Exam 8: Budgeting for Planning and Control

Villafane, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Design \ 5,000+\ 0.05 per machine hour Machining \ 25,000+\ 0.01 per machine hour Setups \ 35 per batch Purchasing \ 50+\ 15 per purchase order Following are the actual costs of producing 35,000 decals: 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 \ 40 Setups \ 15 Purchasing ? -Refer to the figure.The following variances were given in the activity performance report: Design ? Machining \4 0F Setups \1 5F Purchasing ? What is the actual cost of setups?

General Corporation manufactures boxes.The estimated number of boxes sold for the first three months are as follows: Month Sales January 3,000 February 4,200 March 3,900 Finished goods inventory at the end of December was 900 units.Ending finished goods inventory is equal to 20 percent of the next month's sales.General Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes. - How many boxes should be produced in January?

Van Gogh Inc.is constructing its marketing budget. 1st quarter 2nd quarter 3rd quarter 4th quarter Sales 30,000 40,000 50,000 60,000 Production 35,000 45,000 55,000 65,000 Commissions are $3 per unit sold.Salesperson salaries are $100,000 per quarter.Depreciation is $25,000 per quarter.Travel is $10,000 per quarter.Advertising is $50,000 in the first quarter; $40,000 in the second quarter; $60,000 in the third quarter; and $55,000 in the fourth quarter.What is the budgeted marketing expense for the third quarter? a.$345,000 b.$360,000 c.$735,000 d.$795,000

Rydingsward, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: Activit Cost Formula Maintenance \ 15,000+\ 4 per machine hour Machiring \ 35,000+\ 1 per machine hour Inspection \ 60,000+\ 750 per batch Setups \ 1,000 per batch Purchasing \ 50,000+\ 10 per purchase order -Refer to the figure.What is the budgeted purchasing cost if there was production of 50,000 reflectors that will require 8,000 machine hours,25 batches,and 15,000 purchase orders?

Armati, Inc., is looking for feedback on companyperformance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, Inc., had the following budgeted data: Unit sales 26,000 Unit production 26,000 Budgeted fixed overhead: \ 800 Supervision 2,000 Depreciation 100 Rent 1800 Budgeted variable costs per unit: Direct materials \0 .15 Direct labour 0.20 Supplies 0.02 Indirect labour 0.05 Power 0.02 Actual unit sales 24,000 Actual unit production 28,000 Actual fixed overhead: Supervision \8 50 Depreciation 2,000 Rent 100 Actual variable costs: Direct materials \3 ,500 Direct labour 4,900 Supplies 530 Indirect labour 1,250 Power 470 -Refer to the figure.What is the flexible budget variance for supervision?

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?

Oriental Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months of the current year is as follows: Month Sales October 10,000 November 14,000 December 13,000 Finished goods inventory at the end of September was 3,000 units.Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales.Oriental Lamp expects to sell the lamps for $25 each.January of the following year sales is projected at 16,000 lamps. -Refer to the figure.In going from the sales budget to the production budget,what should adjustments to the sales budget be made for?

Sandy Corporation has a sales budget for next month of $50,000.Cost of goods sold is expected to be 60 percent of sales.All goods are purchased in the month used and paid for in the month following their purchase.The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired.Beginning accounts payable is $13,000. What should be the ending accounts payable for Sandy Corporation?

Campbell, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Campbell had the following budgeted data: Budgeted variable costs per unit Direct materials \7 .00 Direct labour 10.00 Supplies 1.00 Indirect labour 0.50 Power 0.05 Budgeted fixed overhead for 2011 Supervision \ 4,000 Depreciation 3,000 Rent 2000 -Refer to the figure.What are the budgeted costs for rent if 5,000 units were produced?

Which of the following is NOT a responsibility of the budget committee?

When is activity-based budgeting most useful?

Armati, Inc., is looking for feedback on companyperformance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, Inc., had the following budgeted data: Unit sales 26,000 Unit production 26,000 Budgeted fixed overhead: \ 800 Supervision 2,000 Depreciation 100 Rent 1800 Budgeted variable costs per unit: Direct materials \0 .15 Direct labour 0.20 Supplies 0.02 Indirect labour 0.05 Power 0.02 Actual unit sales 24,000 Actual unit production 28,000 Actual fixed overhead: Supervision \8 50 Depreciation 2,000 Rent 100 Actual variable costs: Direct materials \3 ,500 Direct labour 4,900 Supplies 530 Indirect labour 1,250 Power 470 -Refer to the figure.What is the static budget variance for supervision?

Jordan Manufacturing Company expects to incur the following per-unit costs for 1,000 units of production: \begin{array}{ll} \text {Direct materials } & \text { 3 \mathrm{lb} @ \$ 5=\$ 15 } \\ \text { Direct labour } & \text { 1 hr \( \$ 6=\$ 6 \)} \\ \text { Variable overhead } & \text { \( 75 \% \) of direct labour costs} \\ \text { Fized overhead } & \text {\( 50 \% \) of direct labour costs } \\\end{array} -What is the total amount of direct labour included in the direct labour budget?

What is the definition of a flexible-based budgeting system?

General Corporation manufactures boxes.The estimated number of boxes sold for the first three months are as follows: Month Sales January 3,000 February 4,200 March 3,900 Finished goods inventory at the end of December was 900 units.Ending finished goods inventory is equal to 20 percent of the next month's sales.General Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes. - How many boxes should be produced in February?

Schrandt Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below: The June 30th balance sheet follows: Cash \ 25,000 Accounts payable 45,000 Accounts receivable 110,000 Capital stock 300,000 Inventary 54,000 Retained earrings 94,000 Building and equipment (net) 250,000 Actual sales for June and budgeted sales for July,August,and September are given below: June \ 137,500 July 360,000 August 400,000 September 320,000 Sales are 20 percent for cash and 80 percent on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 40 percent of sales.The desired ending inventory is equal to 25 percent of the following month's sales.One quarter of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000,and the monthly depreciation expenses are $7,000. -Refer to the figure.What is the balance of the accounts receivable at the end of July?

Which of the following is an operating budget?

Which of the following is a disadvantage of budgeting?

When the reaction to a budget is negative,resulting in managerial behaviour that is negative for the organization,what is the resulting behaviour known as?

Rydingsward, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: Activit Cost Formula Maintenance \ 15,000+\ 4 per machine hour Machiring \ 35,000+\ 1 per machine hour Inspection \ 60,000+\ 750 per batch Setups \ 1,000 per batch Purchasing \ 50,000+\ 10 per purchase order -Refer to the figure.What is the budget for maintenance if 20,000 reflectors were made that required 3,500 machine hours,12 batches,and 5,000 purchase orders?