亨格瑞管理会计英文第15版练习答案07

CHAPTER 7

COVERAGE OF LEARNING OBJECTIVES

CHAPTER 7

Introduction to Budgets and Preparing the Master Budget

7-A1 (60-90 min.)

1. Exhibit I

RAPIDBUY ELECTRONICS, INC.

Mall of America Store

Budgeted Income Statement

For the Three Months Ending August 31, 20X8

Sales $300,000

Cost of goods sold (.62 × $300,000) 186,000

Gross profit $114,000 Operating expenses:

Salaries, wages, commissions $60,000

Other expenses 12,000

Depreciation 1,500

Rent, taxes and other fixed expenses 33,000 106,500

Income from operations. $ 7,500 Interest expense* 1,338

Net income $ 6,162

* See schedule g for calculation of interest.

Exhibit II

RAPIDBUY ELECTRONICS, INC.

Mall of America Store

Cash Budget

For the Three Months Ending August 31, 20X8

JuneJulyAugust

Beginning cash balance $ 5,800 $ 5,600 $ 5,079 Minimum cash balance desired 5,000 5,000 5,000

(a) Available cash balance $ 800$ 600$ 79

Cash receipts & disbursements:

Collections from customers

(schedule b) $ 75,200 $121,400 $ 90,800 Payments for merchandise

(schedule d) (86,800) (49,600) (49,600) Fixtures (purchased in May) (11,000) - - Payments for operating

expenses (schedule f) (44,600) (30,200) (30,200)

(b) Net cash receipts & disbursements $(67,200) $ 41,600 $ 11,000

Excess (deficiency) of cash before

financing (a + b) (66,400) 42,200 11,079

Financing:

Borrowing, at beginning of period $ 67,000 $ - $ - Repayment, at end of period - (41,000) (10,000) Interest, 10% per annum - (1,121)* (217)*

(c) Total cash increase (decrease)

from financing $ 67,000$(42,121)$(10,217) (d) Ending cash balance (beginning

balance + b + c) $ 5,600$ 5,079$ 5,862 * See schedule g

Exhibit III

RAPIDBUY ELECTRONICS, INC.

Mall of America Store

Budgeted Balance Sheet

August 31, 20X8

Assets Liabilities and Owners’ Equity

Cash (Exhibit II) $ 5,862 Accounts payable $ 37,200 Accounts receivable* 86,400 Notes payable 16,000** Merchandise inventory 37,200 Total current liabilities $ 53,200 Total current assets $129,462

Net fixed assets: Owners' equity:

$33,600 less $102,200 plus net

depreciation of $1,500 32,100 income of $6,162 108,362 Total assets $161,562 Total equities $161,562 *July sales, 20% × 90% × $80,000 $ 14,400

August sales, 100% × 90% × $80,000 72,000

Accounts receivable $86,400

** See schedule g

JuneJulyAugustTotal

Schedule a:Sales Budget

Credit sales (90%) $126,000 $72,000 $72,000 $270,000

Cash sales (10%) 14,000 8,000 8,000 30,000

Total sales (to Exhibit I) $140,000$80,000$80,000$300,000

Schedule b: Cash Collections

JuneJulyAugust

Cash sales $ 14,000 $ 8,000 $ 8,000

On accounts receivable from:

April sales 10,800 - -

May sales 50,400 12,600 -

June sales - 100,800 25,200

July sales - - 57,600

Total collections (to Exhibit II) $75,200$121,400$90,800

Schedule c: Purchases BudgetMayJuneJulyAugust

Desired purchases:

62% × next month's sales $86,800 $49,600 $49,600 $37,200 Schedule d: Disbursementsfor PurchasesJuneJulyAugust

Last month's purchases (to Exhibit II) $86,800 $49,600 $49,600

Other required items related to purchases

Accounts payable, August 31, 2008

(62% × September sales - to Exhibit III) $37,200

Cost of goods sold (to Exhibit I) $86,800 $49,600 $49,600 Schedule e: Operating Expense Budget

JuneJulyAugustTotal

Salaries, wages, commissions $28,000 $16,000 $16,000 $60,000 Other Variable expenses 5,600 3,200 3,200 12,000 Fixed expenses 11,000 11,000 11,000 33,000 Depreciation 500 500 500 1,500

Total operating expenses $45,100$30,700$30,700$106,500

Schedule f: Payments for Operating Expenses

JuneJulyAugust

Variable expenses $33,600 $19,200 $19,200 Fixed expenses 11,000 11,000 11,000

Total payments for operating expenses $44,600$30,200$30,200

Schedule g: Interest calculations

JuneJulyAugust

Beginning balance $67,000 $67,558 $26,000 Monthly interest expense @ 10% 558 563 217

Ending balance before repayment $67,558 68,121 26,217 Principal repayment (from

statement of receipts and disbursements) (41,000) (10,000) Interest payment (1,121) (217) Ending balance $26,000 $16,000

2. This is an example of the classic short-term, self-liquidating loan. The need for such

a loan often arises because of the seasonal nature of a business. The basic source of

cash is proceeds from sales to customers. In times of peak sales, there is a lag

between the sale and the collection of the cash, yet the payroll and suppliers must be

paid in cash right away. When the cash is collected, it in turn may be used to repay

the loan. The amount of the loan and the timing of the repayment are heavily

dependent on the credit terms that pertain to both the purchasing and selling functions

of the business.

