Week 4 Written Assignment - Problems and Exercises

chapter_7_-_p3.xls

Template

P 07-03						Name :
						Section :
Enter appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Leave no cells blank. Ensure to enter "0" wherever applicable.
Enter the unfavorable variances as a negative value .
1.	Sewell, Bagan, and Clark, LLP
	City Branch
	Performance Report
	For the Year Ended December 31
	Partner in Charge: Vanessa Smith
				Actual results		Variance				Flexible budget		Variance				Master budget
	Billed hours				0		0				0		0		0		0
	Revenue				0		0		0		0		0		0		0
	Controllable variable
	costs:
	Direct labor				0		0		0		0		0		0		0
	Variable overhead				0		0		0		0		0		0		0
	Contribution margin				0		0		0		0		0		0		0
	Controllable fixed costs:
	Rent				0		0				0		0				0
	Other administrative
	expenses				0		0		0		0		0				0
	Branch operating income				0		0		0		0		0		0		0
3.	a.	Actual						Flexible						Master
	ROI =		0		0		0		0		0		0		0		0	0
	=		0						0						0
	Residual Income =		0		0		0		0		0		0		0		0	0
	=		0						0						0

P 21-03_Sol				Name :	SOLUTION
				Section :
Enter appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Leave no cells blank. Ensure to enter "0" wherever applicable.
Enter the unfavorable variances as a negative value .
1.	Sewell, Bagan, and Clark, LLP
	City Branch
	Performance Report
	For the Year Ended December 31
	Partner in Charge: Vanessa Smith
			Actual results	Variance			Flexible budget	Variance		Master budget
	Billed hours		4,900	0			4,900	(100)	U	5,000
	Revenue		$ 254,800	$ 9,800		F	$ 245,000	$(5,000)	F	$ 250,000
	Controllable variable
	costs:
	Direct labor		(137,200)	(19,600)		U	(117,600)	2,400	F	(120,000)
	Variable overhead		(34,300)	4,900		F	(39,200)	800	F	(40,000)
	Contribution margin		$ 83,300	$ (4,900)		U	$ 88,200	$(1,800)	U	$ 90,000
	Controllable fixed costs:
	Rent		(30,000)	0			(30,000)	0		(30,000)
	Other administrative
	expenses		(42,000)	3,000		F	(45,000)	0		(45,000)
	Branch operating income		$ 11,300	$ (1,900)		U	$ 13,200	$(1,800)	U	$ 15,000
3.	a.	Actual				Flexible			Master
	ROI =	$11,300	/	$40,000		$13,200	/	$40,000	$15,000	/	$40,000
	=	28.25%				33.00%			37.50%
	Residual Income =	$11,300	-	$ 12,000		$13,200	-	$ 12,000	$15,000	-	$ 12,000
	=	$(700)				$1,200			$3,000