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    Here is partially completed comparative balance sheet for Snow Cones Company for the year ended December 31, 20X2.

    SNOW CONES COMPANY - Comparative Balance Sheets

    20X2 20X2 Percentage
    Assets Actual Budgeted Variance Variance

    Cash $7,500 $7,800 (a) (3.85%)
    Accounts Recievable 9,200 9,000 200 2.22%
    Inventory 1,000 720 280 (b)
    _______ _______ ______ _______

    Current Assets $17,700 $17,520 $ 180 1.03%

    Equipment (net) (c) 11,000 1,000 9.09%

    Total Assets:
    $29,700 (d) 1,180 4.14%
    _______ ________ ______ _______

    Liabilities&Owners'Equity

    Accounts Payable $3,000 $2,500 $500 20.00%
    _______ ________ ______ _______

    Long-term Note Payable 1,000 (e) (1,000) (50.00%)

    Common Stock 20,000 17,000 3,000 17.65%
    Retained Earnings 5,700 7,020 (1,320) (g)
    _______ ________ ______ _______

    Total Liabilities&Owners'Eq:

    $29,000 (f) $1,180 4.14%

    ___________________________________________________________

    Compute the following missing amounts :

    a) Cash variance (in dollars)
    b) Inventory percentage variance
    c) 20X2 actual equipment (net) balance
    d) 20X2 budgeted total assets
    e) 20X2 budgeted long-term note payable
    f) 20X2 budgeted total liabilities and owner's equity
    g) 20X2 retained earnings percentage variance

    ..................................................................................................................

    Glenn Martin is the owner of the GM Car Wash. The company sells car washes for $10. The variable cost (water, soap, and labor) per wash is $4. The company incurs $100,000 of fixed costs per year. The company expects to deliver 25,000 washes in the coming year :

    a) Based on these data, prepare a static budget for the coming year.
    b) How wouls net income differ if 15,000 washes were delivered ?
    c) How would net income differ if 30,000 washes were delivered ?

    Speedy Sandwich Shoppe delivers box lunches to busy executives in a major metropolitan area. Speedy has prepared the following projections for its business for June 20X2 :

    Budgeted number of meals : 10,000
    Budgeted average price per meal : $12
    Budget variable costs per meal : $5
    Budgeted annual fixed costs : $50,000

    a) Compute budgeted contribution margin
    b) Compute budgeted net income.
    c) Prepare a flexible budget for sales of 8,000; 12,000; and 15,000 box lunches. d) How does net income change from the static budget ?

    ..................................................................................................................

    Professional Uniform Company sells uniforms to various food service companies. Here are the actual and budgeted results for a recent year :

    Actual number of uniforms sold : 10,000
    Budgeted number of uniforms to be sold : 11,000
    Actual average variable cost per uniform : $20
    Budgeted average variable cost per uniform : $18

    Compute the following :

    a) Total variable cost variance
    b) Variable cost price variance
    c) Variable cost volume variance

    ..................................................................................................................

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    Solution Preview

    Here is partially completed comparative balance sheet for Snow Cones Company for the year ended December 31, 20X2.

    SNOW CONES COMPANY - Comparative Balance Sheets

    20X2 20X2 Percentage
    Assets Actual Budgeted Variance Variance

    Cash $7,500 $7,800 (a) (3.85%)
    Accounts Recievable 9,200 9,000 200 2.22%
    Inventory 1,000 720 280 (b)
    _______ _______ ______ _______

    Current Assets $17,700 $17,520 $ 180 1.03%

    Equipment (net) (c) $11,000 1,000 9.09%

    Total Assets: $29,700 (d) 1,180 4.14%
    _______ ________ ______ _______

    Liabilities&Owners'Equity

    Accounts Payable $3,000 $2,500 $500 20.00%
    _______ ________ ______ _______

    Long-term Note Payable $1,000 (e) (1,000) (50.00%)

    Common Stock $20,000 $17,000 $3,000 17.65%
    Retained Earnings $5,700 $7,020 (1,320) (g)
    _______ ________ ______ _______

    Total Liabilities&Owners'Eq: $29,000 (f) $1,180 4.14%

    ___________________________________________________________

    Compute the following missing amounts :

    a) Cash variance (in dollars)

    Actual - Budgeted = variance
    7,500 - 7,800 = (300)

    b) Inventory percentage variance

    Percentage variance = Variance/Budgeted
    = 280/720
    = 38.88%

    c) 20X2 actual equipment (net) balance

    Actual - Budgeted = ...

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