7-B1 (60-120 min.) $ refers to Australian dollars.

1. See Exhibits I, II, and III and supporting schedules a, b, c, d.

2. The cash budget and balance sheet clearly show the benefits of moving to just-in-

time purchasing (though the transition would rarely be accomplished as easily as

this example suggests). However, the company would be no better off if it left

much of its capital tied up in cash -- it has merely substituted one asset for

another. At a minimum, the excess cash should be in an interest bearing account

-- the interest earned or forgone is one of the costs of inventory.

Schedule a: Sales BudgetJanuaryFebruaryMarch

Total sales (100% on credit) $248,000$280,000$152,000

Schedule b: Cash Collections

60% of current month's sales $148,800 $168,000 $91,200

30% of previous month's sales 30,000 74,400 84,000

10% of second previous month's sales 10,000 10,000 24,800

Total collections $188,800$252,400$200,000 DecemberJanuaryFebruaryMarch

Schedule c: Purchases Budget

Desired ending inventory $156,200 $ 24,000* $ 24,000 $ 24,000

Cost of goods sold 50,000 124,000 140,000 76,000

Total needed $206,200 $148,000 $164,000 $100,000 Beginning inventory 64,000 156,200 32,200 24,000

Purchases $142,200$ - $131,800$ 76,000

* Actual ending January (and beginning February) inventory level is $32,200, as

inventory levels are drawn down toward desired level of $24,000.

Schedule d: Disbursements for Purchases

100% of previous month's purchases $142,200$ - $131,800

March 31 accounts payable $76,000Exhibit I

WALLABY KITE

Cash Budget

For the Three Months Ending March 31, 20X2

JanuaryFebruaryMarch

Cash balance, beginning $ 20,000 $ 20,400 $138,767

Minimum cash balance desired 20,000 20,000 20,000

(a) Available cash balance 0 400 118,767

Cash receipts and disbursements:

Collections from customers

(Schedule b) 188,800 252,400 200,000

Payments for merchandise

(Schedule d) (142,200) - (131,800)

Rent (32,200) (1,000) (1,000)

Wages and salaries (60,000) (60,000) (60,000)

Miscellaneous expenses (10,000) (10,000) (10,000)

Dividends (6,000) -

Purchase of fixtures - - (12,000)

(b) Net cash receipts & disbursements $ (61,600) $181,400 $ (14,800)

Excess (deficiency) of cash

before financing (a + b) $ (61,600)$181,800$103,967

Financing:

Borrowing, at beginning of period $ 62,000 $ - $ - Repayment, at end of period - (62,000)

Simple interest, 10% monthly - (1,033)

(c) Total cash increase (decrease)

from financing $ 62,000$ (63,033)$ -

(d) Cash balance, end (beginning

balance + c + b) $ 20,400$138,767$123,967

Exhibit II

WALLABY KITE

Budgeted Income Statement

For the Three Months Ending March 31, 20X2

Sales (Schedule a) $680,000

Cost of goods sold (Schedule c) 340,000

Gross margin $340,000

Operating expenses:

Rent* $ 67,000

Wages and salaries 180,000

Depreciation. 3,000

Insurance 1,500

Miscellaneous 30,000 281,500

Net income from operations $ 58,500

Interest expense 1,033

Net income $ 57,467

*(January-March sales less $40,000) × .10 plus 3 × $1,000

Exhibit III

WALLABY KITE

Budgeted Balance Sheet

March 31, 20X2

Assets

Current assets:

Cash (Exhibit I) $123,967

Accounts receivable* 88,800

Merchandise inventory (Schedule c) 24,000

Unexpired insurance 4,500 $241,267 Fixed assets, net: $50,000 + $12,000 - $3,000 59,000 Total assets $300,267 Liabilities and Stockholders' Equity

Liabilities:

Accounts payable (Schedule d) $76,000

Rent payable. 64,000

Dividends payable 6,000 $146,000 Stockholders' equity** 154,267 Total liabilities and stockholders' equity. $300,267 *February sales (.10 × $280,000) plus March sales (.40 × $152,000) = $88,800

**Balance, December 31, 20X1 $102,800

Add: Net income 57,467

Total $160,267

Less: Dividends paid 6,000

Balance, March 31, 20X2 $154,267

7-1Budgeting 1) provides an opportunity for managers to reevaluate existing activities and evaluate possible new activities, 2) compels managers to think ahead by formalizing their responsibilities for planning, 3) aids managers in communicating objectives to units and coordinating actions across the organization, and 4) provides benchmarks to evaluate subsequent performance.

7-2 Budgeting is primarily attention directing because it helps managers to focus on operating or financial problems early enough for effective planning or action.

7-3 Strategic planning covers no specific time period, is quite general, and often is not built around financial statements. Long-range planning usually has a 5- or 10-year horizon and consists of financial statements without much detail. Budgeting usually has a horizon of one year or less, and consists of financial statements with much detail.

