Question 20: (4 points)

multi 32

Exercise 9-3 Direct Materials Budget [LO4]
Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume
made by a small company in western Siberia. The cost of the musk oil is 200 roubles per
kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of
Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Year 2
Year
3
First Second Third Fourth First
Budgeted production, in
bottles
59,000 84,000 157,000 93,000 79,000


Musk oil has become so popular as a perfume ingredient that it has become necessary to
carry large inventories as a precaution against stock-outs. For this reason, the inventory of
musk oil at the end of a quarter must be equal to 15% of the following quarter's production
needs. Some 35,400 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the
bottom of your budget, show the amount of purchases in roubles for each quarter and for the
year in total. (Input all amounts as positive values. Round your answers to the nearest
whole number.)

Year 2
First Second Third Fourth Year
Production needsgrams
list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

string
: desired ending inventorygrams

list
2
1


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2
1


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2
1


list
2
1


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2
1

Total needsgrams
list
2
1


list
2
1


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2
1


list
2
1


list
2
1

string
: beginning inventorygrams

list
2
1


list
2
1


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2
1


list
2
1


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2
1

Raw materials to be purchased
grams

list
2
1


list
2
1


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2
1


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2
1


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2
1

Cost of raw materials to be purchased
list
2
1


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2
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2
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2
1





Question 21: (4 points)

multi 50

Exercise 9-7 Cash Budget [LO8]
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year.
Management has prepared the following summary of its budgeted cash flows:


1
st
Quarter 2
nd
Quarter 3
rd
Quarter 4
th
Quarter
Total cash receipts $ 197,000 $ 338,000 $ 216,000 $ 240,000
Total cash
disbursements
$ 260,000 $ 230,000 $ 214,000 $ 228,000


The company's beginning cash balance for the upcoming fiscal year will be $20,000. The
company requires a minimum cash balance of $10,800 and may borrow any amount needed
from a local bank at a quarterly interest rate of 1.2%. The company may borrow any amount
at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of
any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity,
assume that interest is not compounded.

Required:
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies,
repayments, interest, and total financing preceded by a minus sign when appropriate.
Enter all other amounts as positive values. Round interest amounts to the nearest whole
number. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$"
sign in your response.)

Garden Depot
Cash Budget

1
st
Quarter 2
nd
Quarter 3
rd
Quarter 4
th
Quarter Year
Cash balance,
beginning
$
list
2
$
list
2
$
list
2
$
list
2
$
list
2
1

1

1

1

1

Total cash
receipts

list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Total cash
available

list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Less total cash
disbursements

list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Excess
(deficiency)
of cash
available over
disbursements

list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Financing:
Borrowings
(at
beginnings
of quarters)

list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Repayments
(at ends of
quarters)

list
2

list
2

list
2

list
2

list
2
1

1

1

1

1

Interest
list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Total financing
list
2
1


list
2
1


list
2
1


list
2
1


list
2
1

Cash balance,
ending
$
list
2
1

$
list
2
1

$
list
2
1

$
list
2
1

$
list
2
1





Question 22: (4 points)

multi 8

Exercise 10-1 Prepare a Flexible Budget [LO1]
Puget Sound Divers is a company that provides diving services such as underwater ship
repairs to clients in the Puget Sound area. The company's planning budget for May appears
below:

Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 93
Revenue ($379 q) $ 35,247
Expenses:

Wages and salaries ($6,500 + $125
q)
18,125
Supplies ($3 q) 279
Equipment rental ($1,640 + $16 q) 3,128
Insurance ($2,480) 2,480
Miscellaneous ($630 + $2 q) 816
Total expense 24,828
Net operating income $ 10,419


Required:
During May, the company's activity was actually 107 diving-hours. Prepare a flexible budget
for that level of activity. (Input all amounts as positive values. Omit the "$" sign in your
response.)

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue $
list
2
1

Expenses:
Wages and salaries
list
2
1

Supplies
list
2
1

Equipment rental
list
2
1

Insurance
list
2
1

Miscellaneous
list
2
1

Total expense
list
2
1

Net operating income $
list
2
1





Question 23: (4 points)

multi 18

Exercise 10-2 Prepare a Report Showing Activity Variances [LO2]
Flight Caf is a company that prepares in-flight meals for airlines in its kitchen located next to
the local airport. The company's planning budget for July appears below:

Flight Caf
Planning Budget
For the Month Ended July 31
Budgeted meals (q) 18,500
Revenue ($6.4 q) $ 118,400
Expenses:
Raw materials ($1.9 q) 35,150
Wages and salaries ($3,900 + $0.1
q)
5,750
Utilities ($1,700 + $0.02 q) 2,070
Facility rent ($2,600) 2,600
Insurance ($1,850) 1,850
Miscellaneous ($570 + $0.2 q) 4,270
Total expense 51,690
Net operating income $ 66,710


