Managerial Accounting, Second Edition by James Jiambalvo
Solving Managerial Accounting Problems Using Microsoft Excel
for Windows Templates by Rex A Schildhouse
Problem P1-1 Budgets in Managerial Accounting
Marie's Pie Company is in the process of preparing a production cost budget for May. Actual costs in
Marie's Pie Company
Production Cost Budget
Production (in pies) 15,000
Ingredient cost (variable) $18,750
Labor cost (variable) 22,500
Rent (fixed) 5,000
Depreciation (fixed) 6,000
Other (fixed) 1,000
Part a . Using this information, prepare a budget for May. Assume that production will increase to
16,000 pies reflecting an anticipated sales increase related to a new marketing campaign.
Marie's Pie Company
Production Cost Budget
Production (in pies) Number
Ingredient cost (variable) Amount
Labor cost (variable) Amount
Rent (fixed) Amount
Depreciation (fixed) Amount
Other (fixed) Amount
Part b . Does the budget suggest that additional workers are needed? Suppose the wage rate is $20
per hour. How many additional labor hours are needed in May? What would happen if management
did not anticipate the need for additional labor in May?
Labor hours used in April: Amount
Labor hours used in April per pie: Amount
Labor hours required in May: Amount
Additional labor hours needed: Formula
FileName: 1a6622c6-5fbe-499b-8f0e-5e826a93cee5.xls, Tab: Problem P1-1, Page 1 of 3, 3/21/2011, 4:36 PM
Part c . Calculate the actual cost per unit in April and the budgeted cost per unit in May. Explain why
the cost per unit is expected to decrease.
Performance Report, Production Costs
For the Months of April and May 2006
Actual - April Budgeted - May
Production (in pies) 15,000 Number
Ingredient cost (variable) $18,750 Amount
Labor cost (variable) 22,500 Amount
Rent (fixed) 5,000 Amount
Depreciation (fixed) 6,000 Amount
Other (fixed) 1,000 Amount
Total $53,250 Formula
Cost per pie: $3.55 Formula
FileName: 1a6622c6-5fbe-499b-8f0e-5e826a93cee5.xls, Tab: Problem P1-1, Page 2 of 3, 3/21/2011, 4:36 PM
Instructions for the Microsoft Excel Templates
Detail and information on Excel is contained within the manual.
Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant
and bring up one of several help menus.
Type your name into the cell "D5". This will be copied by formula to the rest of the pages as required.
Type the due date of your problem into cell "I5". This will be copied by formula to the rest of the pages as required.
Type the instructor's name into cell "D6". This will be copied by formula to the rest of the pages as required.
Type the course identifier into cell "I6". This will be copied by formula to the rest of the pages as required.
The problem is identified for you in cell "B7".
In "DATE" cells enter the date in any of several formats and Excel will format it correctly.
If more than one page is preformatted into the problem, page breaks are preset and formulas are
set to copy the header into the remaining pages.
Place the proper account title in the cell where the word "ACCOUNT" appears on the template.
Place the amount in the cell where the word "AMOUNT" appears on the template. A formula may be placed in
some of these cells.
Enter a number like 914 to signify units or gallons where the word "NUMBER" appears.
Write a formula into cells where the word "FORMULA" appears. In these cells, an amount calculated outside of
Excel can be entered into Excel if desired.
Place the explanation for the entry in the cell where the word "EXPLANATION" appears on the template.
Insert the account number where "ACCT #" appears on the template during posting.
Insert the journal reference where "JOURN #" appears on the template during posting.
Insert the title in the cell where "TITLE" appears on the template.
The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required.
The gray filled cells define the perimeter of the problem and the print area.
The problem is formatted for whole dollars with comma separations (no cents) except where required.
The display may have "Freeze Pane" invoked so column titles remain visible during data entry.
Negative values may be shown as ($400) vice -$400.
Enter a string like: ($259,417 X 12 months) + (0.3651 X 5,434,631) where the word TEXT appears.