7-4 Continuous budgets add a month (or quarter) in the future as the month (or quarter) just ended is dropped. Therefore, the continuous budget provides a continually updated budget looking twelve months ahead. When the new month (or quarter) is added, the budget for the remainder of the current year may also be revised. When companies revise the budgets for the remainder of the current year, they usually compare subsequent results to the original budget (a fixed target) in addition to comparing them to the latest revised budget.

7-5 If the measures used to reward employees in the performance evaluation system are not aligned with the goals of the company, the incentives from the evaluation system may lead employees to take actions that conflict with the interests of the company.

7-6 Lower-level managers bias their forecasts to create budgetary slack or padding. Upper-level managers adjust for this bias in creating a revised budget. Therefore, lower-level managers introduce additional bias to compensate for the adjustment that will be made by upper-level managers, and upper-level managers introduce additional adjustments for the additional bias. This cycle can quickly destroy the potential benefits of budgets.

7-7 A manager may make short-run decisions to increase profits that are not in the company’s best long-run interests, such as offering customers excessively favorable credit terms or cutting discretionary expenditures such as R&D and advertising, trading future sales for current profits. In the extreme, the manager might choose to falsely report inflated profits.

7-8First, by moving this year's sales into next year or moving next year's expenses into this year, the manager ensures a higher level of reported profit (and probably a higher bonus) next year. Second, by decreasing this year's income, the manager avoids ratcheting up of performance expectations in setting the bonus target for the next year.

7-9 Budgeted performance is better than past performance as a basis for judging current performance because the budget contains no hidden inefficiencies and can be founded on current rather than past economic conditions.

7-10 Budgets are especially important in environments that are rapidly changing. They force managers to look forward and plan for change. Budgets force analysis of the factors that are bringing about the changes.

7-11 No. When budgeting in done correctly, it is an important aid to managers. Managers need time to plan and coordinate their various activities. Budgeting forces them to take time from the day-to-day problems and focus on longer-term issues.

7-12 The sales forecast is the starting point for budgeting because all other operating activities of the company are affected by the volume of sales.

7-13 The sales forecast is influenced by past patterns of sales, estimates made by the sales force, general economic conditions, competitors' actions, changes in prices, market research studies, and advertising and sales promotion plans.

7-14 An operating budget is used as a guide for production and sales and it focuses on the income statement. A financial budget is used to control the receipt and disbursement of funds and it focuses on the statement of cash receipts and disbursements.

7-15 Operating expenses are costs charged to the income statement in a particular period. Some operating expenses may be associated with the sales of the period, and others may be costs of being in business for the period. Disbursements for these operating expenses, that is, the cash payments for them, may come in a previous period (assets purchased in one period and depreciated over future periods) or a future period (wages accrued in a period but paid in the next period), as well as during the period.

7-16 A cash budget is an attempt to monitor and regulate the flow of cash in optimum fashion.

7-17 Budgeting will be effective only if it is accepted by those managers who are responsible for controlling costs. Since their performance will be measured against the budget, they must be educated in the assumptions underlying the budget and convinced of its objectivity and relevance.

7-18 Both functional and activity-based master budgets begin with the forecasted demand for products or services. However, whereas functional budgets then determine the inventory, materials, labor, and overhead budgets, the activity-based budget focuses on determining the demand for key activities. This demand is measured by the cost-driver unit for each activity. Then the budgeted resource consumption rates are used to set the budgets for resources such as materials, labor, and overhead. The focus on activities and consumption rates in activity-based budgeting is what managers believe offers value from an operational control perspective.

7-19 No. Financial planning models are mathematical statements of the relationships in the organization among all the operating and financial activities and of other major internal and external factors that may affect the financial results of decisions. But financial planning models are only as good as the assumptions and inputs used to build them. Managers must understand the models to provide appropriate assumptions and inputs. If managers do not understand budgeting, using financial planning models can result in GIGO (garbage in, garbage out).

7-20 Setting up the master budget on a spreadsheet is time-consuming -- the first time. However, if it is done properly, with maximum flexibility, then the ease of subsequent use probably will more than offset that initial cost. Ultimately, though, the master budget system must meet the cost-benefit test. Improved budgeting systems are only worthwhile if they offer net benefits. Preparing and revising the master budget of a large company just would not be feasible without the aid of a computer.

7-21 Spreadsheets can be used to make a mathematical model of an organization. It may take much effort to create the model, but once it is in place it can be used over and over again with minimal effort. Such a model is especially useful for sensitivity analysis, which is the asking of "what if" questions.

7-22 Budgets that are used primarily for limiting spending provide incentives for “game playing.” Accurate forecasts and estimates give way to strategies designed to avoid budget cuts or to justify increased budgets. Budgets should have a much larger role in the effective and efficient management of an organization. A budget should be a decision tool. It helps managers project the results of their decisions, thereby aiding them in making the right decisions. It also provides a base for adapting to change. Anything that results in loss of budget accuracy will limit the decision usefulness of the budget.

7-23 Accurate sales forecasts are essential to budgeting. Sales personnel are often “closest to the action” and therefore in the best position to make accurate forecasts. They are in direct contact with customers, and often they are the first to notice trends. A central staff function, such as market research, can set parameters for forecasting and give some common ground rules. But usually it is important to get sales personnel heavily involved because they have information that no one else has. Most importantly, the more involved sales personnel are, the more committed they will be to achieving budgeted sales goals.

7-24 The planning that comes through a good budget process is important to all segments of an organization. Segments with both revenues and expenses can show a budgeted profit. Other segments that have only expenses, such as a research and development department, still have to plan their operations. It is important to predict the resources needed to meet the segment’s objectives so that required resources can be obtained. Budgeting provides a formal channel for communication between the segment and top management about what activities the segment is to undertake.

7-25 A key to employee acceptance of a budget is participation. Budgets created with the active participation of all affected employees are generally more effective than budgets imposed on subordinates. If a budget is to help direct future activities, employees must accept the budget. Acceptance means believing that the budget reflects a desired future path for the organization. If a manager has been a participant in determining the future path – that is, helped develop the budget – he or she is more likely to accept it as a desirable objective.

7-26 (5 min.)

1. a. Capital budget

2. Sales budget (or operating budget)

b. Cash budget 3. Continuous (rolling)

c. Budgeted balance sheet 4. Overall goals of the organization

7-27 (10-15 min.)

Music Masters will be using cash until the beginning of 2010, at which time cash receipts will begin to exceed cash disbursements. Therefore, the following amount of venture capital is needed to carry the firm to the beginning of 2010:

Initial capital investment $380,000 First year cash outflow (12 × $35,000) 420,000 Second year cash outflow [12 × ($35,000 - $30,000)] 60,000 Total $860,000

7-28 (10-15 min.)

1. Cost + (.25 × Cost) = Sales

1.25 × Cost = $2,100,000

Cost = $1,680,000

2. U se the familiar identity, Beginning Inventory plus Purchases equals Cost of

Goods Sold plus Ending Inventory. To compute required purchases, compute the inventory needed (Cost of Goods Sold plus Ending Inventory) and then subtract

the amount that will come from Beginning Inventory:

July Merchandise Purchases

Cost of goods sold ($2,200,000 ÷ 1.25) $1,760,000

Add: Target ending inventory

.30 × ($2,360,000 ÷ 1.25) 566,400

Cost of goods needed $2,326,400

Less: Beginning inventory

.30 × ($2,200,000 ÷ 1.25) 528,000

Required Purchases $1,798,400

7-29 (25-30 min.)

1. July collections include:

May sales billed June 5, .18 × .5 × $700,000 $ 63,000

June sales billed June 20, .18 × .5 × $800,000 72,000

June sales billed July 5, .80 × .5 × $800,000 × .97 310,400

July sales billed July 20, .80 × .5 × $950,000 × .97 368,600

Total $814,000

2. .60 × .25 × $800,000 = $120,000

3. Ending inventory, .60 × .25 × $950,000 $142,500

Merchandise needed for current month's sales,

.60 × $800,000 480,000

Total needs 622,500

Beginning inventory, .60 × .25 × $800,000 120,000

Required Purchases $502,500

4. JulyAugust

Ending inventory, .60 × .25 × next month's sales $135,000 $ 90,000 Merchandise needed for current month's sales, .60 × sales 570,000 540,000 Total needs 705,000 630,000 Beginning inventory, .60 × .25 × current month's sales 142,500 135,000 Required Purchases $562,500$495,000 Payments, 1/2 of current purchases, 1/2 of preceding

month's purchases, .5 × $562,500 + .5 × $495,000 $528,750

7-30 (15 min.) This illustration is straightforward and follows the chapter example closely. All amounts are in dollars.

JuneJulyAugust

Sales budget

Credit sales, 30% 129,000 132,000 150,000 Cash sales, 70% 301,000308,000350,000

Total sales, 100% 430,000440,000500,000

Cash collections budget

Cash sales this month 301,000 308,000 350,000 100% of last month's credit sales 105,000129,000132,000

Total collections 406,000437,000482,000

7-31 (15-25 min.) This problem is slightly more complex than 7-30. All amounts are in thousands of Japanese yen.

JanuaryFebruaryMarch

Sales budget

Credit sales, 80% 160,000 176,000 192,000 Cash sales, 20% 40,000 44,000 48,000

Total sales 200,000220,000240,000

Cash collections budget

Cash sales this month 40,000 44,000 48,000 50% of this month's credit sales 80,000 88,000 96,000 40% of last month's credit sales 62,400 64,000 70,400 10% of next-to-last month's credit sales 18,000 15,600 16,000

Total collections 200,400211,600230,400

7-32 (10-15 min.)

Collections from:

January sales: $360,000 × 12% $ 43,200

February sales: $400,000 × 10% × 99% 39,600

February sales: $400,000 × 25% 100,000

March sales: $450,000 × 50% × 98% 220,500

Total cash collections $403,300

7-33 (15-20 min.) This is straightforward and closely follows the illustration in the chapter. All amounts are in dollars. Some students need to be reminded that merchandise inventories are carried at cost, not at selling prices.

