BB ICA-B Templates

Porter's Problems Co.
Sales and Collections Budget

For the Year Ended December 31, 2007
Sales Budget
Q1
Basic Bicycle
Deluxe Bicycle
Total Sales Revenue
Collections from 2009

Cellections from Q1 sales
Q2
2010
Q3
Q4
Year
$ 600,000 $ 612,000 $ 624,240 $ 636,725 $ 2,472,965

$ 700,000 $ 735,000 $ 771,750 $ 810,338 $ 3,017,088
$ 1,300,000 $ 1,347,000 $ 1,395,990 $ 1,447,062 $ 5,490,052
Q1
$238,411
$936,000
$1,174,411
Schedule of Cash Collections

Collections in Quarter
Q2
Q3
Q4
Bad Debt
$56,785
$0
$0
$273,000
$81,900
$0
$9,100
$969,840
$282,870
$84,861
$9,429
$1,005,113
$293,158
$9,772
$1,041,885
$10,129
$1,299,625 $1,369,883 $1,419,904
$38,430

Explanation:
Refer to sales data from "MB Data": A3:K10
2011
Q1
$
$
$
649,459 $
850,854 $
1,500,314 $
Q2
662,448
893,397
1,555,846
ctions
Collected during
Year
Remaining A/R Check figure
$295,196
$1,290,900
$0 $1,300,000
$1,337,571
$0 $1,347,000
$1,298,271
$87,947 $1,395,990
$1,041,885
$395,048 $1,447,062
$5,263,823
$482,995 $5,490,052
Two additional quarterly information is perpared

for possible use in production budget and
related schedules.
Collection information from "MB Data": B13:I23

Fast facts:
Credit sales is 70% of total sales;
1% of credit sales is estimated to be uncollectible;
60% of credit sales is collected in the quarter of sales;
30% of credit sales is collected in the following quarter of sales;
9% of credit sales is collected in the 2nd following quarter of sales;
that is,
In the 1st quarter, the company would collect:
60% of the 1st quarter's (current) credit sales;
30% of the 4th quarter's credit sales from 2009 (a quarter ago);
9% of the 3rd quarter's credit sales from 2009 (two quarters ago).

30% of credit sales is collected in the following quarter of sales;

9% of credit sales is collected in the 2nd following quarter of sales;
30% of the 4th quarter's credit sales from 2009 (a quarter ago);
9% of the 3rd quarter's credit sales from 2009 (two quarters ago).

Production Budget
Production Budget
Q1
Q2
2010
Q3
Q4
Year
2011
Q1
Q2
Basic Bicycles:
Budgeted Sales
Desired Ending Inventory
Total Units Needed
Less: Beginning Inventory
Required Normal Bike Production
4,000 4,080 4,162 4,245

816
832
849
866
4,816 4,912 5,011 5,111
807
816
832
849
4,009 4,096 4,178 4,262
16,486 4,330 4,416

866
883
17,352 5,213
807
866
16,545 4,347
Deluxe Bicycles:
Budgeted Sales
Total Units Needed
Required Normal Bike Production
2,000 2,100 2,205 2,315

105
110
116
122
2,105 2,210 2,321 2,437
98
105
110
116
2,007 2,105 2,211 2,321
8,620 2,431 2,553

122
128
8,742 2,559
98
122
8,644 2,437

Production Budget
Explanation:
To plan for manufacaturing components -- DM, DL, & MOH,
it is necessary to prepare production budget to determine
the required number of normal production of each bike.
Requried production in units
= Budgeted sales in units + Desired EI in units - BI in units
Note that BI is the same amount as the EI of prior quarter.
Q1 of 2011 is calculated in order to calculate DM budget later.

Direct Materials and Cash Disbursements for Materials Budgets
For Year Ended Dec. 31, 2007
Direct Materials Budget
Q1
Required Production
Basic
Deluxe
Q2
2010
Q3
Q4
Year
2011
Q1
4,009
2,007
4,096
2,105
4,178
2,211
4,262
2,321
16,545
8,644
4,347
2,437
8,018
8,018
4,009
4,009
8,018
4,009
4,009
8,193
8,193
4,096
4,096
8,193
4,096
4,096
8,356
8,356
4,178
4,178
8,356
4,178
4,178
8,524
8,524
4,262
4,262
8,524
4,262
4,262
33,091
33,091
16,545
16,545
33,091
16,545
16,545
8,694
8,694
4,347
4,347
8,694
4,347
4,347
Direct Materials Needed

