Baker charges its customers $80 per hour. The chief operating officer expected that the company would provide 50,000 hours of service to clients. However, the vice president for marketing argues that the actual number of hours may range from 46,000 to 54,000 hours. Baker's standard variable cost is $52.50 per hour, and its standard fixed cost is $770,000. Required: Prepare flexible budgets for 46,000, 50,000, and 54,000 hours. $ $ 46,000 0 $ 0 $ Hours 50,000 0 $ 0 $ 54,000 0 0

Baker charges its customers $80 per hour. The chief operating officer expected that the company would provide 50,000 hours of service to clients. However, the vice president for marketing argues that the actual number of hours may range from 46,000 to 54,000 hours. Baker's standard variable cost is $52.50 per hour, and its standard fixed cost is $770,000. Required: Prepare flexible budgets for 46,000, 50,000, and 54,000 hours. $ $ 46,000 0 $ 0 $ Hours 50,000 0 $ 0 $ 54,000 0 0

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 15EA: Cold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per...

See similar textbooks

Similar questions

Cold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per unit, direct labor of $3 per unit, and manufacturing overhead of $1 per unit. Fixed costs are $35,000. What would be the budgeted amounts for 20,000 and 25,000 units?
The Sea Wharf Restaurant would like to determine the best way to allocate a monthly advertising budget of 1,000 between newspaper advertising and radio advertising. Management decided that at least 25% of the budget must be spent on each type of media and that the amount of money spent on local newspaper advertising must be at least twice the amount spent on radio advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100, with higher values implying greater audience exposure. If the value of the index for local newspaper advertising is 50 and the value of the index for spot radio advertising is 80, how should the restaurant allocate its advertising budget to maximize the value of total audience exposure? a. Formulate a linear programming model that can be used to determine how the restaurant should allocate its advertising budget in order to maximize the value of total audience exposure. b. Develop a spreadsheet model and solve the problem using Excel Solver.
Artic Camping Gears currently sells 35,000 units at $73 per unit. Its expenses are as follows: Management believes it can increase sales by 2,000 units for every $5 decrease in sales price. It also believes the additional sales will allow a decrease in direct material of $1 for each additional 2,000 units. Prepare a flexible budgeted income statement for 35,000-, 37,000-, and 39,000-unit sales.
According to its original plan, Munoz Consulting Services Company plans to charge its customers for service at $125 per hour. The company president expects consulting services provided to customers to reach 55,000 hours at that rate. The marketing manager, however, argues that actual results may range from 49,000 hours to 61,000 hours because of market uncertainty. Munoz's standard variable cost is $46 per hour, and its standard fixed cost is $1,410,000. Required Develop flexible budgets based on the assumptions of service levels at 49,000 hours, 55,000 hours, and 61,000 hours.
Carousel Co. has prepared the following budget data: Sales, 150,000 units; selling price per unit, P25.00; variable cost per unit, P15.00; fixed costs and expenses, P1,300,000. An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of P300,000?
According to its original plan, Benson Consulting Services Company plans to charge its customers for service at $132 per hour. The company president expects consulting services provided to customers to reach 46,000 hours at that rate. The marketing manager, however, argues that actual results may range from 42,000 hours to 50,000 hours because of market uncertainty. Benson's standard variable cost is $40 per hour, and its standard fixed cost is $1,410,000. Required Develop flexible budgets based on the assumptions of service levels at 42,000 hours, 46,000 hours, and 50,000 hours. Flexible Budget Flexible Budget Flexible Budget 46,000 Hours 42,000 Hours 50,000 Hours
According to its original plan, Finch Consulting Services Company plans to charge its customers for service at $128 per hour. The company president expects consulting services provided to customers to reach 48,000 hours at that rate. The marketing manager, however, argues that actual results may range from 42,000 hours to 54,000 hours because of market uncertainty. Finch's standard variable cost is $47 per hour, and its standard fixed cost is $1,390,000, Required Develop flexible budgets based on the assumptions of service levels at 42,000 hours, 48,000 hours, and 54,000 hours. Flexible Budget Flexible Budget Flexible Budget 48,000 Hours 42,000 Hours 54,000 Hours tes
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 4%, travel 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. Prepare a monthly selling expense flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.)
Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are: Sales commissions 5% Advertising 4% Traveling 7% Delivery 1% Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000. The actual selling expenses incurred in February, 2020, by Cadiz are as follows: Sales commissions $17,200 Advertising 12,000 Traveling 23,700 Delivery 2,400 Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000. Instructions Prepare a flexible budget performance report, assuming that February sales wore $330,000.
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $167,300 to $209,300. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, travel 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $34,900, depreciation on delivery equipment $7,100, and insurance on delivery equipment $1,900.Prepare a monthly selling expense flexible budget for each $14,000 increment of sales within the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.) FALLON COMPANYMonthly Selling Expense Flexible BudgetFor the Year 2020 AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses…
SafeNow sells its main product, ergonomic mouse pads, for $11 each. Its variable cost is $5.20 per pad. Fixed costs are $205,000 per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are $255,000. Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 40,000, 45,000, and 75,000 pads. SafeNow Flexible Budget Budget Amounts Per Unit 75.000 45,000 Units back @ # * 3 $ 40.000 IOI 4 5 6 4- & 7 LO T 9 O 44 ←
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.10 Indirect materials 0.60 Utilities 0.40 Fixed overhead costs per month are Supervision $3,900, Depreciation $1,200, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,300 direct labor hours per month.Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $10,730 Supervision $3,900 Indirect materials 5,840 Depreciation 1,200 Utilities 3,530 Property taxes 500 (a) Prepare a flexible budget performance report, assuming that the company worked 10,000 direct labor hours during the month. (List variable costs before fixed costs.) MYERS COMPANYManufacturing Overhead Flexible Budget ReportFor the Month Ended July 31, 2020…