Exam 9: Profit Planning

Boyle Company has put together the following data in order to complete their operating budget for the second quarter in 2011: Additional information: Company policy requires 60 percent of next month's sales (in units)be in ending inventory.This policy was met in March. It takes 2.5 hours of direct labor to produce one unit. The average wage cost is $14. Variable overhead rate is $6 per direct labor hour and fixed overhead is $15,000 per month. Required: A.Prepare a production budget for April,May,June and the quarter in total. B.Prepare a direct labor budget for April,May,June and the quarter in total. C.Prepare an overhead budget for April,May,June and the quarter in total.

The _________________ is the comprehensive financial plan for the organization as a whole.

Which of the following is not true?

A large difference between actual and planned results is feedback that the system is providing adequate control.

A production budget is most important for which of the following?

Figure 9-5. Sully Company provided the following information for last month. There were no beginning and ending inventories. Refer to Figure 9-5.What is operating income for Sully Company for last month?

In preparing the overhead budget,many companies use

Figure 9-1. Saphire Company budgeted the following production in units for the second quarter of the year: Each unit requires four pounds of raw material.Saphire's policy is to have 30 percentage of the following month's production needs for materials in inventory.This policy was met in March. Refer to Figure 9-1.Desired ending inventory for April in pounds equals:

Kanban Company estimated sales of 40,000 units at $6 each.Budgeted cost of goods sold per unit includes $1.20 of direct materials,six minutes of direct labor time at $15 per hour,and unit overhead cost of $1.30.Kanban pays a sales commission of ten percent of sales revenue.Fixed selling and administrative expenses are budgeted at $25,000.Prepare a statement of operating income.

The master budget is

Looking backward to determine what actually happened and comparing it with the previously planned outcomes is

The cash budget includes the beginning balance of cash,cash receipts,cash disbursements,and the ending balance of cash.

Galvern Company provided the following data for July: What is the cost of goods sold?

June Corporation has the following sales forecasts for the first three months of the current year: 75 percent of sales are collected in the month of the sale and the remainder is collected in the following month. What is the cash balance at the end of January,assuming that cash is received only from customers and that $48,000 is paid out during January?

A __________________ is a moving 12-month budget.

Which of the following budgets are needed to calculate a budgeted unit cost?

Borland Company makes backpacks.Its production budget for two months is: Borland uses two types of labor to make the backpacks: cutting labor and sewing labor.Each backpack requires six minutes,on average,of cutting labor.Each backpack requires twenty-four minutes of sewing labor. Borland has fixed overhead of $4,400 per month and variable overhead of $3 per direct labor hour.

The controller of the company usually serves as the __________________.

_________________ consists of beginning cash balance and the expected cash receipts.

Cash receipts must be at least as much as sales.