Basic
Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Deluxe
Steel
Special Handles
Specialty Seat
Chain
Tires
Expanded Shift
Brake Unit
Totals
Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
7,025
4,014
2,007
2,007
4,014
2,007
2,007
7,368
4,211
2,105
2,105
4,211
2,105
2,105
7,737
4,421
2,211
2,211
4,421
2,211
2,211
8,124
4,642
2,321
2,321
4,642
2,321
2,321
30,253
17,288
8,644
8,644
17,288
8,644
8,644
8,530
4,874
2,437
2,437
4,874
2,437
2,437
15,043
8,018
4,009
6,016
12,032
4,009
6,016
4,014
2,007
2,007
15,561
8,193
4,096
6,202
12,403
4,096
6,202
4,211
2,105
2,105
16,093
8,356
4,178
6,389
12,778
4,178
6,389
4,421
2,211
2,211
16,647
8,524
4,262
6,583
13,166
4,262
6,583
4,642
2,321
2,321
63,344
33,091
16,545
25,189
50,378
16,545
25,189
17,288
8,644
8,644
17,224
8,694
4,347
6,784
13,568
4,347
6,784
4,874
2,437
2,437

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
2,334
1,229
614
930
1,860
614
930
632
316
316
2,414
1,253
627
958
1,917
627
958
663
332
332
2,497
1,279
639
987
1,975
639
987
696
348
348
2,584
1,304
652
1,018
2,035
652
1,018
731
366
366
2,584
1,304
652
1,018
2,035
652
1,018
731
366
366

Total Needs
Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
17,377
9,247
4,623
6,946
13,892
4,623
6,946
4,646
2,323
2,323
17,975
9,446
4,723
7,160
14,320
4,723
7,160
4,874
2,437
2,437
18,590
9,635
4,818
7,376
14,752
4,818
7,376
5,117
2,559
2,559
19,231
9,828
4,914
7,600
15,201
4,914
7,600
5,373
2,687
2,687
65,928
34,395
17,197
26,207
52,414
17,197
26,207
18,019
9,009
9,009

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
(1,295)
(1,286)
(640)
(652)
(1,275)
(609)
(658)
(32)
(26)
(34)
(2,334)
(1,229)
(614)
(930)
(1,860)
(614)
(930)
(632)
(316)
(316)
(2,414)
(1,253)
(627)
(958)
(1,917)
(627)
(958)
(663)
(332)
(332)
(2,497)
(1,279)
(639)
(987)
(1,975)
(639)
(987)
(696)
(348)
(348)
(1,295)
(1,286)
(640)
(652)
(1,275)
(609)
(658)
(32)
(26)
(34)
Direct Materials to be Purchased

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
16,082
7,961
3,983
6,294
12,617
4,014
6,288
4,614
2,297
2,289
15,641
8,217
4,109
6,230
12,459
4,109
6,230
4,242
2,121
2,121
16,176
8,382
4,191
6,418
12,836
4,191
6,418
4,454
2,227
2,227
16,734
8,549
4,275
6,613
13,226
4,275
6,613
4,677
2,338
2,338
64,633
33,109
16,557
25,555
51,139
16,588
25,549
17,987
8,983
8,975
$15
$2
$4
$6
$10
$8
$6
$5
$14
$25
$15
$2
$4
$6
$10
$8
$6
$5
$14
$25
$15
$2
$4
$6
$10
$8
$6
$5
$14
$25
$15
$2
$4
$6
$10
$8
$6
$5
$14
$25
$15
$2
$4
$6
$10
$8
$6
$5
$14
$25
Cost per unit of Direct Materials

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
Cost of Direct Materials to be purchased

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
Total Cost
$241,225 $234,613 $242,646 $251,006

$969,490
$15,922 $16,434 $16,763 $17,098
$66,218
$15,934 $16,434 $16,763 $17,098
$66,230
$37,765 $37,378 $38,507 $39,678
$153,329
$126,175 $124,593 $128,357 $132,261
$511,386
$32,116 $32,869 $33,526 $34,197
$132,707
$37,729 $37,378 $38,507 $39,678
$153,293
$23,068 $21,210 $22,271 $23,384
$89,934
$32,155 $29,695 $31,179 $32,738
$125,767
$57,220 $53,026 $55,677 $58,461
$224,384
$619,308 $603,630 $624,198 $645,601 $2,492,737
Schedule of Cash Payments

