Exam 6: Master Budget and Responsibility Accounting

Use the information below to answer the following question(s). Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2015.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 2015: -On the 2015 budgeted income statement,what amount will be reported for cost of goods sold?

Use the information below to answer the following question(s). Copper Corporation has the following sales budget for the last six months of 2016: Historically,the cash collection of sales has been as follows: 65 percent of sales collected in month of sale, 25 percent of sales collected in month following sale, 8 percent of sales collected in second month following sale,and 2 percent of sales is uncollectable. -Cash collections for September are

Performance reports for responsibility centres may include uncontrollable costs if they are segregated from controllable costs.

The following information pertains to Amigo Corporation: * Customers paying in the month of sale receive a 2% cash discount. 40% of purchases are paid for in cash in the month of purchase,and the balance is paid the following month. Required: a.Prepare a summary of cash collections for the 4th quarter. b.Prepare a summary of cash disbursements for the 4th quarter.

Russell Company has the following projected account balances for June 30,2016: Required: a.Prepare a budgeted income statement for June 2016 b.Prepare a budgeted balance sheet as of June 30,2016

The budgeted balance sheet must be prepared prior to the cash budget so that the required cash balance can be determined.

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: - Month of sale 30% - Month following the sale 70% 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 disbursed in total in March?

Use the information below to answer the following question(s). Layne Cedar manufactures cedar chests.The estimated number of chests for the first three months of 2016 is as follows: Finished goods inventory at the end of December is 3,000 units.Ending finished goods are equal to 30 percent of next month's sales.April 2016 sales are expected to total 16,000 units. -What should be the budgeted number of chests produced in January 2016?

A master budget

Picture Pretty manufactures picture frames.Sales for August are expected to be 10,000 units of various sizes.Historically,the average frame requires four metres of framing,one square metre of glass,and two square metres of backing.Beginning inventory includes 1,500 metre of framing,500 square metres of glass,and 500 square metres of backing.Current prices are $0.30 per metre of framing,$6.00 per square metre of glass,and $2.25 per square metre of backing.Ending inventory should be 150% of beginning inventory.Purchases are paid for in the month acquired. Required: a.Determine the quantity of framing,glass,and backing that is to be purchased during August. b.Determine the total costs of direct materials for August purchases.

Use the information below to answer the following question(s). Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2015.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 2015: -On the 2015 budgeted income statement,what amount will be reported for gross margin?

Edwards Company has the following projected account balances for June 30,2015: Required: a.Prepare a budgeted income statement for June 2015. b.Prepare a budgeted balance sheet as of June 30,2015.

Describe some of the drawbacks of using the operating budget as a control device.

Beginning with the cash budget,each budget supporting the master budget follows step by step in logical fashion.

Answer the following question(s)using the information below. Furniture Inc.estimates the following number of mattress sales for the first four months of 2016: Finished goods inventory at the end of December 2015 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales. -How many mattresses need to be produced in the first quarter (January,February,March)of 2016?

List and describe the four approaches to budgeting.

Budgets that change (rolling or continuous)motivate managers to look forward.

Activity-based budgeting is a strategy

The master budget reports a large amount of nonfinancial data from various value chain functions.

Clare's Bears manufactures stuffed bears.The company updates it annual budget every month in order to force management to think about the forthcoming 12 months and not just the current budget.This is an example of a