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ACC561 Week 5 E20-2 E20-5 BE21-4 E22-5

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E20-2 Zeller Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for $12 and $25, respectively. Because of the intense competition Zeller faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2010 are as follows.

Product Quarter 1 Quarter 2
XQ-103  20,000 25,000
XQ-104  12,000 15,000

No changes in selling prices are anticipated.
Complete the sales budget for the 2 quarters ending June 30, 2010. List the products and show for each quarter and for the 6 months, units, selling price, and total sales by product and in total.

E20-5 Moreno Industries has adopted the following production budget for the first 4 months of 2011.

Month  Units  Month  Units 
January  10,000 March  5,000
February  8,000 April  4,000

Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2010, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month's production requirements.

Instructions
Complete the direct materials purchases budget by month for the first quarter.

BE21-4 Hannon Company expects to produce 1,200,000 units of Product XX in 2010. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Complete the flexible manufacturing budget for the relevant range value using 20,000 unit increments.

E22-5 The standard cost of Product B manufactured by Mateo Company includes three units
of direct materials at $5.00 per unit. During June, 28,000 units of direct materials are purchased
at a cost of $4.70 per unit, and 28,000 units of direct materials are used to produce 9,000 units of
Product B.

Instructions
(a) Compute the total materials variance and the price and quantity variances.
(b) Repeat (a), assuming the purchase price is $5.20 and the quantity purchased and used is
26,200 units.

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