Quarter
Q1
Q2
Q3
Q4
Year
Accounts Payable, Beginning
$113,950
$0
$0
$0
$113,950
Q1
$464,481 $154,827
$0
$0
$619,308
Q2
$0 $452,723 $150,908
$0
$603,630
Q3
$0
$0 $468,148 $156,049
$624,198
Q4
$0
$0
$0 $484,201
$484,201
Total Cash Paid for Materials $578,431 $607,550 $619,056 $640,250 $2,445,287



Fast Facts
A/P Purchase Payment Policy
Payments made in current Q
Payments made in next Q
75.0%
25.0%
1st quarter: Pay 25% of purchases from the 4th quarter in 2009
and 75% of current quarter purchase

Direct Labor Budget
For Year Ended December 31, 2007
Direct Labor Budget
Q1
2010
Q3
Q2
Q4
Year
Required Production
Basic
Deluxe
4,009
2,007
4,096
2,105
4,178
2,211
4,262
2,321
16,545
8,644
DL hours per bicycle

Basic
Deluxe
2
5
2
5
2
5
2
5
2
5
8,018
10,035
18,053
8,193
10,526
18,719
8,356
11,053
19,409
8,524
11,605
20,129
33,091
43,219
76,310
Total DL hours needed

Basic
Deluxe
Total DL hours needed
Cost per DL Hour
Total DL Cost
$14
$14
$14
$14
$14
$252,742 $262,064 $271,727 $281,803 $1,068,337

Manufacturing Overhead Budget
Manufacturing Overhead Budget
Budgeted DL hours
Variable OH rate
Total Variable OH
Fixed OH
Total OH
Q1
18,053
$1.75
$31,593
$62,500
$94,093
Q2
18,719
$1.75
$32,758
$62,500
$95,258
2010
Q3
19,409
$1.75
$33,966
$62,500
$96,466
Q4
20,129
$1.75
$35,225
$62,500
$97,725
Total Manufacturing OH
Budgeted DL Hours
Predetermined OH for 2010
Schedule of Cash Disbursements for Overhead

2010
Q1
Q2
Q3
Total OH
$94,093
$95,258
$96,466
Less: Depreciation and Amortization
$15,625
$15,625
$15,625
Cash Disbursements for OH
$78,468
$79,633
$80,841
Year
76,310
$1.75
$133,542
$250,000
$383,542
$383,542
76,310
$
5.03
Q4
$97,725
$15,625
$82,100
Year
$383,542
$62,500
$321,042

Ending Inventory Budget
Ending Finished Goods Inventory Budget
Item
Quantity
Cost
Production Cost per Basic Bike: Standard Cost Card
DM
Steel
2 units
$15 each
Rubber Handle
2 set
$2 each
Seat
1 unit
$4 each
Chain
1 unit
$6 each
Tires
2 unit
$10 each
Gear Shift
1 unit
$8 each
Brake Unit
1 unit
$6 each
Total DM
DL
2 hours
$14 per hour
OH
2 hours
$5.03 per DL hour
Unit Production Cost
Ending finished goods inventory in units - Basic Bikes
Ending finished goods inventory in dollars - Basic Bikes
Production Cost per Deluxe Bike: Standard Cost Card
DM
Steel
3.5 units
$15 each
Special Handle
2 set
$5 each
Specialty Seat
1 unit
$14 each
Chain
1 unit
$6 each
Tires
2 unit
$10 each
Expanded Shift
1 unit
$25 each
Brake Unit
1 unit
$6 each
Total DM
DL
5 hours
$14 per hour
OH
5 hours
$5.03 per DL hour
Unit Production Cost
Ending finished goods inventory in units - Deluxe Bikes
Ending finished goods inventory in dollars - Deluxe Bikes
Total Ending Finished Goods Inventory
Total
$30
$4
$4
$6
$20
$8
$6
$78
$28
$10
$116
$5.03 OH cost per DLH

Unit Product Cost unde
$
866
100,495
122
27,790
128,285
$53
$10
$14
$6
$20
$25
$6
$134
$70
$25
$229
Unit Product Cost unde

Ending Inventory Budget
$5.03 OH cost per DLH contains allocated VOH and allocataed FOH.
Unit Product Cost under the Full (Absoprtion) Costing
Unit Product Cost under the Full (Absoprtion) Costing

