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NAME:______________________________Stars and Stripes Inc. produces flags for government buildings. It forecaststhat it will need to produce 90,000 flags for 2010. It budgets the following costsfor the year: ost per flag!aterials "2 yards cloth # $1.%0 per yard& $ '.00

(abor "1 hour # $10 per hour& $10.00)ariable overhead "1 labor* hour # $+ per labor*hour& $ +.00

udgeted total fi-ed overhead $+%,000

ctual results for the year were:/utput "sales in units& 10%,000 flags!aterials purchased and used 200,000 yards of cloth# 1.'% per yardctual labor 100,000 hours costing $1,01+,000ctual )ariable /verhead $'+0,000ctual i-ed /verhead $+,000

a. ompute the material price and efficiency variances and prepare the ournal entries whichaccount for them.

b. ompute the labor price and efficiency variances and prepare the ournal entries whichaccount for them.

c. ompute the variable overhead spending and efficiency variances and prepare the ournalentries which account for them.

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d. ompute the fi-ed overhead spending and production*volume variances and prepare theournal entries which account for them.

e. 3repare the ournal entries to close out all variances e-cept production*volume variance toost of 4oods sold.

f. 4iven values as follows at year*end, prepare the ournal entry to close out the production*volume variance:

5or6*in*3rocess 1%0,000inished 4oods 1%0,000ost of 4oods Sold 1,200,000

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School Supplies, Inc. "SSI& purchases boo6s from publishers who sell large uantities at adiscount and resells them to schools at discounted prices. ;ou have been as6ed to prepare thecompanyhe following information is provided.

1. ash in ban6 on =anuary 1 is $'',000.2. ctual sales for 7ovember and ?ecember, and budgeted sales for =anuary are

7ovember ?ecember =anuary+2,000 '',000 2@,000

ash from sales are received %0A in the month of sale, '0A the month after sale and1%A two months after sale. ">he remaining %A is a bad debt and is never received.&

'. Selling and dministrative e-penses are e-pected to be $20,000 "which

includes 2,000 in depreciation&

+. )endors provide a 1A discount for purchases paid for in the month of purchase.SSI pays for B%A of its purchases in the month of purchase and 2%A ofpurchases in the month after purchase. 3urchases in 7ovember,?ecember and =anuary, are $2,000, '0,000, and 20,000 respectively.

%. $1%,000 worth of computer euipment will be bought for cash in =anuary.

3repare the following schedules to then determine what the cash balance on =anuary '1 is.

1. 3repare a schedule of cash receipts for =anuary.

2. 3repare a schedule of cash disbursements for inventory purchases for =anuary.

'. 3repare a schedule of other cash disbursements for =anuary.

+. ash =anuary '1:

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pplestein ma6es a cardiac surgical device. >he goal for 2012 is to reduce usage of surgicalsteel "direct material& usage per unit. 7o defective units are currently produced.!anufacturing conversion costs depend on production capacity defined in terms of units ofthe device that can be produced. >he following additional data are available for 2011 and

2012:

2011 2012

Cnits of cardiac surgical device produced and sold 100 110Selling price $',000 $2,%0Surgical steel "direct material& "ounces& @00 @'Surgical steel cost per ounce $100 $110!anufacturing capacity in units 12% 120>otal manufacturing conversion costs $B%,000 $B2,000

!anufacturing conversion costs per unit of capacity $@00 $@00

a& 5hat is operating income for 2011D

b& 5hat is operating income for 2012D

c& ccount for the change in operating income on the balanced scorecard.