75) Alliance Realty bought a 2,000 acre island for $10,000,000 and divided it into 200 equal size lots. As the lots are sold they are cleared at an average cost of $5,000. Storm drains and driveways are installed at an average cost of $8,000 per site. Sales commissions are 10 percent of selling price. Administrative costs are $850,000 per year. The average selling price was $160,000 per lot during the year when 50 lots were sold. During the subsequent year, the company bought another 2,000 acre island and developed it exactly the same way. Lot sales in the second […]

  11) General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income? A) $1,000,000 favourable B) $1,000,000 unfavourable C) $1,600,000 favourable D) $3,000,000 favourable E) $1,600,000 unfavourable   Use the information below to answer the following question(s).   Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.     Budgeted Actual Units Sold 1,000,000 990,000 Variable Costs […]

  Use the information below to answer the following question(s).   Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000. Cost of units sold is expected to be 40 percent of sales. All units are paid for in the month following purchase. The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired. Beginning accounts payable is $152,000.   41) Boone Hobbies gross margin for next month is expected to be A) $280,000. B) $336,000. C) $356,000. D) $360,000. E) $240,000.   42) Boone Hobbies budgeted purchases for next month is expected […]

  31) Bottle Company operates many bottling plants around the globe. At its Toronto plant, where nine different brands are bottled, the following costs were incurred in 2012 to produce 15,000,000 cans of soft drink:   1.Development costs of adding the new product “Soda Plus” amounted to $614,000. 2.Material handling costs of inspecting and handling concentrate, bottles, packages, and so forth amounted to $433,500.These costs are allocated to each production run. 3.Incoming materials purchase costs that can be directly traced to individual products being canned and packaged. These costs are purely variable with output level and amounted to $2,213,000. 4.Executive […]

  63) Lubriderm Corporation has the following budgeted sales for the next six-month period:   MonthUnit Sales June90,000 July120,000 August210,000 September150,000 October180,000 November120,000   There were 30,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20 percent of the unit sales for the next month.   Five pounds of materials are required for each unit produced. Each pound of material costs $8. Inventory levels for materials are equal to 30 percent of the needs for the next month. Materials inventory on June 1 was 15,000 pounds. […]