Selling and Administrative Expense Budget
Selling and Administrative Budget
Q1
Budgeted sales (by bicycle)
Basic
Deluxe
Variable S&A Expense
Basic
Deluxe
Total Variable S&A
Basic
Deluxe
Total Variable S&A
Budgeted Fixed S&A Expenses
Advertising
Executive Salaries
Property Taxes
Office Rent
Cleaning Fees
R&D Costs
Total Budgeted Fixed S&A Expense
Total S&A Expense
Q2
2010
Q3
Q4
Year
4,000
2,000
4,080
2,100
4,162
2,205
4,245
2,315
16,486
8,620
$15
$20
$15
$20
$15
$20
$15
$20
$15
$20
$60,000 $61,200 $62,424 $63,672 $247,296

$40,000 $42,000 $44,100 $46,305 $172,405
$100,000 $103,200 $106,524 $109,977 $419,701
$31,250
$16,250
$1,950
$3,000
$1,500
$4,625
$58,575
$31,250
$16,250
$1,950
$3,000
$1,500
$4,625
$58,575
$31,250
$16,250
$1,950
$3,000
$1,500
$4,625
$58,575
$31,250 $125,000
$16,250 $65,000
$1,950
$7,800
$3,000 $12,000
$1,500
$6,000
$4,625 $18,500
$58,575 $234,300
$158,575 $161,775 $165,099 $168,552 $654,001

Selling and Administrative Expense Budget
Check #s
16,486
8,620
$247,296
$172,405
$125,000
$65,000
$7,800
$12,000
$6,000
$18,500
Bob's Bicycles Information:

Chapters 14 and 15:
Part One.
Master Budget (Review of ACC 1110)
Bob's Bicycles Limited manufactures and sells two models of bicycles, Basic and Deluxe.
It has a December 31 year-end and is in the process of preparing its master budget
for 2010. Information of 2010 and the balance sheet as at December 31, 2009 are
presented in the "MB Data" sheet.
Required:
1.
Prepare 2010 sales budget and collection schedule.
2.
Prepare 2010 production budget in units.
3.
Prepare 2010 direct material budget and the payment schedule.
4.
Prepare 2010 direct labour budget and the payment schedule.
5.
Prepare 2010 manufacturing overhead budget and the payment schedule.
6.
Prepare 2010 finished goods ending inventory budget.
7.
Prepare 2010 selling and administrative expenses budget and
the payment schedule. Ignore depreciation.
8.
Prepare 2010 cash budget.
9.
Prepare 2010 pro forma income statement.
10.
Prepare 2010 pro forma balance sheet.
11.
Prepare 2010 pro forma cash flow statement.
asic and Deluxe.

ter budget
schedule.
Bob's Bicycles Information:

Chapters 14, and 15:
Refine Flexible Budget (FB) Variances
into respective sets of price and
quantity variances in terms of
manufacturing cost component
That is,
DM FB variance = DM price variance + DM quantity variance
DL FB variance = DL rate variance + DL efficiency variance
VOH FB variance = VOH spending variance + VOH efficiency variance
FOH FB Variance = FOH spending variance + FOH denominator varianc
Chapter 16
Refine Volume Variances into sales quanity, sales mix, market share
and market size vaniance
uantity variance
ency variance
+ VOH efficiency variance
+ FOH denominator variance
ales mix, market share

Basic Information
Budget - Data Input Sheet

Sales Information:
Sales Growth Assumptions:
2% per quarter for the basic model (mature life stage)

5% per quarter for the deluxe model (growth stage)
2,500,000 units
Expected Market Size

Sales in units:
2010
Q1
Q2
2011
Q3
Q4
Year total
Q1
Q2
Basic
4,000
4,080
4,162
4,245
16,486
4,330
4,416
Deluxe
2,000
2,100
2,205
2,315
8,620
2,431
2,553
25,107
Collection Information:
Credit Policy: Cash Sales Credit Sales In same
In next
In third
In fourth
Bad
30%
Quarter
Quarter
Quarter
Debt
70% Quarter
Collection Policy
60%
30%
9%
0%
1%
Budgeted Receipts in Current Year

Q2
Q3
Q4
$0
$0
$0
$56,785
$0
$0
$56,785
$0
$0
Year
$49,127
$246,069
$295,196
Collections from prior year:

