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DeVry University
ACCT346 Weekly Assignment
Week 6
Directions: Your assignment this week is to answer the two questions below. Please note that Question #2 has 2 parts, Part A and Part B. Please show your work for full credit and use the box provided. Please add more rows or columns to the box if needed.
1. Cave Hardware's forecasted sales for April, May, June, and July are $200,000, $230,000, $190,000, and $240,000, respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78% in the following month.
What are the cash collections budgeted for June?
2. Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:
Standard direct labor cost per hour $17
Standard direct labor hours per t-shirt 0.6
During the month of January, the company produced 1,250 t-shirts. Related production data for the month is as follows:
Actual direct labor hours 770
Actual direct labor cost incurred $13,000
2a. What is the direct labor rate variance for the month? Is it favorable or unfavorable?
2b. What is the direct labor efficiency variance for the month? Is it favorable or unfavorable?
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