(Done Paper) Referencing Styles : Harvard Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,00

//(Done Paper) Referencing Styles : Harvard Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,00

(Done Paper) Referencing Styles : Harvard Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,00

Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,000 Accounts receivable 100,000 Capital stock 400,000 Depreciation, factory 24,000 Retained earnings ? Inventories (5/31 & 6/30) &nbs … View More Russell Company has the following projected account balances for June 30, 20X5: Accounts payable $40,000 Sales $800,000 Accounts receivable 100,000 Capital stock 400,000 Depreciation, factory 24,000 Retained earnings ? Inventories (5/31 & 6/30) 180,000 Cash 56,000 Direct materials used 200,000 Equipment, net 240,000 Office salaries 80,000 Buildings, net 400,000 Insurance, factory 4,000 Utilities, factory 16,000 Plant wages 140,000 Selling expenses 60,000 Bonds payable 160,000 Maintenance, factory 28,000 Required: a. Prepare a budgeted income statement for June 20X5. (1 mark) b. Prepare a budgeted balance sheet as of June 30, 20X5 (1 mark) c. How do we use computer-based budgeting in sensitivity analysis? (1.5 marks) d. Explain how the choice of the type of responsibility center affects managers’ behaviour. (1.5 marks) QUESTION 2 (5 MARKS) The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year: Budgeted costs of the operating the plant for 10,000 to 20,000 hours: Fixed operating costs per year $240,000 Variable operating costs $10 per hour Practical capacity 20,000 hours per year Budgeted long-run usage per year: Lamp Division 800 hours × 12 months = 9,600 hours per year Flashlight Division 450 hours × 12 months = 5,400 hours per year Assume that practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Lamp Division was 700 hours and the Flashlight Division was 400 hours for the month of June. Required: (1 MARK EACH) a. If a single-rate cost-allocation method is used, what amount of operating costs will be budgeted for the Lamp Division each month? For the Flashlight Division each month? b. For the month of June, if a single-rate cost-allocation method is used, what amount of cost will be allocated to the Lamp Division? To the Flashlight Division? Assume actual usage is used to allocate operating costs. c. If a dual-rate cost-allocation method is used, what amount of operating costs will be budgeted for the Lamp Division each month? For the Flashlight Division each month? d. For the month of June, if a dual-rate cost-allocation method is used, what amount of cost will be allocated to the Lamp Division? To the Flashlight Division? Assume budgeted usage is used to allocate fixed operating costs and actual usage is used to allocate variable operating costs. e. Explain which method is the most practical? QUESTION 3 (5 MARK Read Less

Click to Download Solution

Purchase Solution $69

Loader Loading...
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download [20.34 KB]

By | 2018-08-25T20:31:34+00:00 August 25th, 2018|Business|0 Comments

About the Author:

Leave A Comment