Exam 8: Budgeting for Planning and Control

The following forecasted sales pertain to Spyware Corporation: Month Sales September \ 40,000 October 50,000 November 30,000 December 20,000 Collection pattern: 65 percent in month of sale 35 percent in month following sale Accounts receivable as of August 31 \7 ,000 Finished goods inventory as of August 31 1,500units Spyware Corporation has a selling price of $2.50 per unit and expects to maintain ending inventories equal to 25 percent of the next month's sales. How many dollars are expected to be collected in December?

The budget director is responsible for directing and coordinating the budgeting process.

When managers intentionally underestimate or overestimate revenues and costs it is called budgetary __________.

A master budgets is an example of a(n):

Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed: Activity Cost Formula Design $\quad \$ 5,000 + \$ 0.05$ per machine hour Machining $\quad \$ 25,000 + \$ 0.01$ per machine hour Setups $\quad \$ 35$ per batch Purchasing $\quad \$ 50 + \$ 15$ per purchase order Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders Design \ 5,080 Machining ? Setups ? Purchasing \ 600 The following variances were given in the activity performance report: Design ? Machining $\quad \$ 40 \mathrm {~F}$ Setups $\quad \$ 15 \mathrm {~F}$ Purchasing ? What is the activity variance for purchasing?

Colorado Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced. After preparing a finished goods inventory budget for August, what is the total ending inventory cost?

Which of the following factors is NOT an advantage of preparing operating budgets?

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 static budget variance for rent is

The capital expenditures budget is a long-term financial plan.

A capital expenditures budget is included in a(n):

The following forecasted sales pertain to Spyware Corporation: Month Sales September \ 40,000 October 50,000 November 30,000 December 20,000 Collection pattern: 65 percent in month of sale 35 percent in month following sale Accounts receivable as of August 31 \7 ,000 Finished goods inventory as of August 31 1,500units Spyware Corporation has a selling price of $2.50 per unit and expects to maintain ending inventories equal to 25 percent of the next month's sales. How many dollars are expected to be collected in September?

The accounts receivable aging schedule aids in determining the timing of cash __________ .

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

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 budgeted setup costs if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

Control can be defined as

Molina Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units. Sales totaled 16,000 units in March. The March finished goods inventory was 4,000 units. End-of-month finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales. The planned production for Ben Company for April is

Operating budgets are

The __________ budget shows the projected sales and prices.

The following forecasted sales pertain to Shankar Company: Month Sales May \ 200,000 June 250,000 July 150,000 August 100,000 Finished goods inventory as of April 30 4,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 30 percent of the next month's sales. What is the budgeted beginning balance in units for finished goods inventory on July 1?

Grace Faces, Inc., has done a cost analysis for the production of reflectors in its factory. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance \ 20,000+\ 3 per machine hour Machining \ 40,000+\ 2 per machine hour Inspection \ 32,000+\ 600 per batch Setups \ 1,200 per batch Purchasing \ 56,000+\ 8 per purchase order What is the budget for maintenance if 10,000 reflectors were made that required 2,200 machine hours, 10 batches, and 3,000 purchase orders?