Question 1

Describe the concept of kaizen budgeting.

Accepted Answer

Kaizen budgeting explicitly incorporates

Question 2

Use the information below to answer the following question(s).
Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2015.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.
-What will be Berry's Boxes budgeted revenue?

Accepted Answer

A) $54,000 
B) $60,000 
C) $78,000 
D) $79,500 
E) $72,000 
A) $54,000 
B) $60,000 
C) $78,000 
D) $79,500 
E) $72,000

Question 3

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 January 2016?

Accepted Answer

A) 4,400 mattresses 
B) 5,000 mattresses 
C) 6,500 mattresses 
D) 7,100 mattresses 
E) 5,600 mattresses 
A) 4,400 mattresses 
B) 5,000 mattresses 
C) 6,500 mattresses 
D) 7,100 mattresses 
E) 5,600 mattresses

Question 4

Answer the following question(s)using the information below.
The following information pertains to Hepburn 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 $30,000 per month (including $8,000 of depreciation).Both of these are paid in the month incurred.The cash balance on March 1 is $8,000.A minimum cash balance of $6,000 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?

Accepted Answer

A) $88,400 
B) $42,000 
C) $68,400 
D) $96,400 
E) $91,600 
A) $88,400 
B) $42,000 
C) $68,400 
D) $96,400 
E) $91,600

Question 5

Budgets can play both planning and control roles for management.

Accepted Answer

A) True 
 B)False

Question 6

Answer the following question(s)using the information below.
The following information pertains to Hepburn 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 $30,000 per month (including $8,000 of depreciation).Both of these are paid in the month incurred.The cash balance on March 1 is $8,000.A minimum cash balance of $6,000 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?

Accepted Answer

A) $8,000 
B) $6,400 
C) $5,600 
D) $6,000 
E) $6,600 
A) $8,000 
B) $6,400 
C) $5,600 
D) $6,000 
E) $6,600

Question 7

When applied to budgets,responsibility accounting provides feedback to top management about the performance of different responsibility-centre managers relative to the budget.Name and briefly describe the three ways,presented in the textbook,that properly used variances can be helpful.

Accepted Answer

1.Early Warning.Variances alert managers

Question 8

Jermaine Company is developing its budgets for 2016 and for the first time will use the Kaizen approach.The initial 2016 income statement,based on static data from 2015,is as follows:
   
Selling prices for 2016 are expected to increase by 8 percent,and sales volume in units will decrease by 10 percent.The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit.Other than amortization,all other operating costs are expected to decline by 5 percent.
Required:
Prepare a Kaizen-based budgeted income statement for 2016.

Accepted Answer

The answer of Jermaine Company is developing its budgets for...

Question 9

Shamokin Manufacturing produces two products,Big and Bigger.Shamokin expects to sell 20,000 units of Big and 10,000 units of Bigger.Shamokin plans on having an ending inventory of 4,000 units of Big and 2,000 units of Bigger.Currently,Shamokin has 1,000 units of Big in its inventory and 800 units of Bigger.Each product requires two labour operations: molding and polishing.Product Big requires one hour of molding time and one hour of polishing time.Product Bigger requires one hour of molding time and two hours of polishing time.The direct labour rate for molders is $20 per molding hour,and the direct labour rate for polishers is $25 per polishing hour.
Required:
Prepare a direct labour budget in hours and dollars for each product.

Accepted Answer

Desired Pr

Question 10

Allscott Company is developing its budgets for 2016 and for the first time will use the Kaizen approach.The initial 2016 income statement,based on static data from 2015,is as follows:
   
Selling prices for 2016 are expected to increase by 8%,and sales volume in units will decrease by 10%.The cost of goods sold as estimated by the Kaizen approach will decline by 10% per unit.Other than depreciation,all other operating costs are expected to decline by 5%.
Required:
Prepare a Kaizen-based budgeted income statement for 2016.

Accepted Answer

The answer of Allscott Company is developing its budgets for...

Question 11

The financial budget is that part of the master budget that comprises

Accepted Answer

A) the capital budget and the cash budget. 
B) the capital budget and the budgeted balance sheet. 
C) the cash budget,operating budget and budgeted balance sheet. 
D) the cash budget,the budgeted statement of cash flows,and the retained earnings budget. 
E) the capital budget,the cash budget,budgeted balance sheet,and the budgeted statement of cash flows. 
A) the capital budget and the cash budget. 
B) the capital budget and the budgeted balance sheet. 
C) the cash budget,operating budget and budgeted balance sheet. 
D) the cash budget,the budgeted statement of cash flows,and the retained earnings budget. 
E) the capital budget,the cash budget,budgeted balance sheet,and the budgeted statement of cash flows.

Question 12

Use the information below to answer the following question(s).
Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2015.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 2015?

