Pblem 6-27 (Part Level Submission)
Barnes Entertainment Corporation prepared a master budget for the month of November that was based on sales of 159,100 board games. The budgeted income statement for the period is as follows.
Sales Revenue $2,545,600
Variable expenses
Direct materials $700,040
Direct labor 381,840
Variable overhead 493,210
Total variable expenses 1,575,090
Contribution margin 970,510
Fixed overhead 258,100
Fixed selling and administrative expenses 504,300
Total fixed expenses 762,400
Operating income $208,110
During November, Barnes produced and sold 187,900 board games. Actual results for the month are as follows.
Sales Revenue $2,995,000
Variable expenses
Direct materials $813,060
Direct labor 467,460
Variable overhead 593,490
Total variable expenses 1,874,010
Contribution margin 1,120,990
Fixed overhead 274,300
Fixed selling and administrative expenses 504,300
Total fixed expenses 778,600
Operating income $342,390
arning
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(a) Prepare a flexible budget for November. (Round unit answers to 2 decimal places, e.g. 5.25 & all other answers to 0 decimal places, e.g. 125.)
(b) Calculate Barnes’s static budget variance for November. (Round answers to 0 decimal places, e.g. 125. Enter all variance amounts as positive values. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
Actual Results Static Budget Variance Static Budget
The parts of this question must be completed in order. This part will be available when you complete the part above.
Pblem 5-31 (Part Level Submission)
Strum Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Claire Strum, the company’s sales manager, prepared the following sales forecast for 2015. The forecasted sales prices include a 5 percent increase in the acoustic guitar price and a 10 percent increase in the electric guitar price, to cover anticipated increases in raw materials prices.
Sales Price 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Acoustic guitar sales $1,450 400 580 370 600
Electric guitar sales $2,690 200 100 120 150
Prepare Strum’s sales budget for 2015.
Sales Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual
On December 31, 2014, Strum had 60 acoustic guitars in stock—fewer than the desired inventory level of 80 guitars, based on the following quarter’s sales. The company has budgeted for sales of 500 acoustic guitars in the first quarter of 2016. Strum wants to maintain an ending inventory equal to 20 percent of the following quarter’s sales. Prepare the 2015 production budget for acoustic guitars.
Production Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual
Budgeted ending inventoryTotal units requiredBudgeted productionBeginning inventoryBudgeted unit sales
Budgeted productionBudgeted unit salesTotal units requiredBudgeted ending inventoryBeginning inventory
Beginning inventoryBudgeted ending inventoryTotal units requiredBudgeted unit salesBudgeted production
Beginning inventoryTotal units requiredBudgeted productionBudgeted ending inventoryBudgeted unit sales
Budgeted unit salesTotal units requiredBudgeted ending inventoryBudgeted productionBeginning inventory
(c) The parts of this question must be completed in order. This part will be available when you complete the part above.
