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    MA FX Q Solution 1 2 3

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    thalnay zarsoe
    This document contains three sections that provide financial budgets and projections for a company: 1. The first section shows cost breakdowns and calculations to determine the break-even number of "ways" or units of production. It finds the break-even is 30.76 ways at current costs, and 31 ways with a 10% increase in variable costs. 2. The second section outlines planning, flexible, and actual budgets for labor hours, expenses, and variances. It shows the flexible budget adjusted for a slight increase in labor hours. 3. The third section presents sales, production, materials, and cash flow budgets by quarter and year. It provides schedules of expected cash collections from sales and cash payments for

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    MA FX Q Solution 1 2 3

    Uploaded by

    thalnay zarsoe
    56 views4 pages
    This document contains three sections that provide financial budgets and projections for a company: 1. The first section shows cost breakdowns and calculations to determine the break-even number of "ways" or units of production. It finds the break-even is 30.76 ways at current costs, and 31 ways with a 10% increase in variable costs. 2. The second section outlines planning, flexible, and actual budgets for labor hours, expenses, and variances. It shows the flexible budget adjusted for a slight increase in labor hours. 3. The third section presents sales, production, materials, and cash flow budgets by quarter and year. It provides schedules of expected cash collections from sales and cash payments for

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    MA_FX_Q_Solution_1_2_3

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    This document contains three sections that provide financial budgets and projections for a company: 1. The first section shows cost breakdowns and calculations to determine the break-even number of "ways" or units of production. It finds the break-even is 30.76 ways at current costs, and 31 ways with a 10% increase in variable costs. 2. The second section outlines planning, flexible, and actual budgets for labor hours, expenses, and variances. It shows the flexible budget adjusted for a slight increase in labor hours. 3. The third section presents sales, production, materials, and cash flow budgets by quarter and year. It provides schedules of expected cash collections from sales and cash payments for

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    56 views4 pages

    MA FX Q Solution 1 2 3

    Uploaded by

    thalnay zarsoe
    This document contains three sections that provide financial budgets and projections for a company: 1. The first section shows cost breakdowns and calculations to determine the break-even number of "ways" or units of production. It finds the break-even is 30.76 ways at current costs, and 31 ways with a 10% increase in variable costs. 2. The second section outlines planning, flexible, and actual budgets for labor hours, expenses, and variances. It shows the flexible budget adjusted for a slight increase in labor hours. 3. The third section presents sales, production, materials, and cash flow budgets by quarter and year. It provides schedules of expected cash collections from sales and cash payments for

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    You are on page 1of 4

    I.

    1.

    Number of Ways
    200 300 400
    Total Costs
    Fixed Costs $ 200,000 $ 200,000 $ 200,000
    Variable Costs $ 100,000 $ 150,000 $ 200,000
    Total Costs
    Cost per way Transport
    Fixed Costs $ 1000 $ 666.67 $ 500
    Variable Costs $ 500 $ 500 $ 500
    Total Cost per way $ 1500 $ 1166.67 $ 1000

    2. Break-even ways
    Fixed Costs / (Income per way – variable cost per way)
    = $ 200,000 / ($ 7000 - $ 500)
    = $ 200,000 / $ 65,00
    = 30.76 ways
    3. Break-even ways on variable cost increase by 10 %
    = Fixed Costs / (Income per way – variable cost per way)
    = $ 200,000 / ($ 7000 – ($ 500 x 10%))
    = $ 200,000 / ($ 7000 - $ 550)
    = $ 200,000 / $ 6450
    = 31 ways

    ###########################

    II.
    1. Planning Budget

    Budget labor hours (Q) 8000


    Direct Labor $ 15.8 Q $ 126,400
    Indirect Labor $ 3200 + 1.5 Q $ 15,200
    Utilities $ 5400 + 0.7 Q $ 11,000
    Supplies $1200 + 0.5 Q $ 5,200
    Equipment Depreciation $ 20,000 + 2.5 Q $ 40,000
    Factory Rent $ 7500 $ 7500
    Property Taxes $ 3000 $ 3000
    Factory Administration $ 12,000 + 1.5 Q $ 24,000
    Total Expense $ 232,300
    2. Flexible Budget

    Budget labor hours (Q) 8200


    Direct Labor $ 15.8 Q $ 129,560
    Indirect Labor $ 3200 + 1.5 Q $ 15,500
    Utilities $ 5400 + 0.7 Q $ 11,140
    Supplies $1200 + 0.5 Q $ 5,300
    Equipment Depreciation $ 20,000 + 2.5 Q $ 40,500
    Factory Rent $ 7500 $ 7500
    Property Taxes $ 3000 $ 3000
    Factory Administration $ 12,000 + 1.5 Q $ 24,300
    Total Expense $ 236,800

    3. Performance Report

    Budget labor hours 8000 8200 Actual


    (Q) Cost
    Direct Labor $ 126,400 3160 U $ 129,560 5240 U $ 134,800
    Indirect Labor $ 15,200 300 U $ 15,500 2100 U $ 17,600
    Utilities $ 11,000 140 U $ 11,140 40 F $ 11,100
    Supplies $ 5,200 100 U $ 5,300 300 F $ 5,000
    Equipment $ 40,000 500 U $ 40,500 1800 U $ 42,300
    Depreciation
    Factory Rent $ 7500 0 $ 7500 500 U $ 8,000
    Property Taxes $ 3000 0 $ 3000 200 F $ 2,800
    Factory $ 24,000 300 U $ 24,300 700 U $ 25,000
    Administration
    Total Expense $ 232,300 4500 U $ 236,800 9800 U $ 246,600

    ###########################

    III.
    1. Sales Budget

    Year 2 Quarters Year


    1 2 3 4
    Budgeted Sales Unit 10000 11000 12100 13310 46410
    Selling Price per unit $ 12 $ 12 $ 12 $ 12 $ 12
    Total Sales $120,000 $132,000 $145,200 $159,720 $556920
    Bases on the budgeted sales above, the schedule of expected cash
    collections is prepared as follow.

    Year 2 Quarters Whole


    1 2 3 4 Year
    AR, Beginning Bal; $ 75,000 $ 75,000
    1st Q sales x 75%, 25% $ 90,000 $ 30,000 $120,000
    2ndQ sales x 75%, 25% $ 99,000 $ 33,000 $132,000
    3rd Q sales x 75%, 25% $ 108,900 $ 36,300 $145,200
    4th Q sales x 75% $ 119,790 $119,790
    Total Cash collections $ 165,000 $129,000 $141,900 $156,090 $591,990

    2. Production Budget is prepared as follow

    Year 2 Quarters Whole Year 3


    1 2 3 4 Year Q-1
    Budgeted Unit Sales 10000 11000 12100 13310 46410 14641
    Ending Finished Goods (+) 2200 2420 2662 2928 2928 3221
    Total needs 12200 13420 14762 16238 49338 17862
    Beg Finished Goods (-) 12000 2200 2420 2662 12000 2928
    Required production 200 11220 12342 13576 37338 14934

    3. Direct Material Budget and schedule of expected cash payment for


    purchase of materials

    Year 2 Quarters Whole Year 3


    1 2 3 4 Year Q-1
    Required production 200 11220 12342 13576 37338 14934
    Raw material needs per unit (x) 5 5 5 5 5 5
    Production needs 1000 56100 61710 67880 186690 74670
    Ending Raw material (+) 5610 6171 6788 7467 7467
    Total needs 6610 62271 68498 75347 194157
    Beg Raw material (-) 24000 5610 6171 6788 24000
    Raw material to be purchased 0 56661 62327 68559 170157
    Based on the raw material to be purchased above, expected cash payment
    are computed as follow

    Year 2 Quarters Whole


    1 2 3 4 Year
    Raw material to be purchased 0 56661 62327 68559 170157
    RM cost ($0.80 per foot) 0 $45,329 $49,862 $54,847 $150,038

    AP Beginning Bal: $70,000 $70,000


    1st Q purchase x 60%, 40% 0 0 0
    2ndQ purchase x 60%, 40% $27,197 $18,132 $45,329
    3rd Q purchase x 60%, 40% $29,917 $19,945 $49,862
    4th Q purchase x 60% $32,908 $32908
    Total Cash payable $70,000 $27,197 $48,049 $52,853 $198,099

    ###########################

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