E9-3 Thome and Crede

E9-8 Fuqua Company’s

E9-15 Deitz Corporation

P9-5A The budget committee of Suppar Company

E10-3 Myers Company

E10-5 Fallon Company

E10-17 The South Division of Wiig Company

P10-5A Optimus Company


ACC560 Week 6 chapter 9 and chapter 10 –

Chapter 9 Exercises 3, 8, 15, Problem 5 Chapter

10 Exercises 3, 5, 17, Problem 5


The text book used is Managerial Accounting: Tools for Business Decision Making – 7th Edition Jerry J. Weygandt



E9-3 Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2017). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,300 1,600 2,000 2,400
Tax 3,000 2,200 2,000 2,500
Consulting 1,500 1,500 1,500 1,500

Average hourly billing rates are auditing $80, tax $90, and consulting $110.



Prepare the service revenue (sales) budget for 2017 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.



E9-8 Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2016.



1.  Prepare a production budget for January and February 2017.

2.  Prepare a direct materials budget for January 2017.


E9-15 Deitz Corporation is projecting a cash balance of $30,000 in its December 31, 2016, balance sheet. Deitz’s schedule of expected collections from customers for the first quarter of 2017 shows total collections of $185,000. The schedule of expected payments for direct materials for the first quarter of 2017 shows total payments of $43,000. Other information gathered for the first quarter of 2017 is sale of equipment $3,000, direct labor $70,000, manufacturing overhead $35,000, selling and administrative expenses $45,000, and purchase of securities $14,000. Deitz wants to maintain a balance of at least $25,000 cash at the end of each quarter.




Prepare a cash budget for the first quarter.

Prepare cash budget for a month.


P9-5A The budget committee of  Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2017.


1.  Sales for May are expected to be $800,000. Sales in June and July are expected to be 5% higher than the preceding month.

2. Cost of goods sold is expected to be 75% of sales.

3.  Company policy is to maintain ending merchandise inventory at 10% of the following month’s cost of goods sold.

4. Operating expenses are estimated to be as follows:


Sales salaries $35,000 per month
Advertising 6% of monthly sales
Delivery expense 2% of monthly sales
Sales commissions 5% of monthly sales
Rent expense $5,000 per month
Depreciation $800 per month
Utilities $600 per month
Insurance $500 per month


5. Interest expense is $2,000 per month. Income taxes are estimated to be 30% of income before income taxes.



1.  Prepare the merchandise purchases budget for each month in columnar form.

(a) Purchases:

May $603,000

June $633,150


2.  Prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of goods sold.

(b) Net income:

May $36,470

June $39,830



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