Direct Materials and Direct Labor Budgets Willison Company produces stuffed toy animals; one of these is Betty Rabbit. Each rabbit takes 0.2 yards of fabric and six ounces of polyfiberfill. Fabric costs $3.50 per yard, and polyfiberfill is $0.05 per ounce. Willison has budgeted production of stuffed rabbits for the next four months as follows:

Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 15 percent of the following month’s production needs and sufficient poly fiberfill be in inventory to satisfy 30 percent of the following month’s production needs. Inventory of fabric and poly fiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy. Each rabbit produced requires (on average) 0.10 direct labor per hour. The average cost of direct labor is $15.50 per hour. Required:

1. Prepare a direct materials purchases budget of fabric for the last quarter of the year, showing purchases in units and in dollars for each month and for the quarter in total.

2. Prepare a direct materials purchases budget of poly fiberfill for the last quarter of the year, showing purchases in units and in dollars for each month and for the quarter in total.

3. Prepare a direct labor budget for the last quarter of the year, showing the hours needed and the direct labor cost for each month and for the quarter in total

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Preparation of a cash budget

Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for July. He plans to develop the budget from the following information:

a. Of all sales, 40 percent are cash sales.

b. Of credit sales, 45 percent are collected within the month of sale. Half of the credit sales collected within the month receive a 2 percent cash discount (for accounts paid within 10 days). Thirty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts.

c. Sales for the second two quarters of the year follow.

d. The company sells all that it produces each month. The cost of raw materials equals 26 percent of each sales dollar. The company requires a monthly ending inventory of raw materials equal to the coming month’s production requirements. Of raw materials purchases, 50 percent are paid for in the month of purchase. The remaining 50 percent is paid for in the following month.

e. Wages total $105,000 each month and are paid in the month incurred.

f. Budgeted monthly operating expenses total $376,000, of which $45,000 is depreciation and $6,000 is expiration of prepaid insurance (the annual premium of $72,000 is paid on January 1).

g. Dividends of $130,000, declared on June 30, will be paid on July 15.

h. Old equipment will be sold for $25,200 on July 4.

i. On July 13, new equipment will be purchased for $173,000.

j. The company maintains a minimum cash balance of $20,000.

k. The cash balance on July 1 is $27,000.

Required:

Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.

Budgetary Performance, Rewards, Ethical Behavior Linda Ellis, division manager, is evaluated and rewarded on the basis of budgetary performance. Linda, her assistants, and the plant managers are all eligible to receive a bonus if actual divisional profits are between budgeted profits and 120 percent of budgeted profits. The bonuses are based on a fixed percentage of actual profits. Profits above 120 percent of budgeted profits earn a bonus at the 120 percent level (in other words, there is an upper limit on possible bonus payments). If the actual profits are less than budgeted profits, no bonuses are awarded. Consider the following actions taken by Linda:

a. Linda tends to overestimate expenses and underestimate revenues. This approach facilitates the ability of the division to attain budgeted profits. Linda believes that the action is justified because it increases the likelihood of receiving bonuses and helps to keep the morale of the managers high.

b. Suppose that toward the end of the fiscal year, Linda saw that the division would not achieve budgeted profits. Accordingly, she instructed the sales department to defer the closing of a number of sales agreements to the following fiscal year. She also decided to write off some inventory that was nearly worthless. Deferring revenues to next year and writing off the inventory in a no-bonus year increased the chances of a bonus for next year.

c. Assume that toward the end of the year, Linda saw that actual profits would likely exceed the 120 percent limit and that she took actions similar to those described in Item b.

Required:

1. Comment on the ethics of Linda’s behavior. Are her actions right or wrong? What role does the company play in encouraging her actions?

2. Suppose that you are the marketing manager for the division, and you receive instructions to defer the closing of sales until the next fiscal year. What would you do?

3. Suppose that you are a plant manager, and you know that your budget has been padded by the division manager. Further, suppose that the padding is common knowledge among the plant managers, who support it because it increases the ability to achieve the budget and receive a bonus. What would you do?

4. Suppose that you are the division controller, and you receive instructions from the division manager to accelerate the recognition of some expenses that legitimately belong to a future period. What would you do?

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Case study on married couples

6.3 Probit regression: A panel study followed 25 married couples over a period of five years. One item of interest is the relationship between divorce rates and the various characteristics of the couples. For example, the researchers would like to model the probability of divorce as a function of 238 Exercises age differential, recorded as the man’s age minus the woman’s age. The data can be found in the file divorce.dat. We will model these data with probit regression, in which a binary variable Yi is described in terms of an explanatory variable xi via the following latent variable model: Zi = ßxi + i Yi = d(c,8)(Zi), where ß and c are unknown coefficients, 1, . . . , n ~ i.i.d. normal(0, 1) and d(c,8)(z) = 1 if z > c and equals zero otherwise. a) Assuming ß ~ normal(0, t 2 ß ) obtain the full conditional distribution p(ß|y, x, z, c). b) Assuming c ~ normal(0, t 2 c ), show that p(c|y, x, z, ß) is a constrained normal density, i.e. proportional to a normal density but constrained to lie in an interval. Similarly, show that p(zi |y, x, z-i , ß, c) is proportional to a normal density but constrained to be either above c or below c, depending on yi . c) Letting t 2 ß = t 2 c = 16 , implement a Gibbs sampling scheme that approximates the joint posterior distribution of Z, ß, and c (a method for sampling from constrained normal distributions is outlined in Section 12.1.1). Run the Gibbs sampler long enough so that the effective sample sizes of all unknown parameters are greater than 1,000 (including the Zi ’s). Compute the autocorrelation function of the parameters and discuss the mixing of the Markov chain. d) Obtain a 95% posterior confidence interval for ß, as well as Pr(ß > 0|y, x).

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Description of the business process

Part 1 of the Final Project, due at the end of this unit, requires you to describe and draw a flowchart of the sales or purchasing process at your organization (or one of your choice). This documentation will provide the basis for Part 2 of the Final Project.

1. Begin with an introduction to your organization. Identify the type of organization (i.e., manufacturing or service). Detail briefly the products or services offered by your organization and the market niche and/or general clientele targeted/serviced.
2. Document the sales or purchasing process.
3. Create a table of the processes, objectives, inputs, and outputs associated with processing the business transactions for the sales or purchasing process.
4. As an appendix, develop a system flowchart of either the sales or purchasing process. Please follow the guidelines for drawing system flowcharts documented throughout your textbook.
5. Conclude with a description of the business process in narrative form, explaining the objectives, events, inputs, and outputs. Make sure to reference key points in the system flowchart.Place your order now for a similar paper and have exceptional work written by our team of experts to guarantee you A Results

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Jim’s Furniture Inc. manufactures furniture in NY. Jim’s uses job-order costing system and uses machine hours to allocate overhead costs. Estimated overhead for the year was $800,000 and estimated machine hours were 50,000 hours. Total machine hours used to the end of November were 45,000 hours. Total actual overhead to the end of November was $680,000. Raw materials inventory at the end of November was $400,000. Jim’s uses a first in first out basis for inventory and calculating COGS. Direct labor is paid $20 per hour in 2017. A summary of Jim’s finished goods inventory for the end of November (beginning of December) is shown below:

On Nov. 30th, 2017 Jim’s had the following jobs in work in process inventory:

Mike’s also had the following production information for the month of December 2017:

Note: All raw materials can be directly traced to a furniture.

Jim’s sold 1,300 chairs, 3,500 large tables, and 4,600 lounge chairs in December 2017.

In December 2017, total materials purchased were $200,000, supervisors’ salary was $18,000, and machine depreciation was $44,000. There was no other manufacturing overhead occurred in this month.

Required:

1. Determine the ending balance of the following accounts at the end of December to help Jim’s prepare for the 2017 annual financial statements. (Hint: calculate the predetermined overhead rate to allocate overhead.) Please round to nearest dollar.

2. Calculate the amount of under- or over – applied overhead for 2017.

3. Discuss whether Jim’s should use direct labor hours instead of machine hours to apply their overhead, considering the “criteria” for choosing a driver for overhead allocation.

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