Class #16 Notes
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This 0 page Class Notes was uploaded by Brandon Sangster on Monday November 2, 2015. The Class Notes belongs to Acc 204 at Pace University taught by Picheng Lee in Fall 2015. Since its upload, it has received 46 views. For similar materials see Financial Accounting in Business at Pace University.
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Date Created: 11/02/15
Brandon Sangster Class16 Managerial Accounting Prof Picheng Lee Chapter 8 cont Exercise 819 Schedules of Expected Cash Collections and Disbursements Cash Balance on Dec 1St is 40000 20 collected in the month of sale 60 in month following sale and 18 collected in 2nd month following sale Sales on account Oct 400000 Nov 525000 Dec 600000 October November December Cash Collections 400000 X 20 525000 600000 Based on October 80000 400000 X 60 400000 X 18 Credit Sales 240000 72000 Cash Collections 525000 x 20 525000 x 60 Based on Nov Credit 105000 315000 Sales December Credit 600000 X 20 Sales 120000 Cash Sales 83000 Total Sales 315000 120000 8300072000 590000 C Dec Inventory Purchase 280000 X 30 84000 Nov Inventory Purchase 161000 Payment in December 245000 Cash Budget Cash Balance 121 40000 Cash Collections in December 590000 Cash Availability 630000 Cash Disbursements in December Merchandise Purchase 245000 Selling and Administrative Expense excluding Depreciation 430000 50000 380000 Web Server Purchase 76000 Dividends 9000 Total 710000 Excess Deficiency 80000 Borrowing 100000 Cash Balance 1231 20000 Chapter 9 Flexible Budgets and Performance Analysis Characteristics 0f Flexible Budgets Planning budgets are prepared for a single planned level of activity When actual activity differs from the planned level performance evaluation is difficult Show costs at actual level of activity Apples to Apples cost comparison And yes it s just like the board game the concept compare and contrast Flexible Budget is compared to actual results showing the real performance When you spend more than what it is supposed to be it is unfavorable and is favorable when actual either is less on cost or greater on revenue than the planned budget The performance report is the combination of the activity revenue and spending variances Revenue and Spending Variances The difference between the Actual Revenue and Flexible Budget Revenue is the Revenue Variance The difference between the Actual Cost and Flexible Budget cost is the Spending Variance Total variable costs change in direct proportion to change in activity Revenue and Spending Variances
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