Question 1

A rolling budget is a budget or plan that

Accepted Answer

A) rolls several budgets together for forecasting purposes. 
B) has one budget category roll into the next category. 
C) rolls all budget categories together into a master budget. 
D) is always available for a specified future period by replacing time periods as the lapse. 
E) is not used to guide operations. 
A) rolls several budgets together for forecasting purposes. 
B) has one budget category roll into the next category. 
C) rolls all budget categories together into a master budget. 
D) is always available for a specified future period by replacing time periods as the lapse. 
E) is not used to guide operations.

Question 2

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.

Accepted Answer

The answer of Budget Corporation has the following budgeted sales...

Question 3

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.
-The cash budget is a schedule of expected cash receipts and disbursements that

Accepted Answer

A) requires an aging of accounts receivable and accounts payable. 
B) is a self-liquidating cycle. 
C) is prepared immediately after the sales forecast. 
D) predicts the effect on the cash position at given levels of operations. 
E) is prepared by the organization's bank. 
A) requires an aging of accounts receivable and accounts payable. 
B) is a self-liquidating cycle. 
C) is prepared immediately after the sales forecast. 
D) predicts the effect on the cash position at given levels of operations. 
E) is prepared by the organization's bank.

Question 4

Use the information below to answer the following question(s).
Samson Inc.expects to sell 10,000 barbells for $18.00 each.Direct materials costs are $5.00,direct manufacturing labour is $6.00,and manufacturing overhead is $2.50 per barbell.Each barbell requires 6 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 barbell requires one-quarter hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.Marketing costs are $2.00 per barbell.The following inventory levels are expected to apply to 2016:
  
-How many barbells need to be produced in 2016?

Accepted Answer

A) 11,050 
B) 9,850 
C) 10,000 
D) 10,050 
E) 9,950 
A) 11,050 
B) 9,850 
C) 10,000 
D) 10,050 
E) 9,950

Question 5

Use the information below to answer the following question(s).
Samson Inc.expects to sell 10,000 barbells for $18.00 each.Direct materials costs are $5.00,direct manufacturing labour is $6.00,and manufacturing overhead is $2.50 per barbell.Each barbell requires 6 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 barbell requires one-quarter hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.Marketing costs are $2.00 per barbell.The following inventory levels are expected to apply to 2016:
  
-What are the 2016 budgeted costs for direct manufacturing labour?

Accepted Answer

A) $59,700 
B) $60,300 
C) $60,700 
D) $240,000 
E) $60,000 
A) $59,700 
B) $60,300 
C) $60,700 
D) $240,000 
E) $60,000

Question 6

The reason for tracing a cost in responsibility accounting is to determine which of the following?

Accepted Answer

A) whether it is fixed or variable 
B) who has the best knowledge about why the costs arose 
C) what activity caused the costs to be incurred 
D) either who has the best knowledge about why the costs arose or,what activity caused the costs to be incurred 
E) whether it is production or administration 
A) whether it is fixed or variable 
B) who has the best knowledge about why the costs arose 
C) what activity caused the costs to be incurred 
D) either who has the best knowledge about why the costs arose or,what activity caused the costs to be incurred 
E) whether it is production or administration

Question 7

Few costs are clearly under the sole influence of one manager.

Accepted Answer

A) True 
 B)False

Question 8

Variances sometimes signal to managers that their strategies are ineffective.

Accepted Answer

A) True 
 B)False

Question 9

Frame Antique manufactures picture frames.Sales for May are expected to be 20,000 units of various sizes.Historically,the average frame requires three metres of framing,one square metre of glass,and two square metres of backing.Beginning inventory includes 3,000 metres of framing,1,000 square metres of glass,and 1,000 square metres of backing.Current prices are $0.20 per metre of framing,$4.00 per square metre of glass,and $1.50 per square metre of backing.Ending inventory should be 150 percent 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 May.
b.Determine the total costs of direct materials for May purchases.

Accepted Answer

a.
 @#IMG-DLM& 
b.Co

Question 10

A production budget expressed in units is equal to

Accepted Answer

A) budgeted sales plus beginning finished goods inventory plus targeted ending finished goods inventory. 
B) budgeted sales less beginning finished goods inventory less targeted ending finished goods inventory. 
C) budgeted sales less beginning finished goods inventory plus targeted ending finished goods inventory. 
D) budgeted sales plus beginning finished goods inventory less targeted ending finished goods inventory. 
E) last year's sales plus beginning finished goods inventory plus targeted ending finished goods inventory. 
A) budgeted sales plus beginning finished goods inventory plus targeted ending finished goods inventory. 
B) budgeted sales less beginning finished goods inventory less targeted ending finished goods inventory. 
C) budgeted sales less beginning finished goods inventory plus targeted ending finished goods inventory. 
D) budgeted sales plus beginning finished goods inventory less targeted ending finished goods inventory. 
E) last year's sales plus beginning finished goods inventory plus targeted ending finished goods inventory.

Question 11

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.
-What is the ending cash balance for March after borrowing,if required?

Accepted Answer

A) $4,000 
B) $3,800 
C) $3,200 
D) $2,800 
E) $3,000 
A) $4,000 
B) $3,800 
C) $3,200 
D) $2,800 
E) $3,000

Question 12

Use the information below to answer the following question(s).
Fair Score Company manufactures scoreboards for athletic events.It expects to sell 20,000 scoreboards in 2015.The company has enough beginning inventory of direct materials to produce 8,000 units.Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead.Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units.The scoreboards sell for $800.There is no ending work-in-process inventory.Direct materials costs for each scoreboard total $200 while direct labour is $80.Manufacturing overhead is $60 per scoreboard.
-What will be Fair Score Company's budgeted total sales for 2015?

Accepted Answer

A) $18,400,000 
B) $17,600,000 
C) $16,000,000 
D) $15,200,000 
E) $12,300,000 
A) $18,400,000 
B) $17,600,000 
C) $16,000,000 
D) $15,200,000 
E) $12,300,000

Question 13

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

Accepted Answer

A) $280,000. 
B) $336,000. 
C) $356,000. 
D) $360,000. 
E) $240,000. 
A) $280,000. 
B) $336,000. 
C) $356,000. 
D) $360,000. 
E) $240,000.

Question 14

Use the information below to answer the following question(s).
Contempo Futon manufactures futons.The estimated number of sales for the last quarter of 2015 is as follows:
   Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales.January and February 2015 sales are anticipated to be 15,000 futons in each month.The cost to produce a futon is $125.
-What should be the number of futons Contempo Futon budgets to be produced in November?

Accepted Answer

A) 34,000 futons 
B) 32,500 futons 
C) 26,200 futons 
D) 25,000 futons 
E) 23,000 futons 
A) 34,000 futons 
B) 32,500 futons 
C) 26,200 futons 
D) 25,000 futons 
E) 23,000 futons

Question 15

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

Accepted Answer

The answer of Fashion Company has the following projected account...

Question 16

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 should budget cash used to pay accounts payable for the month totalling

Accepted Answer

A) $244,000. 
B) $240,000. 
C) $156,000. 
D) $152,000. 
E) $148,600. 
A) $244,000. 
B) $240,000. 
C) $156,000. 
D) $152,000. 
E) $148,600.

Question 17

The direct materials usage budget is based on

Accepted Answer

A) the units to be produced during a period. 
B) budgeted sales dollars. 
C) the predetermined factory overhead rate. 
D) the amount of labour hours worked. 
E) direct materials purchases. 
A) the units to be produced during a period. 
B) budgeted sales dollars. 
C) the predetermined factory overhead rate. 
D) the amount of labour hours worked. 
E) direct materials purchases.

Question 18

Lubriderm 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 June.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 pound of material costs $8.Inventory levels for materials are equal to 30 percent of the needs for the next month.Materials inventory on June 1 was 15,000 kilograms.
Required:
a.Prepare production budgets in units for July,August,and September.
b.Prepare a purchases budget in kilograms for July,August,and September,and give total purchases in both kilograms and dollars for each month.

Accepted Answer

The answer of Lubriderm Corporation has the following budgeted sales...

Question 19

Use the information below to answer the following question(s).
Konrade Inc.expects to sell 30,000 athletic uniforms for $80 each in 2016.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 2016:
  
-What is the amount budgeted for cost of goods sold in 2016?

Accepted Answer

A) $1,156,000 
B) $986,000 
C) $840,000 
D) $2,400,000 
E) $1,020,000 
A) $1,156,000 
B) $986,000 
C) $840,000 
D) $2,400,000 
E) $1,020,000

Question 20

Describe the four types of responsibility centres.Give a specific example of each of the four types of responsibility centres.

Accepted Answer

1.Cost centre: In a cost centre,managers

A rolling budget is a budget or plan that

The reason for tracing a cost in responsibility accounting is to determine which of the following?

Few costs are clearly under the sole influence of one manager.

Variances sometimes signal to managers that their strategies are ineffective.

A production budget expressed in units is equal to

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

The direct materials usage budget is based on

Describe the four types of responsibility centres.Give a specific example of each of the four types of responsibility centres.

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

A rolling budget is a budget or plan that

The reason for tracing a cost in responsibility accounting is to determine which of the following?

Few costs are clearly under the sole influence of one manager.

Variances sometimes signal to managers that their strategies are ineffective.

A production budget expressed in units is equal to

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

The direct materials usage budget is based on

Describe the four types of responsibility centres.Give a specific example of each of the four types of responsibility centres.

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