Prior
Year
Q3
Q4
Actual
Actual
Sales
Collected
$779,800
$725,214
$901,350
$648,900
Q1
$49,127
$189,284
$238,411
Manufacturing Information:
Direct Materials Ending Inventory
Basic Bicycle Ending Inventory
Deluxe Bicycle Ending Inventory
15% of next quarter's production needs

20% of next quarter's sales needs
5% of next quarter's sales needs
Direct Material Information:
Basic Bike
Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Deluxe Bike
Steel
Special Handles
Units
Needed
2
2
1
1
2
1
1
3.5
2
Cost per
Unit
$15.00
$2.00
$4.00
$6.00
$10.00
$8.00
$6.00
$15.00
$5.00
Cost per
Bike
$30.00
$4.00
$4.00
$6.00
$20.00
$8.00
$6.00
$78.00
2009
Ending
Inventory
1295
1286
640
652
1275
609
658
$52.50 *
$10.00
Direct Labor Information:

Hours of DL per Basic bike:
Hours of DL per Deluxe bike:
Wages per Hour:
Manufacturing OH Information:
Variable OH Allocation per DL hr:
Fixed OH per year:
Amount of Fixed OH from Depr:
Standard Cost:
Basic Bike
Deluxe Bike
32

Basic Information
Specialty Seat
$14.00
$14.00
Chain
Tires
Expanded Shift
Brake Unit
1
2
1
1
$6.00
$10.00
$25.00
$6.00
$6.00 *
$20.00 *
$25.00
$6.00 *
$133.50
26
A/P Purchase Payment Policy

Payments made in current Q
Payments made in next Q
34
* inventory for standard items is used for both bikes

but only shown here for the Basic Bike
Prior year purchases
Actual
Total Purch
$452,650

Basic Information
Selling and Administrative Expense Information:

Variable S&A for Basic bikes:
Variable S&A for Deluxe bikes:
2009
Ending
$15
$20
Unit Selling
Inventory Price
Sales Mix
807
$150
65.67%
98
$350
34.33%
Fixed S&A Expenses per year:

Advertising
100.00%
$125,000
Executive Salaries
$65,000
Property Taxes
Office Rent
$7,800
$12,000
Sales
Cleaning Fees
$6,000
Inventory
R&D Costs
$18,500
Credit/Collections
Purchasing
Accounting
Production
Cash Flow and Investment Information:

Requirements
Minimum Cash Balance:
$100,000
Borrow at the beginning of each quarter,
Simple interest expense is paid at end of each quarter,
Repay principal at the end of each quarter when applicable.
Dividends
Required Dividend Payment each Qtr:
of DL per Basic bike:

DL per Deluxe bike:
Wages per Hour:
2
5
$14
$10,000
Planned Expansion (Purchase of Equipment)

Budgeted Purchases in Current Year
Q1
Q2
Q3
$50,000
$75,000
$40,000
Debt Information:
Information:
Allocation per DL hr:
$1.75
Fixed OH per year:

Fixed OH from Depr:
$250,000
25%
116
229
Amount owed on bond

Interest rate on bond
$997,600
5%
Line of Credit Max: $2,000,000

Interest Rate on LofC:
12%
Common Stock information:
Shares of stock outstanding:
100,000 at

Basic Information
Payment Policy
current Q
75.0%
25.0%
Miscellaneous Information:
The company's tax rate is:
30%
Last year the company paid taxes of: $108,500
Amount of last year's tax to pay this year:
105%
Total tax to prepay this year: $113,925
Payment due each quarter: $28,481
year purchases
Actual
Paid
$338,700
Q1
$113,950
Budgeted Payments in Current Year

Q2
Q3
Q4
Year
$0
$0
$0 $113,950

Basic Information
Bob's Bicycles
Balance Sheet
ormation:
As of December 31, 2009
Assets
Current Assets
Cash
$30,176
Accounts Receivable
$295,196
Direct Materials Inventory

Finished Good Inventory
$51,413
$116,060
Total Current Assets
$492,845
Property, Plant, and Equipment

Building
Equipment
Accumulated Depr - Equipment
of each quarter,
rter when applicable.
$1,500,000
$1,500,000
($875,000)
Total PPE
$2,125,000
Total Assets
$2,617,845
Liabilities and Stock Holder's Equity

