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Accounting
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21 Feb 2020

To prepare a sales budget there is no need for budgeted no. of units to be sold. True or False?

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Sixta Kovacek
Sixta KovacekLv2
21 Feb 2020
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Related questions

The Matrix Company budgeted its sales for the coming year at240,000 units. Expected production costs are (per unit): materials,$50; direct labor, $30; and variable overhead, $17. Fixed overheadis budgeted at $1,680,000 and is to be applied to production usinga fixed overhead rate based on expected activity. There is no workin process inventory (actual or budgeted). Finished goods inventoryat the beginning of the year consists of 96,000 units on hand andbudgeted end-of-year inventory is 24,000 units.

(A) Prepare a production budget in units.

(B) Compute the total budgeted cost of production for the comingyear.

Problem 16-51 Sales Activity Variance (LO 16-3)

Odessa, Inc., reports the following information concerningoperations for the most recent month:

Actual (based on actual of 540 units) Master Budget (based on budgeted 600 units)
Sales revenue $ 94,300 $ 102,000
Less
Manufacturing costs
Direct labor 13,034 13,800
Materials 12,490 14,400
Variable overhead 7,850 9,600
Marketing 5,140 5,820
Administrative 4,200 4,200
Total variable costs $ 42,714 $ 47,820
Contribution margin $ 51,586 $ 54,180
Fixed costs
Manufacturing 4,665 4,800
Marketing 9,984 9,600
Administrative 9,563 9,600
Total fixed costs $ 24,212 $ 24,000
Operating profits $ 27,374 $ 30,180

There are no inventories.

Required:

Prepare a sales activity variance analysis for Odessa, Inc.(Do not round intermediate calculations. Indicate theeffect of each variance by selecting "F" for favorable, or "U" forunfavorable. If there is no effect, do not select eitheroption.)

ODESSA, INC.
Sales Activity Variance
Flexible Budget (based on actual of 540 units) Sales Activity Variance Master Budget (based on budgeted 600 units)
Sales revenue $102,000
Variable costs:
Manufacturing costs:
Direct labor 13,800
Materials 14,400
Variable overhead 9,600
Marketing 5,820
Administrative 4,200
Total variable costs $0 $47,820
Contribution margin $0 $54,180
Fixed costs:
Manufacturing 4,800
Marketing 9,600
Administrative 9,600
Total fixed costs $0 $24,000
Operating profits $0 $30,180

Zetrov Company:

The cash budget for March shows an ending bank loan of $10,000and an ending cash balance of $50,000.

The sales budget for March indicates sales of $140,000. Accountsreceivable are expected to be 70% of the current-month sales.

The merchandise purchases budget indicates that $89,000 inmerchandise will be purchased on account in March. Purchases onaccount are paid 100% in the month following the purchase. Endinginventory for March is predicted to be 600 units at a cost of $35each.

The budgeted income statement for March shows net income of$48,000. Depreciation expense of $1,000 and $26,000 in income taxexpense were used in computing net income for March. Accrued taxeswill be paid in April.

The balance sheet for February shows equipment of $84,000 withaccumulated depreciation of $46,000, common stock of $25,000, andending retained earnings of $8,000. There are no changes budgetedin the equipment or common stock accounts.

Prepare a budgeted balance sheet for March.

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