RENOVATION LIGHTING SUPPLY

Purchases and Disbursements Budgets

JuneJulyAugust

Purchases budget

Ending inventory 220,000 200,000 240,000 Cost of goods sold, 60% of sales264,000210,000180,000

Total needed 484,000 410,000 420,000

Beginning inventory 275,000220,000200,000

Purchases 209,000190,000220,000

Disbursements for purchases

10% of this month's purchases 20,900 19,000 22,000

80% of last month's purchases 144,000* 167,200 152,000

10% of second-last month's

purchases 25,000** 18,000 20,900

189,900204,200194,900

**.10 × 250,000 = 25,000

7-34 (20-25 min.) This is straightforward and follows the illustration in the chapter closely, except for requirement 1. All amounts are in euros.

1. 210,000 - [15,000 + .9 × (.6 × 300,000)] = 210,000 - [15,000 + .9(180,000)]

= 210,000 - 177,000

= 33,000

2. LINKENHEIM GMBH

Purchases and Disbursements Budgets

JuneJulyAugust

Purchases budget

Ending inventory* 171,600 198,600 231,000 Cost of goods sold, 60% of sales 180,000174,000204,000

Total needed 351,600 372,600 435,000 Beginning inventory 210,000171,600198,600

Purchases 141,600201,000236,400

Disbursements for purchases

80% of last month's purchases 120,000 113,280 160,800 20% of this month's purchases 28,320 40,200 47,280

Disbursements for purchases 148,320153,480208,080

*Inventory targets, end of month:

June: 15,000 + .9 × (0.6 × 290,000) = 15,000 + .9 × (174,000) = 171,600

July: 15,000 + .9 × (0.6 × 340,000) = 15,000 + .9 × (204,000) = 198,600

August: 15,000 + .9 × (0.6 × 400,000) = 15,000 + .9 × (240,000) = 231,000

7-35 (20 min.) This is a straightforward exercise.

CARLSON COMPANY

Cash Budget

For the Month Ended June 30, 20X4

(in thousands)

Beginning Cash, May 31, 20X4 $ 15

Cash Receipts:

Collections from customers from:

June sales (.80 × $290) $232

May sales (.5 × 24)* 12

April sales 20 264

Total cash available during June $279

Cash Disbursements:

On accounts payable of May 31 $145

On June purchases, .25 × $192 48

Wages 36

Utilities 5

Advertising 10

Office expenses 4 248

Ending Cash, June 30, 20X4 $ 31

*$24,000 = 20% of May sales, 10% of which or half the remainder will be

collected in June. All of April's remaining sales will be collected in June.

7-36 (20-25 min.) The collections from March sales are a bit tricky. Note that the receivable balance from March sales at March 31 is $450,000; therefore, four fifths (because 40/50 will be collected in April and 10/50 will be collected in May) will be

received in April.

MERRILL NEWS AND GIFTS

Budgeted Statement of Cash Receipts and Disbursements

For the Month Ending April 30, 20X7

Cash balance, March 31, 20X7 $ 100,000 Add receipts, collections from customers:

From April sales, 1/2 × $1,000,000 $500,000

From March sales, 4/5 × $450,000 360,000

From February sales 80,000 940,000

Total cash available $1,040,000 Less disbursements:

Merchandise purchases, $450,000 × 40% $180,000

Payment on accounts payable 460,000

Payrolls 90,000

Insurance premium 1,500

Other expenses 45,000

Repayment of loan and interest 97,200 873,700

Cash balance, April 30, 20X7 $ 166,300 7-37 (40-60 min.)

BOTANICA COMPANY

Statement of Estimated Cash Receipts and Disbursements

For the Month Ended October 31, 20X7

Cash balance, September 30, 20X7 $ 4,800

Receipts, collections of receivables (Schedule 1) 29,340

Total cash available $34,140

Less disbursements:

Merchandise purchases (Schedule 2) $17,000

Variable expenses (Schedule 3) 3,125

Fixed expenses (Schedule 3) 900 21,025

Cash balance, October 31, 20X7 $13,115 Schedule 1, Collections of Accounts Receivable:

Collected in October

SalesPercentAmount

From August sales $12,000 6% $ 720

From September sales $36,000 30% 10,800

From October sales $30,000 60% × 99% 17,820

Total October collections $29,340 Schedule 2, Payments for Merchandise:

SeptemberOctober

Target ending inventory $ 9,000* $ 6,600*

Goods sold 21,600 18,000

Total needs $30,600 $24,600

Beginning inventory 10,800* 9,000*

Purchases $19,800$15,600

Payments, 2/3 × $15,600 October purchases

Accounts payable, end of September,

1/3 × $19,800 purchases 6,600

Total payments in October $17,000

* (12/20) × .5 × 30,000 = $9,000; (12/20) × .5 × 36,000 = $10,800;

(12/20) × .5 × 22,000 = $6,600

Schedule 3, Selling and General Administrative Expenses:

Total selling and general administrative expenses $61,500

Less fixed expenses 24,000

Total variable expenses for year (vary with sales) $37,500

October variable expenses:

$37,500 × (October sales Year's sales) =

$37,500 × ($30,000 ÷ $360,000) $ 3,125

Total fixed expenses $24,000 Less depreciation (no current cash outlay) 13,200 Total cash required for fixed expenses for year $10,800

October cash required for fixed expenses:

$10,800 ÷ 12 $ 900 7-38 (30 - 40 min.) This problem would be solved most easily on a spreadsheet.

1. The Ritz-Carlton’s monthly cash budget is shown on Exhibit 7-38 on the two

following pages.

2. Increase in revenues:

6 mo. × .05 × 300 rooms × $290 × 30 days × .98 collected $767,340

Increase in costs:

6 mo. × .05 × 300 rooms × $30 × 30 days 81,000

Increase in profit $686,340

EXHIBIT 7-38

RITZ-CARLTON

Monthly Cash Budget

January February March April May June Revenues $2,479,500 $2,479,500 $2,218,500 $2,218,500 $1,827,000 $1,827,000 Collections:

Previous Mo. Sales 694,260 694,260 694,260 621,180 621,180 511,560 This Mo. Sales 1,487,700 1,487,700 1,331,100 1,331,100 1,096,200 1,096,200 Next Mo. Sales 247,950 221,850 221,850 182,700 182,700 182,700 Total collections 2,429,910 2,403,810 2,247,210 2,134,980 1,900,080 1,790,460 Disbursements:

Variable costs

($30/room) 256,500 256,500 229,500 229,500 189,000 189,000 Fixed salaries 400,000 400,000 400,000 400,000 400,000 400,000 Fixed operating

costs 120,000 120,000 120,000 120,000 120,000 120,000 Interest payments _________ _________ _________ _________ _________ 3,600,000 Total disbursements 776,500 776,500 749,500 749,500 709,000 4,309,000 Net cash inflow $1,653,410 $1,627,310 $1,497,710 $1,385,480 $1,191,080 ($2,518,540) EXHIBIT 7-38 (Continued)

RITZ-CARLTON

Monthly Cash Budget

July August September October November December Total

$1,827,000 $1,827,000 $1,827,000 $1,827,000 $2,218,500 $2,479,500 $25,056,000 511,560 511,560 511,560 511,560 511,560 621,180 7,015,680

1,096,200 1,096,200 1,096,200 1,096,200 1,331,100 1,487,700 15,033,600

182,700 182,700 182,700 221,850 247,950 247,950 2,505,600

290 / 42

1,790,460 1,790,460 1,790,460 1,829,610 2,090,610 2,356,830 24,554,880

189,000 189,000 189,000 189,000 229,500 256,500 2,592,000 400,000 400,000 400,000 400,000 400,000 400,000 4,800,000

120,000 120,000 120,000 120,000 120,000 120,000 1,440,000 _________ _________ _________ _________ _________ 3,600,000 7,200,000 709,000 709,000 709,000 709,000 749,500 4,376,500 16,032,000 $1,081,460 $1,081,460 $1,081,460 $1,120,610 $1,341,110 ($2,019,670) $ 8,522,880

291 / 42

亨格瑞管理会计英文第15版练习答案07

CHAPTER 7 COVERAGE OF LEARNING OBJECTIVES

Introduction to Budgets and Preparing the Master Budget 7-A1 (60-90 min.) 1. Exhibit I RAPIDBUY ELECTRONICS, INC. Mall of America Store Budgeted Income Statement For the Three Months Ending August 31, 20X8 Sales $300,000 Cost of goods sold (.62 × $300,000) 186,000 Gross profit $114,000 Operating expenses: Salaries, wages, commissions $60,000 Other expenses 12,000 Depreciation 1,500 Rent, taxes and other fixed expenses 33,000 106,500 Income from operations. $ 7,500 Interest expense* 1,338 Net income $ 6,162 * See schedule g for calculation of interest.

RAPIDBUY ELECTRONICS, INC. Mall of America Store Cash Budget For the Three Months Ending August 31, 20X8 June July August Beginning cash balance $ 5,800 $ 5,600 $ 5,079 Minimum cash balance desired 5,000 5,000 5,000 (a) Available cash balance $ 800 $ 600 $ 79 Cash receipts & disbursements: Collections from customers (schedule b) $ 75,200 $121,400 $ 90,800 Payments for merchandise (schedule d) (86,800) (49,600) (49,600) Fixtures (purchased in May) (11,000) - - Payments for operating expenses (schedule f) (44,600) (30,200) (30,200) (b) Net cash receipts & disbursements $(67,200) $ 41,600 $ 11,000 Excess (deficiency) of cash before financing (a + b) (66,400) 42,200 11,079 Financing: Borrowing, at beginning of period $ 67,000$ - $ - Repayment, at end of period - (41,000) (10,000) Interest, 10% per annum - (1,121)* (217)* (c) Total cash increase (decrease) from financing $ 67,000 $(42,121) $(10,217) (d) Ending cash balance (beginning balance + b + c) $ 5,600 $ 5,079 $ 5,862 * See schedule g

亨格瑞管理会计英文第15版练习答案04

CHAPTER 4 COVERAGE OF LEARNING OBJECTIVES

CHAPTER 4 Cost Management Systems and Activity-Based Costing 4-A1 (20-30 min.) See Table 4-A1 on the following page. 4-A2 (25-30 min.) 1. Merchandise Inventories, 1,000 devices @ $97 $97,000 2. Direct materials inventory $ 40,000 Work-in-process inventory 0 Finished goods inventory 97,000 Total inventories $137,000 3. NILE ELECTRONICS PRODUCTS Statement of Operating Income For the Year Ended December 31, 20X9 Sales (9,000 units at $170) $1,530,000 Cost of goods sold: Beginning inventory $ 0 Purchases 970,000 Cost of goods available for sale $ 970,000 Less ending inventory 97,000 Cost of goods sold (an expense) 873,000

Gross margin or gross profit $ 657,000 Less other expenses: selling & administrative costs 185,000 Operating income (also income before taxes in this example) $ 472,000

亨格瑞管理会计英文第15版练习答案05解析.

