Problem I
Part A -
Singller Inc., budgeted sales of 30,000 units of its product in January, 2016. Budgeted inventory balances are:
January 1 January 31
Finished Goods (units) 6,500 5,600
Required:
What is the expected production in units for January, 2016?
Part B
Pynchon Enterprises expects to make the following sales revenue in the first quarter of the calendar year 2016 as follows:
January February March
Sales $180,000 $135,000 $162,000
25% of the sales are on account (accounts receivable), while the other 75% are for cash. The collection pattern for Pynchon's accounts receivable follows:
Collections for:
Current month's credit sales........... 50%
First month after credit sales.......... 30%
Second month after credit sales..... 18%
Uncollectible Accounts Receivable..2%
Required:
How much will the expected cash receipts amount to for the month of March, 2016?
Part C
Poe Corporation had budgeted operating income for 2015 of $6,300,000. The actual operating income was $6,556,000. The flexible-budget operating income was $6,930,000.
Required:
1. Calculate the total static-budget variance.
2. Calculate the total flexible-budget variance.