Reference no: EM132476964

BUSI 2083 Managerial Accounting Assignment - Yorkville University, Canada

Question 1 - Cash Budgeting

Raptors Rugs has forecasted sales for the following period.

	Sales
May	$10,800
June	$14,400
July	$9,000
August	$12,600
September	$15,300
October	$16,200

Revenue was $12,000 in March and $14,000 in April.

20% of sales are cash, the rest are on account.

24% of sales on account are collected in the month of sale.

38% of sales on account are collected in the next month and 30% two months after the month of sale.

8% of sales on account have historically have been uncollectible.

REQUIRED -

1. Create a monthly cash collection budget for Raptors Rugs from May through October.

2. Determine what would be the accounts receivable at the end of October.

Question 2 - Cost Volume Profit Analysis

Raj, CEO of the Toronto Symphony Orchestra hired you as the controller of this expanding enterprise. While you toured the premises, Raj discussed his expansion plans for TSO. The plans for expansion include the construction of a new 800-seat concert hall for use in musical and theatre performances as well as more teaching studios and practice rooms.

Raj has partnered with Angela, a drama instructor, to establish the Toronto Theatre Group (TTG) as part of TSO. TTG will use the concert hall (with 800 seats) for rehearsals for four groups (classical theatre, youth theatre, musical theatre, and improvisation). Each group requires three hours per week to rehearse and there are two 12-week sessions in the year - one each in spring and fall. An additional 20 hours per session is devoted to performances. TTG will employ a drama instructor, a vocal instructor and a dance instructor who will each be paid $45,000 annually. Books & learning materials will also be needed at a rate of $80 annually per student.

Three part-time employees at $18 per hour will be needed for set assembly for four hours per week for each week that TTG sessions are operating. TSO will incur additional utilities costs of $40 per hour the hall is used. There will be two performances per session for each group and ticket prices for similar performances average $17. The performances are expected to sell at 80% of capacity regardless of student enrolment. Each group is limited to 25 students. Costumes cost an average of $100 per year and will be sold to students at 85% of cost. Set design costs average $5,000 per session per group.

Average market pricing is $350 per student. Raj would like you to determine the break-even number of students if he charges $270 per student per session to stimulate demand.

Question 3 - Variance Analysis

St Hubert manufactures cupcakes (in packages of 6). The following is information from the last period:

1. Manufactured 4,000 packages

2. Direct materials:

a. Purchased and Used 4,300 pounds @ $15.50 per pound;

b. Standard price is $16 per pound; standard quantity is 1 pound per package

3. Direct labour:

a. Actual cost was $195,200 for 6,400 hours worked

b. Standard hours per package produced, 1.5 hours; standard rate per hour, $30

Required -

a) Calculate the direct material price and efficiency variances for the past month. Ensure you indicate Favorable or Unfavorable for each variance.

b) Calculate the direct labour rate and efficiency variance for the past month. Ensure you indicate Favorable or Unfavorable for each variance.

Question 4 - Variable and Absorption Costing

How can variable costing be used as a performance measurement tool when looking at inventory valuation?

Question 5 - Make Vs Buy

MAKE VS BUY - Maple Garden Produts (MGP) currently purchases BBQ sauce from an external supplier but is thinking about bringing it in-house.

Currently, MGP acquires 500 barrels (100,000 gallons) of BBQ sauce on a monthly basis.

Each barrel of BBQ sauce cost $64 per barrel.

Transportation costs were paid by MGP and were $8 per barrel.

MGP ran 24 hours a day for five days a week (each day had three separate eight-hour shifts).

The average worker wage was $20/per HR.

Workers take an average of 10 minutes to handle eah barrel (including sanitation, adding other componets, etc.).

Additoinal procurement costs (including overhead) were $0.02 per gallon.

If MGP were to instead produce the product internally, the following would occur:

The mix would be 60% ketchup, 20% mayo, and 20% water.

Ketchup would cost $0.15 per gallon, including freight.

Mayo costs $0.1875 per gallon but is delivered in 15,000 gallon quantities.

Water would only cost $0.025 per gallon.

The production department believes the change to in-house would not require any incremental workers.

However, producing in-house would take up more of the current staff's time.

It is estimated that moving in-house would lead to total other costs (DL and MOH) of approximately $0.105 per gallon of BBQ sauce.

This was under an assumption of standard costing.

Should MGP make or buy the product?

Question 6 - Capital Budgeting

Annual cash inflows from three competing investment opportunities are given below. Compute the present value of the cash inflows for each investment using a 15% discount rate. The initial investment is $1,000 for Option A, $1,500 for Option B, and $2,500 for Option C.

Year	Option A	Option B	Option C
1	$500	$2,000	$2,000
2	$1,000	$1,500	$1,500
3	$1,500	$1,000	$1,000
4	$2,000	$500	$500
5	$1,000	$700	$3,000
Total	$6,000	$5,700	$8,000

Which option has the highest PV of cash flows?