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Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year

(2012). The practice is divide


Departmen
t

Quarter 1

Quarter 2

Quarter 3

Auditing

2,430

1,730

2,160

Tax

3,350

2,790

2,260

Consulting

1,720

1,720

1,720

Average hourly billing rates are: auditing $84, tax $93, and consulting $102.

Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year i

Q1
RATE

HRS
auditing
tax
consulting

2,430
3,350
1,720

TOTAL REV
84
204120
93
311550
102
175440
691110

GARZA AND NEELY, CPAs


Sales Revenue Budget
For the Year Ending December 31, 2012
hrs
auditing
tax
consulting

rate
8980
11230
6880

total
84
754320
93 1044390
102
701760
2500470

GARZA AND NEELY, CPAs


Sales Revenue Budget
For the Year Ending December 31,
Q2
HRS
RATE
1,730
84
2,790
93
1,720
102

012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are p

ONLY CHANGE NUMBERS IN YELLOW AREAS


Quarter 4

Rates
Auditing
Tax

2,660
2,830
1,720

Consulting

84
93
102

each quarter and the year in total, billable hours, billable rate, and total revenue.

NEELY, CPAs
ue Budget
Ending December 31, 2012
TOTAL REV
145320
259470
175440
580230

Q3
RATE

HRS
2,160
2,260
1,720

TOTAL REV
84
181440
93
210180
102
175440
567060

Q4
RATE

HRS
2,660
2,830
1,720

84
93
102

partment, by quarter, are provided below.

TOTAL REV
223440
263190
175440
662070

Stanton Company is planning to produce 1,400 units of product in 2012. Each unit requires 2.00 pounds of materials at $5.6
(a) Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead.

Direct Materials
Direct Labor
Overhead

rate
units
total
$ 11.20
1400
15680
$
6.80
1400
9520
4.76
1400
6664

(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)

Standard cost of one unit

22.76

pounds of materials at $5.60 per pound and a half-hour of labor at $13.60 per hour. The overhead rate is 70% of direct labor.

plied overhead.

ONLY CHANGE NUMBERS IN YELLOW AREAS


LBS
PRICE PER LB
HRS LABOR
2 $
5.60
0.5

% of direct labor.

LOW AREAS
RS LABOR

LABOR RATE
$ 13.60

UNITS
1400

In Harley Company it costs $31per unit ($18variable and $13fixed) to make a product that normally

Indicate the net income (loss) Harley would realize by accepting the special order.(If an amount reduc
reject
Revenues
Costs
shipping
income/loss

0
0
0
0
accepted

accept
83720
57960
3220
22540

net
83720
57960
3220
22540

product that normally sells for $44. A foreign wholesaler offers to buy3,220units at $26each. Harley will incur

er.(If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preced
ONLY CHANGE NUMBERS IN YELLOW AREAS
units
3220
price
26
shipping
1

each. Harley will incur special shipping costs of $1per unit. Assuming that Harley has excess operating capacity

a negative sign preceding the number e.g.-15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all o

ess operating capacity.

other amounts in all other columns as positive and subtract where necessary.)

Vintech Manufacturing incurs unit costs of $7($5variable and $2fixed) in making a subassembly part
Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part.(If an

variable manufacturing costs


fixed manufacturing costs
purchase price
total annual cost
decision:

make
55500
22200
0
77700
make the part

buy
0
22200
71040
93240

ng a subassembly part for its finished product. A supplier offers to make11,100of the part at $6.40per unit. If t

buying the part.(If an amount reduces the net income for Increase (Decrease) column then enter with a negativ
ONLY CHANGE NUMBERS IN YELLOW AREAS
net
variable
5
55500
fixed
2
0
buy
6.4
-71040
units
11100
-15540

t at $6.40per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.

n enter with a negative sign preceding the number e.g.-15,000 or parenthesis, e.g. (15,000). Enter all other am

00). Enter all other amounts in all other columns as positive and subtract where necessary.)

Ridley Company has a factory machine with a book value of $80,300 and a remaining useful life of 6 years. A new machine

Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net inc

variable manufacturing costs


new machine cost
total

retain
3523800
0
3523800

the old factory machine should be:

replaced

replace
2500800
197600
2698400

of 6 years. A new machine is available at a cost of $197,600. This machine will have a 6-year useful life with no salvage value. The new

ount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -1

net 6 yr
1023000
-197600
825400

ONLY CHANGE NUMBERS IN YELLOW AREAS


new
old
book value
197600
80300
salvage
0
0
variable costs
416800
587300

no salvage value. The new machine will lower annual variable manufacturing costs from $587,300 to $416,800.

eding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and

olumns as positive and subtract where necessary.)

unit cost
assembly
sales

unassembeled
60
0
130
70

assembled
60
42
170
68

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