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ACCT346 Week 6 Homework Assignment

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ACCT346 Week 6 Homework Assignment

ACCT346 Week 6 Homework AssignmentQuestion 1. The Von Pottasnevitch Company sells office products and for the most part has a regulargroup of customers and fairly predictable sales. Many of the company’s customers are offered credit,while other clients do business on a cash basis. The company’s monthly sales are consistently splitbetween 10% cash business and 90% on credit. The credit sales are collected 50% in the same month ofthe sale and the remaining 50% is due the following month. Sales for the upcoming first quarter of thenext year are estimated as follows:January:February:March:$100,000$200,000$150,000Calculate the expected cash collections for February.Question 2. The Walkabout Corporation manufactures boomerangs (its only product). The company’sstandards for manufacturing boomerangs are as follows:Standard direct labor rate per hourStandard direct labor hours per boomerang$ 18.50 per hour0.4 hoursDuring the month of January, the company produced 1,800 boomerangs. Actual production datafor the month follows:Actual direct labor hours workedActual direct labor cost incurred700 hours$ 14,000Part A. Calculate the labor rate variance for the month. Is it favorable or unfavorable?Part B. Calculate the labor efficiency variance for the month. Is it favorable or unfavorable?



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