In July, 19,000 meals were actually served. The company's flexible budget for this level of
activity appears below:

Flight Caf
Flexible Budget
For the Month Ended July 31
Budgeted meals (q) 19,000
Revenue ($6.4 q) $ 121,600
Expenses:
Raw materials ($1.9 q) 36,100
Wages and salaries ($3,900 + $0.1
q)
5,800
Utilities ($1,700 + $0.02 q) 2,080
Facility rent ($2,600) 2,600
Insurance ($1,850) 1,850
Miscellaneous ($570 + $0.2 q) 4,370
Total expense 52,800
Net operating income $ 68,800


Required:
Prepare a report showing the company's activity variances for July. (Leave no cells blank -
be certain to enter "0" wherever required. Input all amounts as positive values. Indicate
the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and
"None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Flight Caf
Activity Variances
For the Month Ended July 31

Activity Variances
Revenue $
list
2
1

string

Expenses:

Raw materials
list
2
1

string

Wages and
salaries

list string
2
1


Utilities
list
2
1

string

Facility rent
list
2
1

string

Insurance
list
2
1

string

Miscellaneous
list
2
1

string

Total expense
list
2
1

string

Net operating
income
$
list
2
string

1





Question 24: (4 points)

multi 18

Exercise 10-3 Prepare a Report Showing Revenue and Spending Variances [LO3]
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested
and sold 8,300 pounds of oysters in August. The company's flexible budget for August
appears below:

Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q) 8,300
Revenue (4.3 q) $ 35,690
Expenses:
Packing supplies (0.31 q) 2,573
Oyster bed maintenance (1,200) 1,200
Wages and salaries (2,250 +0.15 q) 3,495
Shipping (0.75 q) 6,225
Utilities (690) 690
Other (420 + 0.05 q) 835
Total expense 15,018
Net operating income $ 20,672


The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds 8,300
Revenue $ 39,200
Expenses:
Packing supplies 4,000
Oyster bed maintenance 1,100
Wages and salaries 3,740
Shipping 5,250
Utilities 630
Other 780
Total expense 15,500
Net operating income $ 23,700


Required:
Prepare a report showing the company's revenue and spending variances for August. (Input
all amounts as positive values. Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the
"$" sign in your response.)

Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31

Revenue and
Spending Variances
Revenue $
list
2
1

string

Expenses:
Packing
supplies

list
2
1

string

Oyster bed
maintenance

list
2
string

1

Wages and
salaries

list
2
1

string

Shipping
list
2
1

string

Utilities
list
2
1

string

Other
list
2
1

string

Total expense
list
2
1

string

Net operating
income
$
list
2
string

1




Question 25: (4 points)

multi 32

Exercise 10-4 Prepare a Flexible Budget Performance Report [LO4]
Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington
State that explosively erupted in 1982. Data concerning the company's operations in July
appear below:

Vulcan Flyovers
Operating Data
For the Month Ended July 31

Planning
Budget
Flexible
Budget
Actual
Budget
Flights (q) 52 51 51
Revenue ($327 q) $ 17,004 $ 16,677 $ 13,500
Expenses:
Wages and salaries ($3,100 +
$68 q)
6,636 6,568 8,230
Fuel ($21 q) 1,092 1,071 1,170
Airport fees ($635 + $36 q) 2,507 2,471 2,350
Aircraft depreciation ($5 q) 260 255 332
Office expenses ($177 + $1 q) 229 228 290
Total expense 10,724 10,593 12,372
Net operating income $ 6,280 $ 6,084 $ 1,128


The company measures its activity in terms of flights. Customers can buy individual tickets
for overflights or hire an entire plane for an overflight at a discount.

Required:
Prepare a flexible budget performance report for July. (Input all amounts as positive values.
Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of
each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance). Omit the "$" sign in your response.)

Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31

Activity Variances Revenue and Spending Variances
Revenue $
list
2
1

string

$
list
2
1

string

Expenses:



Wages and
salaries

list
2
1

string


list
2
1

string

Fuel
list
2
1

string


list
2
1

string

Airport fees
list
2
1

string


list
2
1

string

Aircraft
depreciation

list
2
1

string


list
2
1

string

Office
expenses

list
2
1

string


list
2
1

string

Total
expense

list
2
1

string


list
2
1

string

Net operating
income
$
list
2
1

string

$
list
2
1

string