800

B $302,700

C $149,800

D $21,450

2. Boxwood Inc has forecast purchases on account to be $313,000 in March, $371,000 in April, $424,000 in May, and $492,000 in June. Sixty percent of purchases are paid for in the month of purchase, the remaining 40% are paid in the following month. What is the budgeted Accounts Payable balance for June 30?

A $254,400

B $295,200

C $169,600

D $196,800

3. Delaware Corp. prepared a master budget that included $24,360 for direct materials, $44,660 for direct labor, $15,200 for variable overhead, and $38,900 for fixed overhead. Delaware Corp. planned to sell 4,060 units during the period, but actually sold 4,310 units. What would Delaware’s direct labor cost be if it used a flexible budget for the period based on actual sales?

Seward Charles Sales $ 603,200 $ 403,000 Variable Costs 198,100 253,200 Contribution Margin $ 405,100 $ 149,800 Fixed Costs 177,700 172,800 Profit Margin $ 227,400 $ (23,000 )

Explanation / Answer

1 Direct fixed costs for irect fixed costs = 172800-(302700/2)= 21450 2 Budgeted Accounts Payable balance for June 30 =(492000*40%)= 196800 3 Delaware’s direct labor cost in flexible budget = 44660/4060*4310= 47410

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