Exam 18: Budgeting and Control

Which of the following statements is NOT true of the master budget?

In a personal budget, the amount of income left after covering the withdrawals and fixed expenditures is referred to as:

The budget that details immediate goals for revenues, production, expenses, and cash for the next period is called:

Exhibit 18-4 Playtime Toys began operations on January 1, 2011. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy: Manufacturing overhead is applied at a rate of $4 per direct labor hour. -Refer to Exhibit 18-4. Given the information above, the cost of direct materials used in January would be:

If actual variable costs per unit are equal to estimated variable costs per unit and a static budget is used, fewer units produced will show:

Exhibit 18-4 Playtime Toys began operations on January 1, 2011. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy: Manufacturing overhead is applied at a rate of $4 per direct labor hour. -Refer to Exhibit 18-4. Given the information above, ending inventory would be:

Exhibit 18-8 Cheroke Company had an accounts receivable balance of $60,000 at December 31, 2011. Projected sales for the first three months of 2012 are: All sales are credit sales. Cheroke Company usually collects 40% of its sales during the month of sale, 50% in the month following the sale, and 10% in the second month following the sale. -Refer to Exhibit 18-8. Given the information above, cash collections during February should be:

Bondy Corporation makes widgets. The following are needed to make 1 widget: The cost of wood is 30 cents per board foot, the cost of paint is $4 per gallon, and employees are paid $12 per hour. Also, variable manufacturing overhead is applied at the rate of $6 per direct labor hour. Given this information, the total direct materials cost of making 150 widgets is:

The Sho-lo Company makes measuring devices. The unit sales forecasts for measuring devices for the four quarters of 2011 and the first quarter of 2012 are as follows: As of December 31, 2012, Sho-lo has 6,000 units in inventory. The company likes to maintain 20% of the next quarter's sales in inventory. Prepare a production budget for each of the four quarters of 2011 for measuring devices.

In preparing the sales budget, management should consider:

A static budget would be appropriate for:

Which of the following is NOT included in the manufacturing overhead budget?

Which of the following would NOT be in the overhead budget of a hotel?

Pro-forma financial statements typically include all of the following EXCEPT:

Exhibit 18-4 Playtime Toys began operations on January 1, 2011. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy: Manufacturing overhead is applied at a rate of $4 per direct labor hour. -Refer to Exhibit 18-4. Given the information above, the manufacturing overhead cost per toy would be:

Dean's Dairy uses 4 gallons of milk to make 1 batch of cheese. Dean currently has 40 gallons of milk and desires to maintain an inventory of 20 gallons of milk. If 49 batches of cheese will be produced, how much milk must be purchased?

Describe the differences between authoritative budgeting and participative budgeting. Include advantages of each type of budgeting.

The production budget is computed as:

The cash payments section of a cash budget has information from which of the following:

Exhibit 18-8 Cheroke Company had an accounts receivable balance of $60,000 at December 31, 2011. Projected sales for the first three months of 2012 are: All sales are credit sales. Cheroke Company usually collects 40% of its sales during the month of sale, 50% in the month following the sale, and 10% in the second month following the sale. -Refer to Exhibit 18-8. Given the information above, cash collections during January should be: