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Essay on Week 4 Assignment from Textbook

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Week 4 Assignment from Textbook: Chapter 23 & 24
Esther Tate
ACC/400
July 26, 2015
Theresa Pekron

Brief Exercise 23.6 – Elements of the Budget
Identify the budgets in Column B from which dollar amounts are transferred directly in constructing the budgets listed in Column A:

1. Budgeted income statement
a. Direct materials budget
2. Budgeted balance sheet
b. Cost of goods sold budget
3. Cash flow budget
c. Production budget
4. Cost of goods sold budget
d. Payables budget
5. Production budget
e. Sales budget
6.
f. Budgeted income statement

1. Budgeted income statement – e. Sales budget
2. Budgeted balance sheet – d. Payables budget
3. Cash flow budget – a. Direct materials budget
4. Cost of goods sold budget – b. Cost …show more content…

Collections Table

Jan Sales
Feb Sales
Mar Sales
Apr Sales
May Sales
Total Collection
Collections month of Mar 31
$45,000
$120,000
$300,000
$0
$0
$465,000
Collections month of Apr 30
$0
$60,000
$180,000
$350,000
$0
$590,000
Collections month of May 31
$0
$0
$90,000
$210,000
$400,000
$700,000

Cash Budget March
April
May
Opening Cash Balance
$500,000
$565,000
$755,000
Add Collections
$465,000
$590,000
$700,000
Less Expenditures
$400,000
$400,000
$400,000
Ending Cash Balance
$565,000
$755,000
$1,055,000

Cash balance on March 31st $565,000
Cash balance on April 30th $755,000
Cash balance on May 31st $1,055,000

Exercise 24.2 – Relationships among Standard Costs, Actual Costs and Cost Variances

The standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows:

Variances

Standard Cost
Unfavorable
Favorable
Direct Materials
$85,000

Price Variance $5,000 Quantity Variance

$3,000
Direct Labor
$150,000

Rate variance

$2,700 Efficiency variance $6,200 Manufacturing Overhead
$300,000

Spending variance

$4,000 Volume variance

$5,000

Determine the actual costs incurred during the month of May for direct materials, direct labor, and manufacturing overhead.

Total Material Cost Variance + (Price variance - Quantity variance)
= 85,000

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