2024 – The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication Compute

The following information is from the manufacturing budget and the budgeted financial statements 
of Fabor Fabrication: 
 
 
 
Compute the budgeted amounts for: 
a. Purchases of direct materials during the year. 
b. Cash payments during the year to suppliers of materials. 

E23.8 
Sales on account for the first two months of the current year are budgeted as follows: 
 
 
 
All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by 30 days); 
collections on accounts receivable are typically made as follows: 
 
 
 
 
Compute the estimated cash collections on accounts receivable for the month of February. 

E23.9 
On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget 
for March, April, and May. All of the company’s sales are made on account. The following information 
has been provided by Spicer’s management: 
 
 
 
 
 
The company’s collection activity on credit sales historically has been as follows: 
 
 
 
 
Spicer’s total cash expenditures for March, April, and May have been estimated at $1,200,000 (an 
average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No 
financing or investing activities are anticipated during the second quarter. 
 Compute Spicer’s budgeted cash balance at the ends of March, April, and May. 

 

E24.2 
The standard costs and variances for direct materials, direct labor, and factory overhead for the 
month of May are as follows: 
 
 
 Determine the actual costs incurred during the month of May for direct materials, direct labor, 
and manufacturing overhead 
E24.4 
Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current month: 
 
 
a. Determine Gumchara’s materials price variance. 
b. Determine Gumchara’s materials quantity variance. 
c. Will Gumchara’s overhead volume variance be favorable or unfavorable? Why? 
E24.6 
 
Marlo Enterprises produces radon mitigation pumps. Information pertaining to the company’s 
monthly direct labor usage is provided below: 
 
a. Compute the company’s labor rate variance. 
b. Compute the company’s labor efficiency variance. 
c. An extremely large order of radon mitigation pumps was filled during the month for exportation 
to Saudi Arabia. Filling this order resulted in extended hours for many of the company’s workers. 
Which labor variance reflects the extra hours worked by Marlo’s employees? Was their time 
well utilized? Explain.