Liabilities
Accounts Payable
Bonds Payables
Q4
$22,000
Year
$187,000
$10 per share
$113,950
$997,600
Total Liabilities
$1,111,550
Stockholder's Equity
Common Stock (100,000 shares outst $1,000,000
Retained Earnings
$506,295
Total Stockholder's Equity
$1,506,295
Total Liabilities and Stockholder's Equity
$2,617,845

Basic Information
2010: Actual Results Information
Basic
Deluxe
Direct Materials Actuals

Steel
Rubber Handles
Seat
Chain
Tires
Gear Shift
Brake Unit
Special Handles
Specialty Seat
Expanded Shift
Direct Labor hours

Actual Variable Costs
Total Direct Materials
Total Direct Labour
Total Variable Manufacturing Overhead
Total Variable S&A
Actual
Quantity Sold
17,074
8,356
25,430
Total Input
Units
Total Cost
63,767
$1,002,772
34,427
$85,393
17,214
$60,585
25,596
$165,545
51,192
$536,593
17,214
$141,668
25,596
$172,145
16,765
$87,874
8,383
$149,874
8,383
$189,244
$2,591,693
77,559
($2,591,693)
($1,126,246)
($139,878)
($438,604)
Actual Fixed Costs

Maufacturing Costs
S&A Costs
($260,000)
($237,050)
Market Data
Actual Market Size
2,675,000
VOH Rate
FOH Rate
Actual Sales
Revenue Sales Mix
67.14%
$2,475,730
$2,966,380
32.86%
100.00%
Actual
$
1.804
$
3.352
Flexible Budget and Sales Volume Variances

Bob's Bicycles
Contribution Margin Income Statement
and Variance Analysis
For Year ended December 31, 2010
Sales
F
(Planned vol. @ Std. Price)
Volume
or
Static budget
Variance
U
Basic
16,486
Deluxe
8,620
Per Unit
Sales Revenue
Basic
Deluxe
Total Sales Revenue
Overall
(formulated)
$150.00
$350.00
$2,472,965
$3,017,088
$5,490,052
$88,135
($92,488)
($4,352)
F
U
U
$78.00
$133.50
$1,285,942
$1,150,803
$2,436,745
$45,830
($35,277)
$10,553
U
F
U
$28.00
$70.00
$461,620
$603,418
$1,065,038
$16,452
($18,498)
($2,046)
U
F
F
$3.50
$8.75
$57,703
$75,427
$133,130
$2,056
($2,312)
($256)
U
F
F
$15.00
$20.00
$247,296
$172,405
$419,701
$8,814
($5,285)
$3,529
U
F
U
Total Basic Bike Variable Costs

Total Deluxe Bike Variable Costs
Total Variable Costs
$124.50
$232.25
$2,052,561
$2,002,053
$4,054,614
$73,152
($61,372)
$11,780
U
F
U
Basic Bike Contribution Margin

Deluxe Bike Contribution Margin
$25.50
$117.75
$420,404
$1,015,034
$14,983
($31,115)
F
U
Variable Costs
Direct Materials
Basic
Deluxe
Total Direct Materials
Direct Labor
Basic
Deluxe
Total Direct Labor
Variable Manufacturing Overhead

Basic
Deluxe
Total Variable Manufacturing Overhead
Variable S&A
Basic
Deluxe
Total Variable S&A
Total Contribution Margin
$1,435,438
Fixed Costs
Manufacturing Costs
S&A Costs
$250,000
$234,300
Total Fixed Costs
$484,300
Oprating Income
$951,138
($16,132)
N/A
N/A
($16,132)
Sales Volume Variances

Bicycles
n Income Statement
nce Analysis
ecember 31, 2010
(Actual vol. @ Std. Price)
Flexible budget
Basic
17,074
Deluxe
8,356
Per Unit
Overall
Flexible
Budget
Varaince
F
or (Actual vol. @ Actual Price)
U
Actual Results
17,074
8,356
(formulated)
Overall
$150.00
$350.00
$2,561,100
$2,924,600
$5,485,700
($85,370)
$41,780
($43,590)
U
F
U
$2,475,730
$2,966,380
$5,442,110
$78.00
$133.50
$1,331,772
$1,115,526
$2,447,298
$144,395
$2,591,693
$478,072
$584,920
$1,062,992
$63,254
$1,126,246
$59,759
$73,115
$132,874
$7,004
$139,878
$256,110
$167,120
$423,230
$15,374
$438,604
$2,125,713
$1,940,681
$4,066,394
$230,027
$4,296,421
$28.00
$70.00
$3.50
$8.75
$15.00
$20.00
$124.50
$232.25
$25.50
$117.75
$435,387
$983,919
$1,419,306
($273,617)
$1,145,689
$250,000
$234,300
$10,000
$2,750
$484,300
$12,750
U
U
$260,000
$237,050
$935,006
($286,367)
$497,050
$648,639
DM Variances
Overall:
Output Flexible Budget

