Required information[The following information applies to the questions displayed below.]Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rentfor this service. For August 2022, Phoenix expects to find rerters for 100 apartments with an average first month's rent of$760. Budgeted cost data per tenant application for 2022 follow:Professional labor: 2.0 hours at $15.00 per hour..Credit checks: $53.00Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,600 permonth. On average, Phoenix is successful in placing one tenant for every three applicants.Actual rental applications in August 2022 were 270. Phoenix paid $9,300 for 480 hours of professional labor. Creditchecks went up to $58 per application. Other costs in August 2022 (lease, secretarial help. and utilities) were $3.900. Theaverage first monthly rentals for August 2022 were $860 per apartment unit for 90 units.Required:1. (a) What is the master budget variance for August 2022? (b) What is the total flexible budget variance for the month? (c) What is thesales volume variance for the month?2. Determine the professional labor rate and labor efficiency variances for August 2022.1a. The master budget variance1b. The total flexible budget variance1c. The sales volume variance2. Direct labor rate varianceDirect labor efficiency variance

Budgeting is the process of undertaking plans to spend money. This plan enables the business to…

Required: 1. (a) What is the master budget variance for August 2022? (b) What is the total flexible budget variance for the month? (c) What is the sales volume variance for the month? 2. Determine the professional labor rate and labor efficiency variances for August 2022.

Required: 1. (a) What is the master budget variance for August 2022? (b) What is the total flexible budget variance for the month? (c) What is the sales volume variance for the month? 2. Determine the professional labor rate and labor efficiency variances for August 2022.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter15: Working Capital Management

Section: Chapter Questions

Problem 10P: CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of...

