Exam 10: Reporting and Analyzing Liabilities

Best Shingle's budgeted manufacturing costs for 50,000 squares of shingles are: Fixed manufacturing costs $\quad\$ 12,000$ Variable manufacturing costs $\quad\$ 16.00$ per square Best produced 40,000 squares of shingles during March.How much are budgeted total manufacturing costs in March?

Policies regarding when a difference between actual and planned results should be investigated are generally more restrictive for noncontrollable items than for controllable items.

The denominator in the formula for return on investment calculation is

Another name for the static budget is

For June, Gold Corp.estimated sales revenue at $600,000.It pays sales commissions that are 4% of sales.The sales manager's salary is $285,000, estimated shipping expenses total 1% of sales, and miscellaneous selling expenses are $15,000.How much are budgeted selling expenses for the month of July if sales are expected to be $540,000?

The master budget of Windy Co.shows that the planned activity level for next year is expected to be 50,000 machine hours.At this level of activity, the following manufacturing overhead costs are expected: Indirect labor \ 720,000 Machine supplies 180,000 Indirect materials 210,000 Depreciation on factory building 150,000 Total manufacturing overhead \ 1,260,000 A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead costs of

Return on investment is calculated by dividing

The master budget is not used in the budgetary control process.

The best measure of the performance of the manager of a profit center is the

Certain budget reports are prepared monthly, whereas others are prepared more frequently depending on the activities being monitored.

Management by exception

Chambers, Inc.uses flexible budgets.At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed.If Chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Not-for-profit entities

Which one of the following is a correct statement about residual income?

A flexible budget is prepared before the master budget.

A flexible budget report will show both actual and budget cost based on the actual activity level achieved.

The selection of levels of activity to depict a flexible budget 1. will be within the relevant range. 2. is largely a matter of expediency. 3. is governed by generally accepted accounting principles.

If controllable margin is $300,000 and the average investment center operating assets are $2,000,000, the return on investment is

If a company plans to sell 48,000 units of product but sells 60,000, the most appropriate comparison of the cost data associated with the sales will be by a budget based on

A master budget is most useful in evaluating a manager's performance in controlling costs.