Exam 8: Budgeting for Planning and Control

Which of the following refers to the alignment of managerial and organizational goals?

Lumberton Company has the following projected account balances for June 30, 2018: Accounts payable \ 20,000 Sales \ 400,000 Accounts receivable 50,000 Capital stock 200,000 Depreciation, factory 12,000 Retained earnings ???? Inventories (5/31) 90,000 Maintenance, factory 14,000 Inventories (6/30) 90,000 Cash 28,000 Materials used 100,000 Equipment, net 120,000 Office expenses 40,000 Buildings, net 200,000 Insurance, factory 2,000 Utilities, factory 8,000 Factory wages 70,000 Selling expenses 30,000 Bonds payable 80,000 Required: a.Prepare a budgeted income statement for June 2018. b.Prepare a budgeted balance sheet as of June 30, 2018.

The first section of the master budget is the financial budget.

A continuous budget is a moving twelve-month budget.

Which of the following statement is correct regarding a continuous budget?

Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months. What is the number of units of wood that need to be purchased by Roaming Vehicles Company during the first month?

Asian Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months for the current year are as follows: Month Sales October 10,000 November 14,000 December 13,000 Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Asian Lamp expects to sell the lamps for $25 each. January sales is projected at 16,000 lamps. How many lamps should be produced in October?

Which of the following is NOT a key feature of an ideal budgetary system?

The static budget variance for materials is $250 F and the budgeted cost for materials is $52,000. If the budgeted volume is 13,000 and the actual volume is 13,500, then the flexible budget variance is

Incentives are the means used to encourage managers to achieve goals.

The comprehensive financial plans made up of departmental and activity budgets are the __________.

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance \ 11,000+\ 0.11 per machine hour Machining \ 25,000+\ 0.50 per machine hour Setups \ 50 per batch Purchasing \ 200+\ 45 per purchase order Following are the actual costs of producing 85,000 decal s: 5,000 machine hours; 10 batches; 20 purchase orders Maintenance \ 11,500 Machining 28,300 Setups 550 Purchasing 1,000 What is the budget variance for setups in an activity-based performance report?

Analysis that fosters management by exception is

Which of the following is NOT an advantage of participative budgeting?

Cash disbursements and cash excess or deficiency are components of the __________ budget.

Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Rammazzotti Inc., had the following budgeted data: Unit sales for 2018 26,000 Unit production for 2018 26,000 Budgeted fixed overhead for 2018 : Supervision \ 800 Depreciation 2,000 Rent 100 Budgeted variable costs per unit: Direct materials \ 0.15 Direct labor 0.20 Supplies 0.02 Indirect labor 0.05 Power 0.02 $\text { The following actually occurred: }$ Actual unit sales for 2018 24,000 Actual unit production for 2018 28,000 Actual fixed overhead for 2018 : Supervision \ 850 Depreciation 2,000 Rent 100 Actual variable costs: Direct materials \ 3,500 Direct labor 4,900 Supplies 530 Indirect labor 1,250 Power 470 The budgeted cost for direct labor for 2018 was

Operating expense budgets include the marketing expense budget and the __________ expense budget.

The process of setting standards, receiving feedback on actual performance, and taking corrective action whenever actual performance deviates significantly from planned performance.

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance \ 11,000+\ 0.11 per machine hour Machining \ 25,000+\ 0.50 per machine hour Setups \ 50 per batch Purchasing \ 200+\ 45 per purchase order Following are the actual costs of producing 85,000 decal s: 5,000 machine hours; 10 batches; 20 purchase orders Maintenance \ 11,500 Machining 28,300 Setups 550 Purchasing 1,000 What is the budget variance for machining in an activity-based performance report?

Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Laramie had the following budgeted data Budgeted variable costs per unit: Direct materials \ 7.00 Direct labor 10.00 Supplies 1.00 Indirect labor 0.50 Pnwer 0.05 Budgeted fixed overhead for 2018: Supervision \ 4,000 Depreciation 3,000 Rent 2,000 What is the difference in total budgeted costs between the volume range of 4,000 and 5,000 units?