CHAPTER 5 COVERAGE OF LEARNING OBJECTIVES

CHAPTER 5 Relevant Information for Decision Making with a Focus on Pricing Decisions 5-A1 (40-50 min.) 1. INDEPENDENCE COMPANY Contribution Income Statement For the Year Ended December 31, 2009 (in thousands of dollars) Sales $2,200 Less variable expenses Direct material $400 Direct labor 330 Variable manufacturing overhead (Schedule 1) 150 Total variable manufacturing cost of goods sold $880 Variable selling expenses 80 Variable administrative expenses 25 Total variable expenses 985 Contribution margin $ 1,215 Less fixed expenses: Fixed manufacturing overhead (Schedule 2) $345 Selling expenses 220 Administrative expenses 119 Total fixed expenses 684 Operating income $ 531

亨格瑞管理会计英文第15版练习答案07

亨格瑞管理会计英文第15版练习答案07 CHAPTER 7 COVERAGE OF LEARNING OBJECTIVES CRITICAL CASES, FUNDA- THINKING EXCEL, MENTAL EXERCISES COLLAB. & ASSIGNMENT AND INTERNET LEARNING OBJECTIVE MATERIAL EXERCISES PROBLEMS EXERCISES LO1: Explain how budgets A1,B1 facilitate planning and coordination. LO2: Anticipate possible 25 40 human relations problems caused by budgets. LO3: Explain potentially 22 39, 40 dysfunctional incentives in the budget process. LO4: Explain the difficulties 23 42 49 of sales forecasting. LO5: Explain the major A1,B1 24,26 39 features and advantages of a master budget. LO6: Follow the principal A1,B1 29 40 43,45 steps in preparing a master budget. LO7: Prepare the operating A1,B1 28,29,30,31 40 43,45,46,48 budget and the supporting schedules.

亨格瑞管理会计英文第15版 答案 10-12章

CHAPTER 11 Capital Budgeting 11-A1 (15-25 min.) Answers are printed in the text at the end of the assignment material. 11-29 (10-15 min.) 1. The present value is $480,000 and the annual payments are an annuity, requiring use of Table 2: (a)$480,000 = annual payment × 11.2578 annual payment = $480,000 ÷ 11.2578 = $42,637 (b)$480,000 = annual payment × 9.4269 annual payment = $480,000 ÷ 9.4269 = $50,918 (c)$480,000 = annual payment × 8.0552 annual payment = $480,000 ÷ 8.0552 =$59,589 2. (a)$480,000 = annual payment × 8.5595 annual payment = $480,000 ÷ 8.5595 = $56,078 (b)$480,000 = annual payment × 7.6061 annual payment = $480,000 ÷ 7.6061 = $63,107 (c)$480,000 = annual payment × 6.8109 annual payment = $480,000 ÷ 6.8109 =$70,475 3. (a) Total payments= 30 × $50,918 = $1,527,540 Total interest paid= $1,527,540- $480,000 = $1,047,540 (b) Total payments= 15 × $63,107= $946,605 Total interest paid = $946,605 - $480,000 = $466,605 11-36 (10 min.) Buy. The net present value is positive. Initial outlay * $(21,000) Present value of cash operating savings, from 12-year, 12% column of Table 2, 6.1944 × $5,000 30,972 Net present value $ 9,972 * The trade-in allowance really consists of a $5,000 adjustment of the selling price and a bona fide $10,000 cash allowance for the old equipment. The relevant amount is the incremental cash outlay, $21,000. The book value is irrelevant. 11-39 (10-15 min.) Copyright ?2011 Pearson Education 1

亨格瑞管理会计英文第15版练习答案06

CHAPTER 6 COVERAGE OF LEARNING OBJECTIVES

LO6: Decide A4,B5 40 57,59 whether to keep or replace equipment. 26,39,41 52,58,64 71 LO7: Identify irrelevant and misspecified costs. B6 43 60 LO8: Discuss how performance measures can affect decision making. CHAPTER 6 Relevant Information and Decision Making With a Focus on Operational Decisions 6-A1 (20 min) 1. The key to this question is what will happen to the fixed overhead costs if production of the boxes is discontinued. Assume that all $60,000 of fixed costs will continue. Then, Sunshine State will lose $20,000 by purchasing the boxes from Weyerhaeuser: Payment to Weyerhaeuser, 80,000 × $2.10$168,000 Costs saved, variable costs 148,000 Additional costs $ 20,000 2. Some subjective factors are: Might Weyerhaeuser raise prices if Sunshine State closed down its box-making facility? Will sub-contracting the box production affect the quality of the boxes? Is a timely supply of boxes assured, even if the number needed changes? Does Sunshine State sacrifice proprietary information when disclosing the box specifications to Weyerhaeuser? 3. In this case the fixed costs are relevant. However, it is not the depreciation on the old equipment that is relevant. It is

亨格瑞管理会计英文第15版练习答案07

CHAPTER 7 COVERAGE OF LEARNING OBJECTIVES CHAPTER 7 Introduction to Budgets and Preparing the Master Budget 7-A1 (60-90 min.)

1. Exhibit I RAPIDBUY ELECTRONICS, INC. Mall of America Store Budgeted Income Statement For the Three Months Ending August 31, 20X8 Sales $300,000 Cost of goods sold (.62 × $300,000) 186,000 Gross profit $114,000 Operating expenses: Salaries, wages, commissions $60,000 Other expenses 12,000 Depreciation 1,500 Rent, taxes and other fixed expenses 33,000 106,500 Income from operations. $ 7,500 Interest expense* 1,338 Net income $ 6,162 * See schedule g for calculation of interest. Exhibit II RAPIDBUY ELECTRONICS, INC. Mall of America Store Cash Budget For the Three Months Ending August 31, 20X8 JuneJulyAugust Beginning cash balance $ 5,800 $ 5,600 $ 5,079 Minimum cash balance desired 5,000 5,000 5,000 (a) Available cash balance $ 800$ 600$ 79 Cash receipts & disbursements: Collections from customers (schedule b) $ 75,200 $121,400 $ 90,800 Payments for merchandise (schedule d) (86,800) (49,600) (49,600) Fixtures (purchased in May) (11,000) - - Payments for operating expenses (schedule f) (44,600) (30,200) (30,200) (b) Net cash receipts & disbursements $(67,200) $ 41,600 $ 11,000 Excess (deficiency) of cash before financing (a + b) (66,400) 42,200 11,079 Financing: Borrowing, at beginning of period $ 67,000 $ - $ - Repayment, at end of period - (41,000) (10,000) Interest, 10% per annum - (1,121)* (217)*

亨格瑞管理会计英文第15版练习答案03

CHAPTER 3 COVERAGE OF LEARNING OBJECTIVES

CHAPTER 3 Measurement of Cost Behavior 3-A1 (20-25 min.) Some of these answers are controversial, and reasonable cases can be built for alternative classifications. Class discussion of these answers should lead to worthwhile disagreements about anticipated cost behavior with regard to alternative cost drivers. 1. (b) Discretionary fixed cost. 2. (e) Step cost. 3. (a) Purely variable cost with respect to revenue. 4. (a) Purely variable cost with respect to miles flown. 5. (d) Mixed cost with respect to miles driven. 6. (c) Committed fixed cost. 7. (b) Discretionary fixed cost. 8. (c) Committed fixed cost. 9. (a) Purely variable cost with respect to cases of 7-Up. 10. (b) Discretionary fixed cost. 11. (b) Discretionary fixed cost. 3-A2 (25-30 min.) 1. Support costs based on 60% of the cost of materials: Sign A Sign B Direct materials cost $400 $200 Support cost (60% of materials cost) $240 $120 Support costs based on $50 per power tool operation: Sign A Sign B Power tool operations 3 6 Support cost $150 $300 2. If the activity analysis is reliable, by using the current method, Evergreen Signs is predicting too much cost for signs that use few power tool operations and is predicting too little cost for signs that use many power tool operations. As a result the company could be losing jobs that require few power tool operations because its bids are too high -- it could afford to bid less on these jobs. Conversely, the company could be getting too many jobs that require many power tool operations, because its bids are too low -- given what the "true" costs will be, the company cannot afford these jobs at those prices. Either way, the sign business could be more profitable if the owner better understood and used activity analysis. Evergreen Signs would be advised to adopt the activity- analysis recommendation, but also to closely monitor costs to see if the activity- analysis predictions of support costs are accurate.

亨格瑞管理会计英文第15版练习答案03

CHAPTER 3 COVERAGE OF LEARNING OBJECTIVES

CHAPTER 3 Measurement of Cost Behavior 3-A1 (20-25 min.) Some of these answers are controversial, and reasonable cases can be built for alternative classifications. Class discussion of these answers should lead to worthwhile disagreements about anticipated cost behavior with regard to alternative cost drivers. 1. (b) Discretionary fixed cost. 2. (e) Step cost. 3. (a) Purely variable cost with respect to revenue. 4. (a) Purely variable cost with respect to miles flown. 5. (d) Mixed cost with respect to miles driven. 6. (c) Committed fixed cost. 7. (b) Discretionary fixed cost. 8. (c) Committed fixed cost. 9. (a) Purely variable cost with respect to cases of 7-Up. 10. (b) Discretionary fixed cost. 11. (b) Discretionary fixed cost. 3-A2 (25-30 min.) 1. Support costs based on 60% of the cost of materials: Sign A Sign B Direct materials cost $400 $200 Support cost (60% of materials cost) $240 $120 Support costs based on $50 per power tool operation: Sign A Sign B