LATIHAN SOAL

MASTER BUDGETING
The Fraley Company, a merchandising firm, has planned the following sales for the next four
months:
March April May June
Total budgeted sales $50,000 $70,000 $90,000 $60,000
Sales are made 40% for cash and 60% on account. From experience, the company has learned
that a month’s sales on account are collected according to the following pattern:
Month of sale 70%
First month following month of sale 20%
Second month following month of sale 8%
Uncollectible 2%
The company requires a minimum cash balance of $4,000 to start a month.
Required:
a. Compute the budgeted cash receipts for June.
b. Assume the following budgeted data for June:
Purchases $52,000
Selling and administrative expenses $10,000
Depreciation $ 8,000
Equipment purchases $15,000
Cash balance, beginning of June $ 6,000
Using this data, along with your answer to part (1) above, prepare a cash budget in good form
for June. Clearly show any borrowing needed during the month. The company can borrow in
any dollar amount, but will not pay any interest until the following month.

VARIABLE COSTING
ITALIA Turner Corporation produces a single product. Data concerning the company's
operations last year appear below:
Units in beginning inventory 0
Units produced 2,000
Units sold 1,900
Selling price per unit $ 100
Variable costs per unit:
Direct materials $ 30
Direct labor $ 10
Variable manufacturing overhead $5
Variable selling and administrative $ 2
Fixed costs in total:
Fixed manufacturing overhead $ 40,000
Fixed selling and administrative $ 60,000
Assume direct labor is a variable cost.
Required:
a. Compute the unit product cost under both absorption and variable costing.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Prepare a report reconciling the difference in net operating income between absorption
and variable costing for the year.
COST-VOLUME-PROFIT RELATIONSHIPS
Parkins Company produces and sells a single product. The company's income statement for
the most recent month is given below:
Sales (6,000 units at $40 per unit) $ 240,000
Less manufacturing costs:
Direct materials $ 48,000
Direct labor (variable) 60,000
Variable factory overhead 12,000
Fixed factory overhead 30,000 150,000
Gross margin 90,000
Less selling and other expenses:
Variable selling and other expenses 24,000
Fixed selling and other expenses 42,000 66,000
Net operating income $ 24,000
There are no beginning or ending inventories.
Required:
a. Compute the company's monthly break-even point in units of product.
b. What would the company's monthly net operating income be if sales increased by 25%
and there is no change in total fixed expenses?
c. What dollar sales must the company achieve in order to earn a net operating income of
$50,000 per month?
d. The company has decided to automate a portion of its operations. The change will reduce
direct labor costs per unit by 40 percent, but it will double the costs for fixed factory
overhead. Compute the new break-even point in units.