Exam 9: Budgeting

Noel Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on December 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year. -What is the opening inventory in units for April?

Isadore Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below: -What is the variance for occupancy costs in the flexible budget performance report for the month?

Mongelli Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion.The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms.The Inn's overhead budget for the most recent month appears below: The Inn's variable overhead costs are driven by the number of guests. Assuming that the activity levels of 90 guests and 99 guests are within the same relevant range and rounding to the nearest dollar,what would be the total budgeted overhead cost for a month if the activity level is 99 guests?

The Culver Company is preparing its Manufacturing Overhead Budget for the third quarter of the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month, with $16,000 of this amount being factory depreciation. -If the budgeted production for July is 6,000 units,what is the total budgeted factory overhead for July?

Barley Enterprises has budgeted unit sales for the next four months as follows: The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on September 30 was below this level and contained only 600 units. -What is the desired ending inventory for December?

The following is a summarized master budget that Winnipeg Company prepared for January: -What was the total flexible budget variance for January?

Pollitt Potato Packers has a flexible budget for manufacturing overhead that is based on direct labour hours. The following overhead costs appear on the flexible budget at the 200,000-hour level of activity: -At an activity level of 160,000 direct labour hours,what amount would the flexible budget estimate for the utilities?

Parlee Company's sales are 30% in cash and 70% on credit.Sixty percent of the credit sales are collected in the month of sale,25% in the month following sale,and 12% in the second month following sale.The remainder is uncollectible.The following are budgeted sales data: What would be the budgeted total cash receipts in April?

The following is a summarized master budget that Winnipeg Company prepared for January: -What was the total static budget variance for January?

Fairmont Inc.uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs.For example,if the sales manager accepts a rush order that will result in higher than normal manufacturing costs,these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager.What best describes this type of an accounting system?

Windsor Limited makes and sells a single product. The company employs a flexible budgeting system that covers a relevant range from 20,000 units to 25,000 units and a just in time inventory system. Budget data for April, based on 22,000 units, are as follows: -Suppose the company produces and sells 25,000 units instead of the original 22,000 units at an average selling price of $55.What is the company's flexible budget operating income (loss)for April,given the actual sales volume of 25,000 units?

Which of the following best describes a method of budgeting in which the cost of each program must be justified every year?

Budgeting aids planning and controlling the level of both fixed costs and variable costs. Required: Explain the differences,if any,between the planning and controlling of fixed costs and variable costs.

A cash budget by quarters for the Carney Company is given below (note that some data are missing). Missing data amounts have been keyed with either question marks or lowercase letters (a, b, c, etc.); these lowercase letters will be referred to in the questions that follow. (It may be necessary to calculate a value for items where a question mark appears.) The company requires a minimum cash balance of at least $10,000 to start a quarter. All data are in thousands of dollars. -What is the repayment (including interest)of financing during the second quarter (item d),in thousands of dollars?

The LFM Company makes and sells a single product: Product T. Each unit of Product T requires 1.3 hours of labour at a labour rate of $9.10 per hour. LFM Company needs to prepare a Direct Labour Budget for the second quarter of next year. -What would be the budgeted direct labour cost per unit of Product T?

The International Company makes and sells only one product, Product SW. 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: All expenses other than depreciation are paid in cash in the month they are incurred. -If the budgeted cash disbursements for selling and administrative expenses for November total $123,250,then how much was the total selling and administrative budget for November?

Roberts Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 410 units. The company needs to prepare a production budget for the second quarter of the year. -What is the total number of units to be produced in July?

Alaska Company expressed the total expenses (Y) component of its master budget for February with the cost formula Y = $100,000 + $40*X, where X represents the expected number of units of its only product to be manufactured and sold. The budgeted average selling price per unit was $65 for budgeted sales volume 5,000 units. Reported actual results for February were as follows: -What was the flexible budget variance for February?

Justin's Plant Store, a retailer, started operations on January 1. On that date, the only assets were $16,000 in cash and $3,500 in merchandise inventory. For purposes of budget preparation, assume that the company's cost of goods sold is 60% of sales. Expected sales for the first four months appear below: The company desires that the merchandise inventory on hand at the end of each month be equal to 50% of the next month's merchandise sales (stated at cost). All purchases of merchandise inventory must be paid in the month of purchase. Sixty percent of all sales should be for cash; the balance will be on credit. Seventy-five percent of the credit sales should be collected in the month following the month of sale, with the balance collected in the following month. Variable operating expenses should be 10% of sales, and fixed expenses (all depreciation) should be $3,000 per month. Cash payments for the variable operating expenses are made during the month the expenses are incurred. -In a budgeted balance sheet,what would be the merchandise inventory on February 28?

Information on the actual sales and inventory purchases of the Law Company for the first quarter follow: Collections from Law Company's customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Law Company takes full advantage of the 3% discount allowed on purchases paid for by the end of the following month. The company expects sales in April of $150,000 and inventory purchases of $100,000. Operating expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $8,000 is depreciation. The remaining operating expenses are variable with respect to the amount of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Law Company's cash balance on March 1 was $43,000, and on April 1 was $35,000 -What would be the expected cash disbursements during April for inventory purchases?