Exam 14: Standard Costs and Balanced Scorecard

Dart Inc.makes and sells umbrellas.The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year.The following budget data are available: Sales commissions \ 0.60 \ 6,000 Shipping 1.20 Advertising 0.30 Executive salaries 40,000 Depreciation on office equipment 8,000 Other 0.35 28,000 Expenses are paid in the month incurred.If the company has budgeted to sell 8000 umbrellas in October how much is the total budgeted variable selling and administrative expenses for October?

The starting point in preparing a master budget is the preparation of the

Garnett Co.expects to purchase $180000 of materials in July and $210000 of materials in August.Three-fourths of all purchases are paid for in the month of purchase and the other one-fourth are paid for in the month following the month of purchase.How much will August's cash disbursements for materials purchases be?

Lion Industries required production for June is 132000 units.To make one unit of finished product three pounds of direct material Z are required.Actual beginning and desired ending inventories of direct material Z are 300000 and 330000 pounds respectively.How many pounds of direct material Z must be purchased?

A sales forecast

Bear Inc.estimates its sales at 200000 units in the first quarter and that sales will increase by 20000 units each quarter over the year.They have and desire a 25% ending inventory of finished goods.Each unit sells for $35.40% of the sales are for cash.70% of the credit customers pay within the quarter.The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at

It is important that budgets be accepted by

Which of the following statements about budget acceptance in an organization is true?

Teller Co.is planning to sell 900 boxes of ceramic tile with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3900 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

Effective budgeting requires clearly defined lines of authority and responsibility.

What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement

Dolce Co.estimates its sales at 180000 units in the first quarter and that sales will increase by 18000 units each quarter over the year.They have and desire a 25% ending inventory of finished goods.Each unit sells for $25.40% of the sales are for cash.70% of the credit customers pay within the quarter.The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at

A budget can be used as a basis for evaluating performance.

If budgets are to be effective all of the following must be present except

Astor Manufacturing has the following budgeted sales: January $120000 February $180000 and March $150000.40% of the sales are for cash and 60% are on credit.For the credit sales 50% are collected in the month of sale and 50% the next month.The total expected cash receipts during March are:

Teller Co.is planning to sell 900 boxes of ceramic tile with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3900 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted for direct labor for the month?

A merchandiser has a merchandise purchases budget rather than a production budget.

Which of the following items does not follow from the adoption of a budget?

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

Accounting generally has the responsibility for