Description
Please find all instructions inside the attached files.Homework Assignment 2 is worth 15%. Deadline: end of day, Tuesday, December 19.It’s a group project (up to 3 students per group). Please enroll yourself in one of the available Groups.Solutions for exercises must be done in MS Excel.Please submit the excel file on the Blackboard.
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Homework Assignment 2 (20%)
Exercise 1. Mandall Company is a merchandising company that sells a single product. The
company provided the budgeted sales in units for the next fourth quarter:
Budgeted unit Sales
October
20,000 units
November
30,000 units
December
25,000 units
Selling price is $50 per unit. Mandall Company expects to collect 30% of a month’s sales in the
month of sale, 60% in the month following sale, and 10% are uncollectable. The beginning balance
of accounts receivable, all of which is expected to be collected in October is $90,000.
Required: Prepare the schedule of expected cash collections from sales by month and in total for
the fourth quarter.
Homework Assignment 2 (20%)
Exercise 2. Almana Hospital uses patient-visits as its measure of activity. The hospital has
provided the following report:
Almana Hospital
Comparison of Actual Results to Planning Budget
For the Month Ended May 31
Patient-visits (q)
Revenue
($36.40q)
Expenses:
Personnel
expenses
($20,400 +
$10.40q)
Medical
supplies ($1,100
+ $6.60q)
Occupancy
expenses ($6,400
+ $1.50q)
Administrative
expenses ($2,400
+ $0.40q)
Total expense
Net operating
income
Actual
Results
Planning
Budget
2,000
2,300
$76,110
$83,720
43,240
44,320
13,990
16,280
9,800
9,850
3,080
3,320
70,110
73,770
$6,000
$9,950
Flexible Budget
Variances
Required:
a) Prepare a flexible budget.
b) Prepare a report showing the hospital’s revenue and spending variances for May.
c) Label each variance as favorable (F) or unfavorable (U). Fill in the last column of the table
above.
Homework Assignment 2 (20%)
Exercise 3. Zee Corporation has developed the following cost standards for the production of
its leather backpacks:
Leather (0.9 yards × $22 per yard)
Direct labor (1.3 hours × $9.00 per hour)
The actual results for last month were as follows:
Number of backpacks produced
Direct labor hours incurred
15,000
18,800
Yards of leather used in production
Cost of leather purchased
Direct labor cost
14,100
$306,675
$159,800
Required:
Compute the following variances for Zee.
a. Materials price variance.
b. Materials quantity variance.
c. Labor efficiency variance.
d. Labor rate variance.
Standard Cost Per Backpack
$19.80
$11.70
Homework Assignment 2 (20%)
Exercise 4. The following information relates to Marter Manufacturing Corporation for next year:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Expected
sales (in 220,000
units)
Desired
ending
finished
goods
29,800
inventory
(in
units)
230,000 160,000 180,000
32,300
38,000
35,000
Beginning balance of Quarter 1 inventory is 37,100 units.
Required: Prepare the production budget by quarter and in total for the year.
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