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CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
Cost Identification and Analysis, Cost Assignment, Income Statement Melissa Vassar has decided to open a printing shop. She has secured two contracts. One is a 5-year contract to print a popular regional magazine. This contract calls for 5,000 copies each month. The second contract is a 3-year agreement to print tourist brochures for the state. The state tourist office requires 10,000 brochures per month. Melissa has rented a building for 1,400 per month. Her printing equipment was purchased for 40,000 and has a life expectancy of 20,000 hours with no salvage value. Depreciation is assigned to a period based on the hours of usage. Melissa has scheduled the delivery of the products so that two production runs are needed. In the first run, the equipment is prepared for the magazine printing. In the second run, the equipment is reconfigured for brochure printing. It takes twice as long to configure the equipment for the magazine setup as it does for the brochure setup. The total setup costs per month are 600. Insurance costs for the building and equipment are 140 per month. Power to operate the printing equipment is strongly related to machine usage. The printing equipment causes virtually all the power costs. Power costs will run 350 per month. Printing materials will cost 0.40 per copy for the magazine and 0.08 per copy for the brochure. Melissa will hire workers to run the presses as needed (part-time workers are easy to hire). She must pay 10 per hour. Each worker can produce 20 copies of the magazine per printing hour or 100 copies of the brochure. Distribution costs are 500 per month. Melissa will receive a salary of 1,500 per month. She is responsible for personnel, accounting, sales, and productionin effect, she is responsible for administering all aspects of the business. Required: 1. What are the total monthly manufacturing costs? 2. What are the total monthly prime costs? What are the total monthly prime costs for the regional magazine? For the brochure? 3. What are the total monthly conversion costs? Suppose Melissa wants to determine monthly conversion costs for each product. Assign monthly conversion costs to each product using direct tracing and driver tracing whenever possible. For those costs that cannot be assigned using a tracing approach, you may assign them using direct labor hours. 4. Melissa receives 1.80 per copy of the magazine and 0.45 per brochure. Prepare an income statement for the first month of operations.
Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month’s rent of $760. Budgeted cost data per tenant application for 2022 follow: Professional labor: 2.0 hours at $15.00 per hour Credit checks: $53.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,600 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,300 for 480 hours of professional labor. Credit checks went up to $58 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,900. The average first monthly rentals for August 2022 were $860 per apartment unit for 90 units. Required: 1. (a) What is the master budget variance for August…
Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month’s rent of $700. Budgeted cost data per tenant application for 2022 follow: Professional labor: 1.5 hours at $20.00 per hour Credit checks: $50.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,500 for 400 hours of professional labor. Credit checks went up to $55 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,600. The average first monthly rentals for August 2022 were $800 per apartment unit for 90 units. Part 1 (Static) Required: 1. (a) What is the master budget variance…
Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2019, Phoenix expects to find renters for 100 apartments with an average first month’s rent of $820. Budgeted cost data per tenant application for 2019 follow: Professional labor: 1.5 hours at $20.00 per hour Credit checks: $56.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,600 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2019 were 240. Phoenix paid $9,000 for 350 hours of professional labor. Credit checks went up to $60 per application. Other costs in August 2019 (lease, secretarial help, and utilities) were $3,700. The average first monthly rentals for August 2019 were $980 per apartment unit for 80 units. Required: 1. (a) What is the total operating income variance…
Given the information below, answer questions 1-3. • Assume you are working on budgeting for the room department of your hotel. • Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2019. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year. • Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $246,000 during 2019. For 2020, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2019. • Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2019. For 2020, this fixed cost will increase by 2% due to the expected increase in living expenses in this area. 1. What will be the budgeted ‘Room Revenue (Sales)’ for 2020 ($)? Note: The Answer field only accepts numbers. Thus, do not include $ or commas when you type your answer. Type your answer as a whole number (e.g., 200000).
A dermatology clinic expects to contract with an HMO for an estimated 80,000 enrollees. The HMO expects 1 in 4 of its enrolled members to use the dermatology services per month. At the end of the year, the dermatology clinic™s business manager looked at her monthly figures and saw that the number of enrolled members had increased by 5% over the budgeted amount, and that 1 in 3 of the total HMO members had used the dermatology services per month. Net monthly revenues of the dermatology clinic were budgeted at $260,000 but were actually $450,000. Monthly expenses for the clinic were budgeted at $200,000 but were actually $270,000. Prepare a monthly revenue, expense, and net income variance budget for the clinic. Are these variances favorable or unfavorable? Why?
Flexible Budgets and Operating Income Variances Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service.For August 2019, Phoenix expects to find renters for 100 apartments with an average first month’srent of $700. Budgeted cost data per tenant application for 2019 follow:∙ Professional labor: 1.5 hours at $20.00 per hour∙ Credit checks: $50.00Phoenix expects other costs, including the lease payment for the building, secretarial help, andutilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for everythree applicants.Actual rental applications in August 2019 were 270. Phoenix paid $9,500 for 400 hours of professional labor. Credit checks went up to $55 per application. Other costs in August 2019 (lease,secretarial help, and utilities) were $3,600. The average first monthly rentals for August 2019 were$800 per apartment unit for 90 units.[LO 14-3, 14-5][LO 14-2, 14-3,…
The company has decided that security light’s (new Product) selling price of product is £750 oer unit, total sales - 1500 units total budgeted sales is: November- 500 units, December 500 units and January 500 units. The company has just concluded a deal to get a bank loan of £19,000 on the 1st November 2022. The interest on this loan will be paid every month. The company will be required to make 12 equal payments to repay the loan starting from the end of December. From their costs estimates, total fixed cost estimated to be £110,200 and it will be shared equally throughout the period. The variable cost is £230 per unit. The fixed costs are for the whole period, so they are not affected by the level of service. However, the variable costs will increase with services output (ie sales output multiplied with variable cost per product). Variable cost will be paid on the basis of 60% in the month of purchase and 40% the following month. Similarly, revenue from the sale of new security light…
A real estate office handles a 40-unit apartment complex. When the rent is $540 per month, all units are occupied. For each $40 increase in rent, however, an average of one unit becomes vacant. Each occupied unit requires an average of $65 per month for services and repairs. What rent should be charged to obtain a maximum profit.
Gibco Service has budgeted the following time-and-material for 2019: Budgeted Costs For 2019 Time Material Charges Charges Painters' wages and benefits $54,000 Service manager's salary and benefits $44,000 Office employee's salary and benefits 7,400 6,000 Cost of paint 50,000 Overhead (supplies, utilities, etc.) 14,000 22,000 Gibco budgets 2,000 hours of paint time in 2019 and will charge a profit of $8 per hour on the labour rate, in addition to a 12% mark-up on the cost of paint. On February 15, 2019, Gibco is asked to prepare a price estimate to paint a building. Gibco estimates that this job will take 25 labour hours and $900 in paint. 1.Calculate the material loading charge rate % for 2019 2. What is the planned profit for the year? Do not enter $ or commas.