Exam 8: Budgeting for Planning and Control

The quantitative expressions of plans stated in either physical or financial terms are called __________ .

Sales for October, November, and December are expected to be $200,000, $180,000, and $220,000, respectively, for the Gurumai Company. All sales are on account (terms 2/15, net 30 days) and are collected 50 percent in the month of sale and 50 percent in the following month. One-half of all sales discounts are taken on the average. Materials are purchased one month before being needed, and all purchases and expenses are paid for as incurred. Activities for the quarter are expected to be: ( October November December Materials used \ 40,000 \ 36,000 \ 44,000 Sal aries 70,000 68,000 72,000 Maintenance and repairs 18,000 18,000 18,000 Depreci ation 36,000 36,000 36,000 Utilities and other 14,000 14,000 14,000 Dividends pad -0- 10,000 -0- Payment on bonds 8,000 8,000 8,000 Required: Using the given information, prepare a cash budget for November.

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: $\text { Rammazzotti Inc., had the following budgeted data: }$ Unit sales for 2018 26,000 Unit production for 2018 26,000 Budgeted fixed overhead for 2018 : Superrision \ 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 \8 50 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 flexible budget for direct materials cost in 2018 is

An example of a negative incentive is

Armando Company produces and sells mattresses. It expects to sell 10,000 mattresses in the current year and had 1,000 mattresses in finished goods inventory at the end of the previous year. Armando would like to complete operations in the current year with at least 1,250 completed mattresses in inventory. There is no ending work-in-process inventory. The mattresses sell for $300 each. What would be the total sales for the current year?

A flexible-based budgeting system

Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of the current year are: Month Sales January 3,000 February 4,200 March 3,900 Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April sales is projected at 4,500 boxes. How many boxes should be produced in February?

What is the formula used to compute the units to be produced?

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was $4,150 and the budgeted cost per unit is $10?

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: $\text { Rammazzotti Inc., had the following budgeted data: }$ Unit sales for 2018 26,000 Unit production for 2018 26,000 Budgeted fixed overhead for 2018 : Superrision \ 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 \8 50 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 flexible budget variance for indirect labor for 2018 is

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

Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of the current year are: Month Sales January 3,000 February 4,200 March 3,900 Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April sales is projected at 4,500 boxes. What is the expected sales revenue for March?

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance \ 15,000+\ 4 per machine hour Machining \ 35,000+\ 1 per machine hour Inspection \ 60,000+\ 750 per batch Setups \ 1,000 per batch Purchasing \ 50,000+\ 10 per purchase order What is the total cost for production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

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: $\text { Rammazzotti Inc., had the following budgeted data: }$ Unit sales for 2018 26,000 Unit production for 2018 26,000 Budgeted fixed overhead for 2018 : Superrision \ 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 \8 50 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 static budget variance for supplies is

Alpha Beta Company has a sales budget for next month of $50,000. Cost of goods sold is expected to be 60 percent of sales. All goods are purchased in the month used and paid for in the month following their purchase. The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired. Beginning accounts payable is $13,000. The cost of goods sold for next month is expected to be

Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months. How many units of A1 does Alana Company expect to use in production during the second month?

Discuss the features of an ideal budgetary process.

41. Which of the following refers to quantitative plans for the future, stated in either physical terms or financial terms or both?

Which of the following budgets involves the preparation of cash budgets?

If the static budget variance for materials is $250 F and the budgeted cost for materials is $52,000, then the actual cost of materials is