Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 3E
Klein and Sachs, CPAs, budgeted for the following professional labor hours for the coming year: partners, 4,000; managers, 10,000; and staff, 25,000. Budgeted billing rates are: partners, $250 per hour; managers, $120 per hour; and staff accountants, $80 per hour.
Prepare a revenue budget for the year ending December 31, 2016.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Emmanuel Macron has the following budgeted business transactions for the month of May 2020: insurance refund received: $500; payments to be made to materials suppliers: $15,000; payments to be made to employees: $4,000; cash expected from customers: $25,000; budgeted depreciation charge on non-current assets: $800; budgeted interest paid to bank: $40; personal drawings: $2,000. At 1 May 2020, Emmanuel is budgeting an overdraft at the bank of $4,000. What is Emmanuel's budgeted cash position at the end of May 2020?
$340 overdrawn
$340 cash in the bank
$460 cash in the bank
$460 overdrawn
Major Landscaping Company is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected.
Clients usually pay 60% of their fee in the month that service is provided, 30% the month after, and 10% the second month after receiving service.
Actual service revenue for 2016 and expected service revenues for 2017 are: November 2016, $120,000; December 2016, $110,000; January 2017, $140,000; February 2017, $160,000; March 2017, $170,000.
Purchases on landscaping supplies (direct materials) are paid 40% in the month of purchase and 60% the following month. Actual purchases for 2016 and expected purchases for 2017 are:
December 2016, $21,000; January 2017, $20,000; February 2017, $22,000; March 2017, $27,000.
Instructions
Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total:
Expected…
Render Co. CPA is preparing activity-based budgets for 2019. The partners expect the firm to generate billable hours for the year as follows. Data entry . . . . . . . . . . . 2,200 hours Auditing 4,800 hours Tax 4,300 hours Consulting 750 hours The company pays $15 per hour to data-entry clerks, $30 per hour to audit personnel, $40 per hour to tax personnel, and $50 per hour to consulting personnel. Prepare a schedule of budgeted labor costs for 2019 using activity-based budgeting.
Chapter 9 Solutions
Principles of Cost Accounting
Ch. 9 - Give at least five examples of service...Ch. 9 - Prob. 2QCh. 9 - What factors help to explain the growth of service...Ch. 9 - What type of costing system do most service...Ch. 9 - What factors would you consider in deciding...Ch. 9 - Distinguish between a direct cost and an indirect...Ch. 9 - What are the elements of a cost performance...Ch. 9 - Prob. 8QCh. 9 - Why is it important for professional labor hours...Ch. 9 - Prob. 10Q
Ch. 9 - Explain how a budgeted income statement for a...Ch. 9 - What are the two main things that an...Ch. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Explain the concept of a cost/benefit decision and...Ch. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - Prob. 19QCh. 9 - Prob. 20QCh. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Prob. 23QCh. 9 - Prob. 24QCh. 9 - Compute the budgeted overhead rate for the coming...Ch. 9 - Compute the profit or loss on the job in (a)...Ch. 9 - Prepare a revenue budget for the year ending...Ch. 9 - Prepare a budgeted income statement for the month...Ch. 9 - Prepare a budgeted income statement for the month...Ch. 9 - Compute the budgeted overhead rates for each of...Ch. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Compute the budgeted overhead rates for each of...Ch. 9 - From the following list of performance measures,...Ch. 9 - Luxe Inc., a chain of gasoline service stations,...Ch. 9 - Basic Inc., a chain of gasoline service stations,...Ch. 9 - Categorize each of the following quality costs as...Ch. 9 - Prob. 1PCh. 9 - 1. Prepare a cost performance report. 2. Compute...Ch. 9 - 1. Prepare a revenue budget. 2. Prepare a...Ch. 9 - 1. Prepare an Overhead budget. 2. Prepare an Other...Ch. 9 - Using the information for Crable and Tesch, the...Ch. 9 - Compute the budgeted overhead rate for each of the...Ch. 9 - Compute the budgeted overhead rate for each of the...Ch. 9 - Prob. 8PCh. 9 - Prob. 9PCh. 9 - Prepare a balanced scorecard, without numbers, for...Ch. 9 - Prepare a balanced scorecard for Delhi Dairies,...Ch. 9 - Prob. 12PCh. 9 - Prob. 13PCh. 9 - Prob. 1MC
Additional Business Textbook Solutions
Find more solutions based on key concepts
Fundamental and Enhancing Characteristics. Identify whether the following items are fundamental characteristics...
Intermediate Accounting
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements Koontz Comp...
Introduction To Managerial Accounting
Analysis of inventory errors A2 Hallam Company’s financial statements show the following. The company recently ...
FINANCIAL ACCT.FUND.(LOOSELEAF)
Using the information from Problem 1-2B and the inventory information for the Best Bikes below, complete the re...
