Analysis of Performance Reports and Budgets in Accounting

School: Indiana Institute of Technology - Course: ACC 2140 - Subject: Accounting

HORNGREN'S ACCOUNTING - Eleventh Edition Chapter 22: Master BudgetsPage 1 of 10Chapter 22 Homwork Problems (20 points total) You must complete all fields highlighted in this green Answers in red have been provided for you by the instructor Name:Emma Lehman E22-21 (1 point) Solution: RODRIGUEZ TRAVEL GOODS Income Statement Performance Report This YearLast YearVariance Number of suitcases sold20,000 25,000 5,000 Revenue ($250 per unit $150 per unit)500,000 370,000 125,000 Variable expense (60% of sales)(30,000,000)(2,250,000)(750,000) Contribution margin200,000 150,000 500,000 Fixed expense(120,000)(120,000) Operating Income1,880,000 1,380,000 500,000 Write narrative response below Prepare a performance report for this year, which compares this year's result to last year's results. How would you improve Rodriguez's performance evaluation system to better analyze this year's results? Rodriguez should compare this years actual results to this years budget, would help improve Rodriguez performance analyze system.

HORNGREN'S ACCOUNTING - Eleventh Edition Chapter 22: Master BudgetsPage 2 of 10E22-24 (2 points) Prepare a sales budget and a production budget for Gorman for April, May, and June. Solution: GORMAN COMPANY Sales Budget For the Three Months Ended June 30 AprilMayJuneTotal Budgeted Packages to Be Sold5,500 5,950 6,400 17,850 Sales Price Per Package$ 35 $ 35 $ 35 $ 35 Total Sales$ 192,500 $ 208,250 $ 224,000 $ 624,750 GORMAN COMPANY Production Budget For the Three Months Ended June 30 AprilMayJuneTotal Budgeted Packages to Be Sold5,500 5,950 6,400 17,850 Desired Packages in Ending Inventory (see below)595 640 685 685 Total Package Needed6,095 6,590 7,085 18,535 Package in Beginning Inventory125 595 640 125 Budgeted Packages to Be Produced 5,970 5,995 6,445 18,410 Calculations for Desired Packages in Ending Inventory %# PackagesApril10%5,950 595 packages May10%6,400 640 packages June10%6,850 685 packages