Accepted Answer

A) 24,000 boxes 
B) 20,000 boxes 
C) 19,500 boxes 
D) 20,500 boxes 
E) 22,500 boxes 
A) 24,000 boxes 
B) 20,000 boxes 
C) 19,500 boxes 
D) 20,500 boxes 
E) 22,500 boxes

Question 13

The production budget of a manufacturing company is prepared after the revenue budget.

Accepted Answer

A) True 
 B)False

Question 14

Use the information below to answer the following question(s).
Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2016.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
-What will be Country Heather's cost of goods sold?

Accepted Answer

A) $122,400 
B) $136,000 
C) $139,400 
D) $149,600 
E) $101,500 
A) $122,400 
B) $136,000 
C) $139,400 
D) $149,600 
E) $101,500

Question 15

Use the information below to answer the following question(s).
Marguerite Inc..expects to sell 20,000 pool cues for $20.00 each.Direct materials costs are $2.00,direct manufacturing labour is $12.00,and manufacturing overhead is $0.80 per pool cue.Each pool cue 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 pool cue 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 2016:
  
-What are the 2016 budgeted costs for direct manufacturing labour?

Accepted Answer

A) $248,000 
B) $247,200 
C) $249,000 
D) $246,600 
E) $246,000 
A) $248,000 
B) $247,200 
C) $249,000 
D) $246,600 
E) $246,000

Question 16

Use the information below to answer the following question(s).
Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2016.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
-What will be Country Heather's budgeted revenue?

Accepted Answer

A) $216,000 
B) $240,000 
C) $312,000 
D) $318,000 
E) $300,500 
A) $216,000 
B) $240,000 
C) $312,000 
D) $318,000 
E) $300,500

Question 17

Disk Company was very profitable for the first ten years of its existence,but the company has fallen on hard times with the growth of compact disks.In 2007 Jean Adams was appointed head of the Product Research Department.She began a number of product development projects.Although the department has developed several good ideas that led to the introduction of several promising products,Ms.Adams was criticized for poor cost control.The financial performance reports of the department under Ms.Adams leadership were consistently unfavourable.Management was quite concerned about cost control because profits for the company were low and the cash budget indicated that additional borrowing would be required during the next year.
Because of her inability to control costs,Ms.Adams was relieved of her responsibilities in 2008 and Fran Jones became head of the department.Ms.Jones promised to improve performance of Product Research and scaled back the developmental activities to obtain favourable financial performance.By the end of 2008 Ms.Jones was showing a favourable financial variance.
Required:
If the Product Research Department is classified as a responsibility centre,what unique problems are associated with evaluating its financial performance?

Accepted Answer

Because there does not appear to be any

Question 18

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:
  
-How many kilograms of material will need to be purchased for 2015 production and inventory requirements?

Accepted Answer

A) 3,100 kg 
B) 2,900 kg 
C) 2,750 kg 
D) 3,150 kg 
E) 2,950 kg 
A) 3,100 kg 
B) 2,900 kg 
C) 2,750 kg 
D) 3,150 kg 
E) 2,950 kg

Question 19

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:
  
-How many ceramic vases need to be produced in 2015?

Accepted Answer

A) 5,900 vases 
B) 6,100 vases 
C) 7,000 vases 
D) 6,000 vases 
E) 6,300 vases 
A) 5,900 vases 
B) 6,100 vases 
C) 7,000 vases 
D) 6,000 vases 
E) 6,300 vases

Question 20

Answer the following question(s)using the information below.
Sherry and John Enterprises are using the Kaizen approach to budgeting for 2016.The budgeted income statement for January 2016 is as follows:
   Under the Kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is budgeted gross margin for March 2016?

Accepted Answer

A) $392,040 
B) $396,000 
C) $408,040 
D) $411,940 
E) $412,000 
A) $392,040 
B) $396,000 
C) $408,040 
D) $411,940 
E) $412,000

Describe the concept of kaizen budgeting.

Budgets can play both planning and control roles for management.

When applied to budgets,responsibility accounting provides feedback to top management about the performance of different responsibility-centre managers relative to the budget.Name and briefly describe the three ways,presented in the textbook,that properly used variances can be helpful.

The financial budget is that part of the master budget that comprises

The production budget of a manufacturing company is prepared after the revenue budget.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 6: Master Budget and Responsibility Accounting

Describe the concept of kaizen budgeting.

Budgets can play both planning and control roles for management.

When applied to budgets,responsibility accounting provides feedback to top management about the performance of different responsibility-centre managers relative to the budget.Name and briefly describe the three ways,presented in the textbook,that properly used variances can be helpful.

The financial budget is that part of the master budget that comprises

The production budget of a manufacturing company is prepared after the revenue budget.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters