Chapter 6 and 7 Problems Chapter 6 Exercise 22. Schedule of cash collections Sugarland Company sells a single product and anticipates opening a new facility in Charlotte on May 1 of the current year. Expected sales during the first three months of activity are: May $60000; June $80000; and July $85000. Thirty percent of all sales are for cash; the remaining 70% are on account. Credit sales have the following collection pattern: Collected in the month of sale 60%Collected in the month following sale 35Uncollectible 5Chapter 6 Exercise 4 4. Production and cash-outlay computations RPR Inc. anticipates that 120000 units of product K will be sold during May. Each unit of product K requires four units of raw material A. Actual inventories as of May 1 and budgeted inventories as of May 31 follow.1-May31-MayEach unit of raw material A costs $8; RPR pays for all purchases in the month of acquisition. Invoices that account for 80% of the cost of materials acquired will be paid within 10 days of receipt entitling the company to a 2% cash discount.$10000$ ?$ ?500006300071000-64000-58000-64000($4000)$ ?$ ??????????$ ?$ ?$ ?Chapter 6 Exercise 5 5. Abbreviated cash budget; financing emphasis An abbreviated cash budget for Big Chuck Enterprises follows.Big Chuck wishes to maintain a $10000 minimum cash balance at all times. Additional financing is available (and retired) in $1000 multiples at a 12% interest rate. Assume that borrowings take place at the beginning of the month; retirements in contrast occur at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid.Chapter 6 Problem 3 3. Comprehensive budgetingThe balance sheet of Watson Company as of December 31 19X1 follows.WATSON COMPANYBalance SheetDecember 31 19X1$45951000040251380$500001000040000$60000$14000$250002100046000$60000Chapter 7 Exercise 33. Variances for direct materials and direct laborBanner Company manufactures flags of various countries. Each flag has a standard of eight square feet of fabric and three hours of direct labor time. Information about recent production activity follows.Actual cost of fabric: $4.50 per square footFabric consumed: 32080 square feetStandard price per square foot of fabric: $4.25Standard direct labor rate: $10.00 per hourActual direct labor rate: $10.20 per hourActual labor hours worked: 11940Actual production completed: 4000 flagsChapter 7 Exercise 55. Overhead variancesNova Manufacturing applies factory overhead to products on the basis of direct labor hours. At the beginning of the current year the company s accountant made the following estimates for the forthcoming period:It is now 12 months later. Actual total overhead incurred in the manufacture of 7900 units amounted to $895100. Actual labor hours totaled 39800. Assuming a direct labor standard of five hours per finished unit calculate the following:Chapter 7 Problem 11. P26-A1 Basic flexible budgeting (L.O. 2)Centron Inc. has the following budgeted production costs:The company normally manufactures between 20000 and 25000 units each quarter. Should output exceed 25000 units maintenance and other fixed costs are expected to increase by $6000 and $4500 respectively.During the recent quarter ended March 31 Centron produced 25500 units and incurred the following costs:$107104717551940245002370016800$174825Instructions:Chapter 7 Problem 55. P26-B3 Straightforward variance analysis (L.O. 5)Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.The following information pertains to activity for December:
