Question

15. The LaGrange Corporation had the following budgeted sales for the first half of the current year S 70,000 S 50,000 $ 40,000 S 340,000 S 190,000 S 135,000 January February March S 120,000 S 160,000 S 140,000 S 35,000 $ 45,000 S 40,000 April May June The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31? A) S64,000 D) S56,000 C) $132,000 B) $76,000 16) What do cost variances measure? A) how well the business keeps unit costs of material and labor inputs within standards B) the volume discounts companies receive when ordering direct materials in large quantities C) the change in costs over time D) the difference between the cost the company pays and the cost its competitors pay 17. Prowse Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Variable Element Per Well Serviced S 4,000 S 1,000 S 600 Fixed Element per Month Revenue S 43,800 Employee salaries and wages Servicing materials Other expenses $ 38,200 A total of 42 wells were actually serviced during October. The total expenses in the flexible budget for October would have been closest to: A) $ 1 49,200 D) $130,029 C) $147,600 B)$141,200

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All are individual questions, although all have been answere : Answera are highlighted in yellow: Solution: Explanation Answers: B) $76,000 15 40% of May month credit sale (160000*40%) 10% of April month credit sale (120000*10%) 64000 12000 Accounts receivable balance on May.31 76000 A) How well business keeps units costs of material and labor inputs within standards. The purpose of cost varainces measure is measure the actual performance with standards. 16 17) A) $149,200 Variable Costs (1000+600)F42 67200 Fixed costs 43800+38200) 82000 Flexible costs 149200