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    Cost Accounting Budgeted Data

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    #1 The following budgeted and actual data are for the operations of the All-Fixed Company.
    All-fixed uses budgeted production as the denominator level and writes off any production
    volume variance to cost of goods sold.

    2008 2009
    Sales 10,000 tons 10,000 tons
    Production 20,000 tons 0 tons
    Selling Price 30 per ton $30 per tons
    Cost(all fixed):
    Manufacturing 280,000 280,000
    Operating (non-manufacturing) 40,000 40,000

    1. Prepare income statement with one column for 2008, one column for 2009, and one column
    for the two years together, using (a) variable costing and (b) absorption costing.

    2. What is the breakeven point under(a) variable costing and (b) absorption costing?
    3. What inventory costs would be carried in the balance sheet on December 31, 2008 and 2009
    under each method?
    4. Assume that the performance of the top manager of the company is evaluated and rewarded
    largely on the basis of reported operating income. Which costiong method would athe manager prefer, why?

    #2. Variance anallysis, sales-mix and Sales-auantity variance

    Aussie infornautic markets three different handheld Windows CE - compatible organizer.
    Aussie Infonautics markets three different handheld models. PalmPro is a souped-up version for the executive on the go
    Palm CE is a consumer-oriented version; and PalmKid is a stripped-down version for the young adult market.
    You are Aussue Infonautics' senior vice president og marketing. The CEO has discovered that the total contribution margin
    came in lower than budgeted, and it is your responsibility to explain to him why actual resultd are different
    from the budget. Budgeted and actual operating data for the company's third quarter of 2010b are as follow:

    Selling price Variable cost per unit Contribution Margin per unit Sales Volume in Unit
    PalmPro $379 $182 $197 12,500
    PalmCE 269 98 171 37,500
    PalmKid 149 65 84 50,000
    100,000

    Actual Operating Date, Third Quarter 2010

    Selling price Variable cost per unit Contribution Margin per unit Sales Volume in Unit
    PalmPro $349 $178 $171 11,000
    PalmCE 285 92 193 44,000
    PalmKid 102 73 29 55,000
    110,000
    Required:
    1 Compute the actual and budgeted contribution margins in dollars for each product and total for the third quarter 2010
    2 Calculate the actual and budgeted sales-mix for the three products for the third quarter of 2010
    3 Calculate total sales-volume, sales-mix, and sales quantity variances for the third quarter of 2010.
    (Calculate all variances in terms of contribution margin).
    4 Given that your CEO is known to have temper tantrums, you want to be well prepared for this meeting.
    In order to be prepare, write a paragraph or two comparing actual results to budgeted amounts.

    #3. Market share and market-size variances (continuationof #2)
    Aussie infomautics senior vice president of marketing prepared his budget at the beginning of the third quarter
    assuning a 25% market share based on total sales. The total handheld-organizer market was estimated by
    Foolinstead Research to reach sales pf 400,000 units worldwide in the third quarter. However, actual sales in
    the third quarter were 500,000 units.
    Required:
    1 Calculate the market-size variances for Ausssie Infonautics in the third quarter of 2010
    (calculate all variances in terms of contribution margins).

    2 Explain what happened based on the market-size variances.
    3 Calculate the actual market size, in units, that would have led to no market-size variance
    (again using budgeted contribution margin per unit). Use this market-size figure to calculate the actual
    market share that would have led to a zero market-share variance

    © BrainMass Inc. brainmass.com October 10, 2019, 3:04 am ad1c9bdddf
    https://brainmass.com/business/accounting/cost-accounting-budgeted-data-405927

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    #1 The following budgeted and actual data are for the operations of the All-Fixed Company.
    All-fixed uses budgeted production as the denominator level and writes off any production
    volume variance to cost of goods sold.

    2008 2009
    Sales 10,000 tons 10,000 tons
    Production 20,000 tons 0 tons
    Selling Price 30 per ton $30 per tons
    Cost(all fixed):
    Manufacturing 280,000 280,000
    Operating (non-manufacturing) 40,000 40,000

    1. Prepare income statement with one column for 2008, one column for 2009, and one column
    for the two years together, using (a) variable costing and (b) absorption costing.

    All-Fixed Company
    Variable Costing Income Statement
    For the years ended December 31, 2008 and 2009

    2008 2009 Total
    Sales 300,000 300,000 600,000
    Less: Variable expenses
    Beginning inventory - - -
    Add: Variable manufacturing costs - - -
    Goods available for sale - - -
    Less: Ending inventory - - -
    Variable costs of goods sold - - -
    Variable selling and administrative expenses - - -
    Contribution margin 300,000 300,000 600,000
    Less: Fixed expenses
    Fixed manufacturing expenses 280,000 280,000 560,000
    Fixed operating expenses 40,000 40,000 80,000
    Net operating income (20,000) (20,000) (40,000)

    All-Fixed Company
    Absorption Costing Income Statement
    For the years ended December 31, 2008 and 2009

    2008 2009 Total
    Sales 300,000 300,000 600,000
    Less: Cost of goods sold
    Beginning inventory - 140,000 -
    Add: Cost of goods manufactured 280,000 280,000 ...

    Solution Summary

    Cost accounting budgeted data are examined.

    $2.19