1.

Sung Corporation has prepared the following sales budget: Month May June July August September October Sales in units 6,000 6,800 8,000 7,400 9,200 7,600

Collections are 40% in the month of sale, 45% in the month following the sale and 10% two months after the sale. The remaining 5% is expected to be uncollectible. The average selling price of the companys products is $100 per unit. The average purchase cost of each unit is $70. Each month the company buys enough units for sales for that month plus target ending inventory of 25% of the next months sales. You may assume that beginning inventory each month is ending inventory of the previous month. All purchases are paid in full in the month of purchase.

Total selling, general and administrative costs amount to $4,000 per month. Cash in the bank on August 1 is $10,000. Inventory on hand on May 1 is 1,500 units. Prepare the cash budget for Sung Corporation for August.

2. Robin Industries Inc. developed standard costs for direct material and direct labor for one of its major products, the 2-gallon drum. In 2012 the company expected to sell 6,000 drums per month. It estimated the following standard costs per drum: Budgeted Budgeted quantity price______ Direct materials 22 pounds $30 per pound Direct labor 0.50 hours $16 per hour During January, 2012, Robin Industries produced and sold 5,000 drums using 107,500 pounds of direct materials at an average cost per pound of $32 and using 2,600 direct labor hours at an average cost of $15.25 per hour. Being sure to label each answer F for favorable, U for unfavorable, what are the companys January a) direct material price variance? ____________________ b) direct labor efficiency variance? ____________________

NAME ___________________________________ 3. Waddell Productions makes separate journal entries for all cost accounting-related activities. It uses a standard cost system for all manufacturing items. For the month of June, the following activities have taken place: Direct Manufacturing Materials Purchased $300,000 Direct Materials Price Variance 10,000 unfavorable Direct Materials Efficiency Variance 15,000 favorable Direct Materials Flexible Budget Amount $305,000 Show the journal entries Waddell uses to record purchase and use of materials in June under a standard costing system.

4. Rose Corporation manufactured 30,000 hot water heaters during August. The variable overhead cost-allocation rate is $11.25 per machine-hour. The following variable overhead data pertain to August: Actual Budgeted Production output 30,000 units 24,000 units Machine-hours 15,000 hours 10,800 hours Variable overhead cost per machine-hour $ 11.00 11.25 Variable overhead cost $165,000 $121,500 Determine the variable overhead efficiency variance. Show all work in good form. efficiency variance ____________________

NAME ___________________________________ 5. Everjoice Company makes clocks. The fixed overhead costs budget for 2012 totals $720,000, occurring in equal amounts each month. The company uses direct labor hours for fixed overhead allocation and anticipates 240,000 hours during the year for a budget of 480,000 clocks. During the single month of June, 41,000 clocks were actually produced and $63,000 was actually spent on fixed overhead. Determine the fixed overhead spending variance and the production-volume variance for June fixed overhead. Show all work in good form. spending variance ____________________ production volume variance ____________________

6. Jung Construction makes separate journal entries for all cost accounting-related activities. It uses a standard cost system for all manufacturing items. For the second quarter of 2011, the following data has been compiled: Direct Manufacturing Labor Price Variance Direct Manufacturing Labor Efficiency Variance Direct Manufacturing Labor Payable $ 6,000 Favorable $ 4,000 Favorable $170,000

Show the journal entry Jung uses to record direct labor for the second quarter under a

standard costing system.

NAME_______________________________ 7. Tara Company reported: Actual variable overhead Variable Manufacturing Overhead Spending Variance Variable Manufacturing Overhead Efficiency Variance Variable Manufacturing Overhead Allocated $175,000 $ 30,000 favorable $ 5,000 unfavorable $200,000

Show the journal entries Waddell uses to record variable manufacturing overhead incurred and applied and the entry to record related variances.