Managerial Accounting
Disposal of assets. Answer the following questions. 1. A company has an inventory of 1,300 assorted parts for a...
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following data were obtained from the financial records of Sonicbrush, Inc., for March: Sales are expected to increase each month by 15%. Prepare a budgeted income statement.arrow_forwardUsing the information for Crable and Tesch, the systems consultants in P9-3 and P9-4, prepare a budgeted income statement for the year ended December 31, 2016.arrow_forwardAt the beginning of the period, the Fabricating Department budgeted direct labor of 72,000 and equipment depreciation of 18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.arrow_forward
- Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)arrow_forwardFrank Flynn is the payroll manager for Powlus Supply Company. During the budgeting process, Sam Kinder, director of finance, asked Flynn to arrive at a set percentage that could be applied to each budgeted salary figure to cover the additional cost that will be incurred by Powlus Supply for each employee. After some discussion, it was determined that the best way to compute this percentage would be to base these additional costs of payroll on the average salary paid by the company. Kinder wants this additional payroll cost percentage to cover payroll taxes (FICA, FUTA, and SUTA) and other payroll costs covered by the company (workers compensation expense, health insurance costs, and vacation pay). Flynn gathers the following information in order to complete the analysis: Compute the percentage that can be used in the budget.arrow_forwardBickel Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November: Customers served Revenue ($3.60g) Expenses: Wages and salaries ($25,600+ $1.20g) Supplies ($0.50g) Insurance ($ 7,400) Miscellaneous expense ($6,200 + $0.40g) Total expense Net operating income. Customers served Revenue Expenses: Bickel Corporation Comparison of Actual Results to Planning Budget For the Month Ended November 30 Wages and salaries Supplies Insurance Miscellaneous expense Total expense Required: Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Bickel Corporation Flexible Budget Performance Report For the Month Ended November 30 Actual Results…arrow_forward
- Kelley and Wright, Attorneys, have the following budgeted items for the month of May: Fringe benefits $9,200 Depreciation equipment 5,000 Utilities 2,000 Professional salaries (from budget) 20,000 Travel 2,400 Revenues (from budget) 68,000 Lease expense 6,700 Secretarial support 5,600 Professional dues and subscriptions 3,800 Prepare a budgeted income statement for the month of May.arrow_forwardDinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 3,600 tenant-days, but its actual level of activity was 3,630 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: 01:08:33 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses Actual results for March: Variable Fixed element per month $ 0 element per tenant-day $34.50 $ 2,500 $ 7.50 1,500 14.00 8,000 3.00 6,500 0.60 $ 18,500 $ 25.10 Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses $ 121,234 $ 28,550 $ 53,125 $ 18,250 $ 7,095 The spending variance for food and supplies in March would be closest to: Multiple Choice karrow_forwardBramble Company expects to have a cash balance of $43,200 on January 1, 2022. Relevant monthly budget data for the first 2 months of 2022 are as follows. Collections from customers: January $81,600, February $144,000. Payments for direct materials: January $48,000, February $72,000. Direct labor: January $28,800, February $43,200. Wages are paid in the month they are incurred. Manufacturing overhead: January $20,160, February $24,000. These costs include depreciation of $1,440 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $14,400, February $19,200. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $11.520 in cash. Bramble Company has a line of credit at a local bank that enables it to borrow up to $24,000. The company wants to maintain a minimum monthly cash balance of $19,200. Prepare a cash budget for January and February.arrow_forward
- Dinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 3,600 tenant-days, but its actual level of activity was 3,630 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses Actual results for March: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses h Multiple Choice $805 F Fixed element per month A $ 0 $ 2,500 1,500 8,000 6,500 $ 18,500 The spending variance for food and supplies in March would be closest to: $ 121,234 $ 28,550 $ 53,125 $ 18,250 $ 7,095 Variable element per tenant-day $ 34.50 $ 7.50 14.00 3.00 0.60 $ 25.10 1 1 € O :arrow_forwardAt the beginning of the period, the Cutting Department budgeted direct labor of $54,060 and supervisor salaries of $47,590 for 3,180 hours of production. The department actually completed 3,500 hours of production. Determine the budget for the department assuming that it uses flexible budgeting.$______________arrow_forwardDinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 3,400 tenant-days, but its actual level of activity was 3,460 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses Actual results for March: Fixed Variable element per element per month tenant-day $0 $ 34.30 $ 2,300 $ 7.30 1,300 13.80 7,800 6,300 $ 17,700 2.80 0.40 $ 24.30 Revenue $ 115,625 Wages and salaries $ 28,530 Food and supplies $ 49,580 Facility expenses $ 16,500 Administrative expenses $ 7,093 The spending variance for facility expenses in March would be closest to:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY