Please assist with the following questions. Please show calculations where necessary.

Please assist with the following questions. Please show calculations where necessary.

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ACC 206 Week 4 Assignment: Chapter 6 and 7 Problems
Please complete the following exercises below in either Excel or a word document (but must be single
document). You must show your work where appropriate (leaving the calculations within Excel cells is
acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission
button.
Chapter 6 Problem 3
1. Comprehensive budgeting
The balance sheet of Watson Company as of December 31, 20X1, follows.
WATSON COMPANY
Balance Sheet
December 31, 12X1
Assets
Cash
$4,595
Accounts receivable
10,000
Finished goods (575 units x $7.00)
4,025
Direct materials (2,760 units x $0.50)
1,380
Plant & equipment
$50,00
0
Less: Accumulated depreciation
10,000
40,000
Total assets
$60,00
0
Liabilities & Stockholders’ Equity
Accounts payable to suppliers
$14,00
0
Common stock
$25,00
0
Retained earnings
21,000
46,000
Total liabilities &. stockholders’ equity
$60,00
0
The following information has been extracted from the firm’s accounting records:
1.
All sales are made on account at $20 per unit. Sixty percent of the sales are collected in the
month of sale; the remaining 40% are collected in the following month. Forecasted sales for the
first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units;
April, 2,000 units; May, 2,100 units.
2.
Management wants to maintain the finished goods inventory at 30% of the following month’s
sales.

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3.
Watson uses four units of direct material in each finished unit. The direct material price has been
stable and is expected to remain so over the next six months. Management wants to maintain the
ending direct materials inventory at 60% of the following month’s production needs.
4.
Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid
in the subsequent month.
5.
Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs $7.
Instructions:
a.
Rounding computations to the nearest dollar, prepare the following for January through March:
1) Sales budget
2) Schedule of cash collections
3) Production budget
4) Direct material purchases budget
5) Schedule of cash disbursements for material purchases
6) Direct labor budget
b.
Determine the balances in the following accounts as of March 31:
1) Accounts Receivable
2) Direct Materials
3) Accounts Payable
Chapter 7 Problem 1
2.
Basic flexible budgeting
Centron, Inc., has the following budgeted production costs:
Direct materials
$0.40 per unit
Direct labor
1.80 per unit
Variable factory overhead
2.20 per unit
Fixed factory overhead
Supervision
$24,000
Maintenance
18,000
Other
12,000

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