1. Direct Materials Purchases and Direct Labor Budgets. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is derived from the previous exercise for Templeton Corporation.)
2. With regards to direct materials, each unit of product requires 12 square feet of glass at a cost of $1.50 per square foot. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 65,000 square feet.
3. With regards to direct labor, each unit of product requires 2 labor hours at a cost of $15 per hour.

4. Required:

5. Prepare a direct materials purchases budget for Templeton Corporation using a format similar to Figure 9.5 "Direct Materials Purchases Budget for Jerry's Ice Cream".
6. Prepare a direct labor budget for Templeton Corporation using a format similar to Figure 9.6 "Direct Labor Budget for Jerry's Ice Cream".

30. Manufacturing Overhead Budget. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is the same as in the previous exercise for Templeton Corporation.) The following information relates to the manufacturing overhead budget.

With regards to direct materials, each unit of product requires 12 square feet of glass at a cost of $1.50 per square foot. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 65,000 square feet.
With regards to direct labor, each unit of product requires 2 labor hours at a cost of $15 per hour.
Required:

a.Prepare a direct materials purchases budget for Templeton Corporation using a format similar to Figure 9.5 "Direct Materials Purchases Budget for Jerry's Ice Cream".

b.Prepare a direct labor budget for Templeton Corporation using a format similar to Figure 9.6 "Direct Labor Budget for Jerry's Ice Cream".
30.Manufacturing Overhead Budget. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is the same as in the previous exercise for Templeton Corporation.) The following information relates to the manufacturing overhead budget.

Variable Overhead Costs 
Indirect materials $2.50 per unit 
Indirect labor $3.20 per unit 
Other $1.70 per unit
Fixed Overhead Costs per Quarter 
Salaries $50,000 
Rent $60,000 
Depreciation $36,370
Required:
Prepare a manufacturing overhead budget for Templeton Corporation using a format similar to Figure 9.7 "Manufacturing Overhead Budget for Jerry's Ice Cream".
29. Standard Cost and Flexible Budget. Hal's Heating produces furnaces for commercial buildings. The company's master budget shows the following standards information.

Required:

1. Calculate the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead using the format shown in Figure 10.1 "Standard Costs at Jerry's Ice Cream".
2. Assume Hal's Heating produced 320 furnaces during January. Prepare a flexible budget for direct materials, direct labor, and variable manufacturing overhead using the format shown in Figure 10.2 "Flexible Budget for Variable Production Costs at Jerry's Ice Cream".
3. 35. Variance Analysis with Activity-Based Costing. Assume Mammoth Company uses activity-based costing to allocate variable manufacturing overhead costs to products. The company identified three activities with the following information for last quarter.

   Activity	Standard Rate	Standard Quantity per Unit Produced	Actual Costs	Actual Quantity
   Indirect materials	$2.40 per yard	7 yards per unit	$691,650	265,000 yards
   Product testing	$1.50 per test minute	5 minutes per unit	$301,000	215,000 test minutes
   Indirect labor	$4.50 per direct labor hour	4 hours per unit	$930,000	180,000 direct labor hours

   Required:

   Assume Mammoth Company produced 40,000 units last quarter. Prepare a variance analysis using the format shown in Figure 10.11 "Variable Overhead Variance Analysis for Jerry's Ice Cream Using Activity-Based Costing". Clearly label each variance as favorable or unfavorable.

4.  

25. ROI. Pool Accessories, Inc., has two divisions-Furniture and Supplies. (This is the same company as the previous exercise. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume the Furniture division had average operating assets totaling $6,500,000 for the year, and the Supplies division had average operating assets of $1,750,000.

Required:

1. Calculate ROI for each division.
2. What does ROI tell us about each division? Indicate why this measure is useful in evaluating investment centers.