Actual Output x Std input Price
Input Flexible Budget

Actual Input x Std Input price
$ 2,447,298.00
Cannot be done due to multiple

DM inputs
Flex Budget Variance
$ (144,395.40) U
Steel:
Basic
Deluxe
Total
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Rubber Handles
Basic
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Seat
Basic
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Chain
Basic
Deluxe
$
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Tires
Basic
Deluxe
$
Usage Variance
Price Variance

$
- F
Gear Shift Basic
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Break unitsBasic
Deluxe
$
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Specialty Handles
Deluxe
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Specialty seat
Deluxe
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Expanded Shift
Deluxe
Usage Variance
$
- F
Price Variance
$
- F
$
- F
Total Usage var
Total Flex Budget Var
Total price var
Actual
Actual Input x Actual input price
$ 2,591,693.40
DL Variances

Overall
Efficiency Var
$
- F
Rate Variance
$
- F
$
- F
Actual
VOH Variances

Overall
Efficiency Variance
$
- F
Spending Variance
$
- F
$
- F
Actual
FOH Variances
Overall:
Master Budget
Actual
FOH Spending Variance

$
- F
Production Volume Variance

$
- U
Applied FOH
Standard DLH based on actual volume
$
Volume Variance
Sales Price Variance

Flexible Budget
Actual
Basic
$
Deluxe
Total
Sales Volume Variance CM Basis

Master Budget
Basic
Flexible Budget
Volume Variance
$
Deluxe
Total
Sales Quantity Variance
Sales Mix Variance
Basic
Deluxe
$
U
U
U
Market Share Variance

Weighted Average CM
Basic
Deluxe
Market Size Variance
U
U
U

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Porter's Problems Co.

Sales and Collections Budget

Collections from 2009

$ 600,000 $ 612,000 $ 624,240 $ 636,725 $ 2,472,965

Schedule of Cash Collections

Porter's Problems Co.

Two additional quarterly information is perpared

Collection information from "MB Data": B13:I23

Porter's Problems Co.

30% of credit sales is collected in the following quarter of sales;

Porter's Problems Co.

4,000 4,080 4,162 4,245

16,486 4,330 4,416

2,000 2,100 2,205 2,315

8,620 2,431 2,553

Porter's Problems Co.

Porter's Problems Co.

Direct Materials Needed

Desired Ending Inventory

Porter's Problems Co.

Less: Beginning Inventory

Direct Materials to be Purchased

Cost per unit of Direct Materials

Cost of Direct Materials to be purchased

Porter's Problems Co.

$241,225 $234,613 $242,646 $251,006

Schedule of Cash Payments

Porter's Problems Co.

Porter's Problems Co.

Porter's Problems Co.

Porter's Problems Co.

DL hours per bicycle

Total DL hours needed

Porter's Problems Co.

Schedule of Cash Disbursements for Overhead

Porter's Problems Co.

Total Ending Finished Goods Inventory

$5.03 OH cost per DLH

Unit Product Cost unde

Porter's Problems Co.

Unit Product Cost under the Full (Absoprtion) Costing

Porter's Problems Co.

$60,000 $61,200 $62,424 $63,672 $247,296

$158,575 $161,775 $165,099 $168,552 $654,001

Porter's Problems Co.

Bob's Bicycles Information:

asic and Deluxe.

Bob's Bicycles Information:

ales mix, market share

Porter's Problems Co.

Budget - Data Input Sheet

2% per quarter for the basic model (mature life stage)

Expected Market Size

Budgeted Receipts in Current Year

Collections from prior year:

15% of next quarter's production needs

Direct Material Information:

Direct Labor Information:

Porter's Problems Co.

A/P Purchase Payment Policy

* inventory for standard items is used for both bikes

Porter's Problems Co.

Selling and Administrative Expense Information:

Fixed S&A Expenses per year: