1) Test and apply your knowledge of the concepts of managerial accounting.
2) Increase your experience and abilities with respect to report writing.
3) Illustrate scenarios and issues you will face in the "real world."
4) Provide for an additional method of evaluation of your knowledge and skills rather than the traditional quizzes and tests.
Provide detailed computations to calculate the following variances for the year ended December 31,2011, identify the person/department to get additional information from regarding the variances and lastly suggest one plausible explanation for each variance.
a. Detailed Direct Materials Price and Quantity Variances.
b. Detailed Direct Labour Rate and Efficiency Variances.
c. Detailed Variable Overhead Spending and Efficiency Variances.
2) Using the information available to you; provide detailed computations to prepare the following budgets for each of the remaining three quarters of the year 2012.
a. Detailed Production Budget.
b. Detailed Budgeted Direct Materials Purchases.
c. Detailed Budgeted Variable Overhead including the Indirect Materials Purchases.
d. Detailed Budgeted Direct Labour.
e. Detailed Cash Budget with appropriate supporting schedules.
f. Do you agree with Bill's suggestions to update the variable production cost standards of 2011 before preparing 2012? Do you think that Bill is trying to manipulate the budgets of 2012 to make his production department appear to be more productive and avoid any unfavorable variances in the future? Explain why would Bill make such suggestions?