Exam 6: Master Budget and Responsibility Accounting

Use the information below to answer the following question(s).Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2018.The company had enough beginning inventory of direct materials to produce 24,000 units.Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units.The boxes sell for $3.00 and the company keeps no work-in-process inventory.Direct materials costs for each box total $1.00 while direct labour is $0.50.Factory overhead is $0.20 per box. -How many boxes should Berry's Boxes produce in 2018?

Cooper Company has a production schedule of 18,000 units and a budgeted sales volume of 20,000 units for the current year.In addition, 4,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

Answer the following question(s)using the information below.Furniture Inc.estimates the following number of mattress sales for the first four months of 2019: Finished goods inventory at the end of December 2018 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales. -In going from the sales budget to the production budget, adjustments need to be made for

Use the information below to answer the following question(s).Capable Inc.expects to sell 35,000 athletic uniforms for $80 each in 2019.Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform.Each uniform requires 2.0 square metres (sq.m.)of material which is all added at the start of production.The following inventory levels are expected to apply to 2019: -What is the amount budgeted for cost of goods sold in 2019?

Answer the following question(s)using the information below.The following information pertains to Tiffany Company: Cash is collected from customers in the following manner: 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.Labour costs are 20% of sales.Other operating costs are $15,000 per month (including $4,000 of depreciation).Both of these are paid in the month incurred.The cash balance on March 1 is $4,000.A minimum cash balance of $3,000 is required at the end of the month.Money can be borrowed in multiples of $1,000. -How much cash will be collected from customers in March?

For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units.All other inventories are zero.How many units should be produced?

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018: -How many kilograms of material will need to be purchased for 2018 production and inventory requirements?

Variances sometimes signal to managers that their strategies are ineffective.

Use the information below to answer the following question(s).Gold Corporation has the following sales budget for the last six months of 2019: Historically, the cash collection of sales has been as follows: -Cash collections for October are

Answer the following question(s)using the information below.Sherry and John Enterprises are using the Kaizen approach to budgeting for 2019.The budgeted income statement for January 2019 is as follows: Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. -The Saskatoon location of Catch Fish Inc.(CFI), a chain of stores that cater to fishing enthusiasts, is preparing its activity-based budget for 2020.CFI has three product categories: tackle, rods & reels, general merchandise like clothing and accessories.The following table shows the four activities that consume indirect resources at the Regina store, the cost drivers , cost driver rates, and the cost driver quantity budgeted to be consumed in each activity in 2020. Required: 1.For each product category calculate the activity-cost per unit sold for each of the four activities.2.Based on the result in "Required 1." which product category is most out of line with regard to the others in terms of activity cost per unit of sales? Comment on a possible cause for this difference.

Answer the following question(s)using the information below.Sherry and John Enterprises are using the Kaizen approach to budgeting for 2019.The budgeted income statement for January 2019 is as follows: Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. -Brad Corporation is developing its budgets for 2019 and for the first time will use the Kaizen approach.The initial 2019 income statement, based on static data from 2018, is as follows: Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 12%.Required: Prepare a Kaizen-based budgeted income statement for March of 2019.

Fashion Company has the following projected account balances for April 30, 2018: Required: a.Prepare a budgeted income statement for April 2018. b.Prepare a budgeted balance sheet as of April 30, 2018.

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000. -A rolling budget is a budget or plan that

Describe the concept of kaizen budgeting.

Perry Company has gathered the following information: Perry desires to keep a minimum cash balance of $20,000.Required: Prepare a cash budget for May, and indicate whether or not Perry meets minimum cash requirements.

Answer the following question(s)using the information below.The following information pertains to Tiffany Company: Cash is collected from customers in the following manner: 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.Labour costs are 20% of sales.Other operating costs are $15,000 per month (including $4,000 of depreciation).Both of these are paid in the month incurred.The cash balance on March 1 is $4,000.A minimum cash balance of $3,000 is required at the end of the month.Money can be borrowed in multiples of $1,000. -What is the ending cash balance for March after borrowing, if required?

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000. -Boone Hobbies gross margin for next month is expected to be

Budget Corporation has the following budgeted sales for the next six-month period: There were 30,000 units of finished goods in inventory at the beginning of September.Plans are to have an inventory of finished products that equal 20 percent of the unit sales for the next month.Five kilograms of materials are required for each unit produced.Each kilogram of material costs $10.Inventory levels for materials are equal to 30 percent of the needs for the next month.Materials inventory on September 1 was 10,000 kilograms.Required: a.Prepare production budgets in units for October, November, and December. b.Prepare a purchases budget in kilograms for October, November, and December, and give total purchases in both kilograms and dollars for each month.

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.