Accounting

E22-19

Oleans.com

Budgeted Balance sheet

July 31,2012

Assets

Current assets:

Cash (38,300-6,000 expenses) $32,300

Accounts receivable $5,140

Inventory (17,750 – 4,300)+(11,400/50%) 36,250

Total current assets $73,690

Plant assets:

Furniture and Fixtures $34,500

Less: accumulated depreciation $30,730

Total plant assets $3,770

Total assets $77,460

Liabilities

Current liabilities:

Accounts payable (10,600-8,200) $2,400

Total liabilities $2,400

Stockholder’s equity

Common stock $28,360

Retained earnings $46,700

Total stockholder’s equity $75,060

Total Liabilities and Stockholder’s equity $77,460

P23-28A

1. Direct materials price variance

(.17 per lb - .25 per lb) x 10,000 lbs

-.08 per lb x 10,000 lbs

=800

Direct materials efficiency variance

(10,000lbs-60,200 x .05lbs

50,200 x .05lbs

=2,510

Direct labor price variance Direct labor efficiency variance

(.15 – 6.66) x 3,366 (202,000 – 7,224) x .12

6.51 x 3,366 194,776 x .12

= =23,373

2. Materials inventory (10,000 x .25) 2,500

Direct materials price variance 800

Accounts payable (10,000 x .17) 1,700

Manufacturing wages (3,366 x .15) 505

Direct labor variance 336

Wages payable (3,366 x 6.66)

I do not understand how to do this. Every time I think I understand it, it’s not right. I am stuck at this spot and can’t figure out where to go from here.

3. Manufacturing overhead spending variance

(10,000)-(.15 x 202,000)

9,000 – 30,300

=21,300

Efficiency variance

(202,000 – 7,224) x .15

194,776 x .15

=29,216

Fixed overhead spending variance

30,500-25,284

=4,916

Fixed overhead volume variance

25,284 – (7,224 x .57)

25,284 –...