Exam 8: Budgeting for Planning and Control

Canceco Company produces and sells pillows. It expects to sell 10,000 pillows in the current year and had 1,000 pillows in finished goods inventory at the end of the previous year. Canceco would like to complete operations in the current year with at least 1,250 completed pillows in inventory. There is no ending work-in-process inventory. The pillows sell for $5 each. -Refer to the figure.What would be the total sales for the current year?

The following forecasted sales pertain to Reject City: Month Sales June \ 160,000 July 200,000 August 120,000 September 80,000 Finished goods inventory as of May 31 $\quad$$\quad$$\quad$$\quad$ 6,000 units Reject City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales. What is the budgeted beginning balance in units for finished goods inventory on August 1?

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 was the budgeted cost for direct labour?

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 .What is the expected sales revenue for December?

Which of the following is the most common starting point in the information-gathering process for budgeting?

Which budgets are concerned with the inflows and outflows of cash and with financial position?

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 building and equipment (net)account at the end of July?

Which budgets are comprehensive financial plans made up of various individual departmental and activity budgets?

If the static budget variance for materials is $200 F and the budgeted cost for materials is $52,000,what is the actual cost of materials?

Glenn, Inc. has done a cost analysis for its production of T-shirts. The following activities and cost drivers have been developed: Activity Cost Farmula Maintenance \ 11,000+\ 2 per machine how Machining \ 55,000+\ 3 per machine how Inspection \ 70,000+\ 500 per batch Setups \ 2,000 per batch Purchasing \ 80,000+\ 150 per purchase order Following are the actual costs of producing 75,000 T-shirts: 5,000 machine hours; 10 batches; 20 purchase orders Maintenance \ 20,000 Machining 73,000 Inspection 73,000 Setups 18,000 Purchasing 82,000 -Refer to the figure.What is the budget variance for setups in an activity-based performance report?

The following forecasted sales pertain to Tigers, Inc. Month Sales September \ 400,000 October 500,000 November 300,000 December 200,000 Accounts receivable as of August 31 \7 0,000 Finished goods inventory as of August 31 8,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month’s sales. -Refer to the figure.How many dollars are expected to be collected in October?

Glenn, Inc. has done a cost analysis for its production of T-shirts. The following activities and cost drivers have been developed: Activity Cost Farmula Maintenance \ 11,000+\ 2 per machine how Machining \ 55,000+\ 3 per machine how Inspection \ 70,000+\ 500 per batch Setups \ 2,000 per batch Purchasing \ 80,000+\ 150 per purchase order Following are the actual costs of producing 75,000 T-shirts: 5,000 machine hours; 10 batches; 20 purchase orders Maintenance \ 20,000 Machining 73,000 Inspection 73,000 Setups 18,000 Purchasing 82,000 -Refer to the figure.What is the budget variance for inspection in an activity-based performance report?

Riemay,Inc.,has done a cost analysis for its production of sports cards.The following activities and cost drivers have been developed: Activity Cost Formula Photgerapy \ 50+\ 35 per labour hour Printing \ 25,000+\ 0.01 per machine hour Setups \ 25 per batch Purchasing \ 25+\ 25 per purchase order Following are the actual costs of producing 35,000 cards: 60 labour hours; 500 machine hours; 5 batches; 30 purchase orders Photapraphy ? Printing \ 25,000 Setups ? Purchasing \ 700 The following variances were given in the activity performance report: Photapraphy \1 0F Printing ? Setups \2 0U Purchasing ? i.Find the missing values. ii.Prepare an activity-based performance report in good form.

Glenn, Inc. has done a cost analysis for its production of T-shirts. The following activities and cost drivers have been developed: Activity Cost Farmula Maintenance \ 11,000+\ 2 per machine how Machining \ 55,000+\ 3 per machine how Inspection \ 70,000+\ 500 per batch Setups \ 2,000 per batch Purchasing \ 80,000+\ 150 per purchase order Following are the actual costs of producing 75,000 T-shirts: 5,000 machine hours; 10 batches; 20 purchase orders Maintenance \ 20,000 Machining 73,000 Inspection 73,000 Setups 18,000 Purchasing 82,000 -What is the budget variance for maintenance in an activity-based performance report?