Professional Documents
Culture Documents
Submitted To:
Sheikh Mohammad Rabby [Rby]
Faculty Member
Department of Accounting & Finance
North South University
Submitted By:
SL. Name ID:
01 Syed Atabur Rahman Tuhin 1420296030
02 Nazia Ahmad 1230847030
03 Humayun Kabir 1411281030
04 Riasat Bin Mohsin 1330173030
05 Tanvir Jubair 1410483030
Submission Date: 16/08/2015.
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Table of Content
No. Titles: #Page Number:
01 Introduction #1
02 Questionnaire # [3-4]
Solution # [5-9]
Questionnaire # 10
03
Solution # [11-13]
04 Conclusion # 14
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PROBLEM No-1
CASE 831: Master Budget with Supporting Schedules
You have just been hired as a new management trainee by Earrings
Unlimited, a distributor of earrings to various retail outlets located in
shopping malls across the country. In the past, the company has done very
little in the way of budgeting and at certain times of the year has
experienced a shortage of cash.
Since you are well trained in budgeting, you have decided to prepare
comprehensive budgets for the upcoming second quarter in order to show
management the benefits that can be gained from an integrated budgeting
program. To this end, you have worked with accounting and other areas to
gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same price
$10 per pair. Actual sales of earrings for the last three months and
budgeted sales for the next six months follow (in pairs of Earnings):
The concentration of sales before and during May is due to Mothers Day.
Sufficient inventory should be on hand at the end of each month to supply
40% of the earrings sold in the following month.
Required:
Prepare a master budget for the three-month period ending June 30. Include
the following detailed budgets:
1. a) A sales budget, by month and in total.
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# Sales Budgets:
Requirement No:- 2:
#Cash Budgets:
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Earrings Unlimited
Cash Budgets
For the Quarter Ending in June 30
Requirement No:- 3:
Earrings Unlimited
Budgeted Income Statement [Contribution Approach]
For the Quarter Ending in June 30
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Requirement No:-4:
Earrings Unlimited
Budgeted Balance Sheet
for the Quarter Ending in June 30
Adjustments:
#1-Accounts Receivables at June 30
PROBLEM No-2
Exercise 109: Comprehensive Variance Analysis
Marvel Parts, Inc. manufactures auto accessories. One of the companys
products is a set of seat covers that can be adjusted to fit nearly any small
car. The company has a standard cost system in use for all of its products.
According to the standards that have been set for the seat covers, the
factory should work 2,850 hours each month to produce 1,900 sets of covers.
The
During August, the factory worked only 2,800 direct labor-hours and
produced 2,000 sets of covers. The following actual costs were recorded
At standard, each set of covers should require 5.6 yards of material. All of the
materials purchased during the month were used in production.
Required:
** Compute the following variances for August:
Total Variance
Here,
$800
AQ= Actual Quantity
AP= Actual Price [Unfavorable]
SP= Standard Price
SQ= Standard Quantity
#Calculation:
1) AP= 45,600 12,000
= $3.8
2) SP= $22.40 5.6 Yards
= $4 Per Yard
3) SQ= 2,000 sets 5.6 yards
= 11,200 Yards
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Requirement No:-2:
Total Variance
Here,
$200
AH= Actual Hour
AR= Actual Rate [Unfavorable]
SR= Standard Rate
SH= Standard Hour
#Calculation:
1) AR= 18,200 2,800
= $6.5 Per Hour
2)SH Per Set= [2,850 SH 1,900 Set]
= 1.5 SH per Set
3) SR= $9 1.5
= $6 Per Hour
4) SH= 2,000 sets 1.5 SH Per Set
= 3,000 Hours
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Requirement No:-3:
Total Variance
Here,
$200
AH= Actual Hour
AR= Actual Rate [Favorable]
SR= Standard Rate
SH= Standard Hour
#Calculation:
1) AR= 7,000 2,800
= $2.5 Per Hour
2)SH Per Set= [2,850 SH 1,900 Set]
= 1.5 SH per Set
3) SR= $3.60 1.5
= $2.4 Per Hour
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Appendix: