Reference no: EM131181131

ACC 202: Final Project Part II Budget Analysis Submission In your opening paragraph, very briefly introduce the purpose of your paper. Recall that you will be discussing the budget process, “make” or “buy” decisions, and nonfinancial performance measures as explained in your rubric instructions. Three or four sentences are sufficient. Paragraph 1 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss the initial budget process. Paragraph 2 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss the budget variances and potential reasons for variances. Paragraph 3 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss any changes you think the company should make based on the variance analysis. What will the changes accomplish? Paragraph 4 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss any ethical considerations of the changes you have selected based on the variance analysis. Why would you recommend these changes? Paragraph 5 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss the considerations involved in deciding whether to buy a particular component of one of your products or make the product in-house. What factors would you consider? What are the ethical considerations? What implications could this decision have? For each option (i.e., to “make” or to “buy”), how this will impact the efficiencies of your operations? Paragraph 6 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren’s text, discuss what suggestions you would make for nonfinancial performance measures that the company should adopt. What are the pros and cons of each? What are the ethical considerations of your suggestions? Explain the significance of each. Conclusion (Delete this heading in your final paper.) The conclusion reminds the reader what your paper is about and allows you to make a final point without introducing new information. Three or four sentences are sufficient. Sales Budget Peyton Approved Sales Budgets July, August, and September 2015 Budgeted Units Budgeted Unit Price Budgeted Total Dollars Jul-15 18,000 18.00 $324,000 Aug-15 22,000 18.00 $396,000 Sep-15 20,000 18.00 $360,000 Total for the first quarter 60,000 18 $1,080,000 Production Budget Peyton Approved Production Budget July, August, and September 2015 July August Sept. Total Next month’s budgeted sales 22,000 20,000 24,000 66,000 Percentage of inventory to future sales 70% 70% 70% 70% Budgeted ending inventory 15,400 14,000 16,800 46200 Add budgeted sales 18,000 22,000 20,000 60,000 Required units to be produced 33,400 36,000 36,800 106200 Deduct beginning inventory (Previous month ending inventory) -16,800 -15,400 -14,000 -46,200 Units to be produced 16,600 20,600 22,800 60,000 Manufacturing Budget - contains raw materials budget, direct labor budget, and factory overhead budget Peyton Approved Raw Materials Budget July, August, and September 2015 July August Sept. Total Production budget (units) 16,600 20,600 22,800 60,000 Materials requirement per unit 0.5 0.5 0.5 0.5 Materials needed for production 8,300 10,300 11,400 30,000 Add budgeted ending inventory 2,060 2,280 1,980 6,320 Total materials requirements (units) 10,360 12,580 13,380 36,320 Deduct beginning inventory (previous month ending inventory) -4,600 -2,060 -2,280 -8,940 Materials to be purchased 5,760 10,520 11,100 27,380 Material price per unit 7.75 7.75 7.75 7.75 Total cost of direct material purchases $44,640 $81,530 $86,025 $212,195 Peyton Approved Direct Labor Budget July, August, and September 2015 July August Sept. Total Budgeted production (units) 16,600 20,600 22,800 60000 Labor requirements per unit (hours) 0.5 0.5 0.5 0.5 Total labor hours needed 8,300 10,300 11,400 30,000 Labor rate (per hour) 16.00 16.00 16.00 16.00 Labor dollars $132,800 $164,800 $182,400 $480,000 Peyton Approved Factory Overhead Budget July, August, and September 2015 July August Sept. Total Budgeted production (units) 16,600 20,600 22800 60000 Variable factory overhead rate 1.35 1.35 1.35 1.35 Budgeted variable overhead 22,410 27,810 $30,780 $81,000 Fixed overhead 20,000 20,000 20,000 60,000 Budgeted total overhead $42,410 $47,810 $50,780 $14,100 Selling Expense Budget Peyton Approved Selling Expense Budget July, August, and September 2015 July August Sept. Total Budgeted sales $324,000 $396,000 $360,000 1080000 Sales commission percent 12% 12% 12% 12% Sales commissions expense 38,880 47,520 43,200 $129,600 Sales salaries 3,750 3,750 3,750 11,250 Total selling expenses $42,630 $51,270 $46,950 $140,850 General and Administrative Expense Budget Peyton Approved General and Administrative Expense Budget July, August, and September 2015 July August Sept. Total Salaries $12,000 $12,000 $12,000 $36,000 Interest on long-term note 2,700 2,700 2,700 8,100 Total expenses $14,700 $14,700 $14,700 $44,100 Peyton Approved Budget Variance Report For the Year Ended … Actual Results Static Budget Variance Favorable/ Unfavorable Direct materials variances Cost/price variance 240,000 240,000 - Efficiency variance 240,250 212,195 28,055 Unfavorable Total direct materials variance 240,250 212,195 28,055 Unfavorable Direct labor variances Cost /price variance $495,000.00 528,000 (33,000) Favorable Efficiency variance 528,000 480,000 (48,000) Unfavorable Total direct labor variance 495,000 480,000 (15,000) Unfavorable Labor variance actual cost actual quantity standard cost standard quantity $ 15.00 33,000 $ 16.00 30,000 495,000 480,000 Materials variance actual cost actual quantity standard cost standard quantity $ 7.75 31,000 $ 7.75 27,380 240,250 212,195