QUESTION 13 Cadavieco Detailings cost formula forits materia

QUESTION 13 Cadavieco Detailing\'s cost formula forits materials and supplies is $1,990 per month plus $8 per vehicle. For the month of November, the company planned for activity of 92 vehicle?, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,440 The materials and supplies in the flexible budget for November would be dosest to: O $2,440 o $1,541 o $2,726 O $2,406 QUESTION 14 When preparing a direct materials budget, the required purchases of raw materials in units equals: raw materials needed to meet the production schedule desired ending inventory of raw materials- beginning inventory of raw materials. raw materials needed to meet the production schedule -desired ending inventory of raw materials beginning inventory of raw materials. raw materials needed to meet the production schedule- desired ending inventory of raw materials + beginning inventory of raw materials. raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.

Solution

13)
Budget Equation for Material & Supplies = 1990 (Fixed Monthly) + 8 (Variable per Unit) * No. of Vehicles
Material & Supplies = 1990 + 8 * No. of Vehicles

Flexible Budget for 52 Vehicles
Material & Supplies = 1990 + 8 * 52
Material & Supplies = $ 2,406

14)
Direct Material Budget states - Quantity and value of raw material need to be purchased

Raw material Material Need to be purchased = Raw Material Needed for Production + Raw material needed for ending inventory - Raw Material already available in beginning inventory

Thus correct option is -
a. Raw Material needed to Meet Production Schedule + desired ending invventory - Beginning Inventory

15)
Units of Ice cream to be produced in Jan = 100,000
Units of Ice cream to be produced in Feb = 120,000
Units of Ice cream to be produced in Mar = 150,000

Carrots needed for production in Jan = 100,000 * 4 = 400,000
Carrots needed for production in Feb = 120,000 * 4 = 480,000
Carrots needed for production in Mar = 150,000 * 4 = 600,000

Raw material Material Need to be purchased = Raw Material Needed for Production + Raw material needed for ending inventory - Raw Material already available in beginning inventory

Carrots Needed to be purchased in Feb = Carrots needed in Feb + inventory of carrots at Feb end - Inventory of carrots at feb begin (or Jan end)

Carrots Needed to be purchased in Feb = 480000 + 5% of 600000 (Mar Needs) - 5% of 480000 (Feb Needs)

Carrots Needed to be purchased in Feb = 480000 + 30000 - 24000

Carrots Needed to be purchased in Feb = 486000 Ounces

16)
Fixed Cost remain same at all the levels thus Utility cost budget will be $ 100,000