Exam 6: Master Budget and Responsibility Accounting

One of the criticisms of traditional budgeting is not using budgets to evaluate performance until the end of the budget period.Which of the following proposals for change would address this criticism?

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: -On the 2016 budgeted income statement,what amount will be reported for gross margin?

The budgeting process generally concludes with the preparation of the

Duffy Corporation has prepared the following sales budget: Collections are 40% in the month of sale,45% in the month following the sale,and 10% two months following the sale.The remaining 5% is expected to be uncollectible. Required: Prepare a schedule of cash collections for July through September.

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: -On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

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 manufactured in 2016?

Use the information below to answer the following question(s). Grinnell Manufacturing Company has the following information for 2015: Budget Expenses per Month Note: All cash expenses are paid as incurred;Collections from sales are 50% in the month of sale and 50% in the month following the sale;December 2014 sales were $110,000. -What is the budgeted net operating income for the first quarter of 2015?

Discuss the importance of the sales forecast and items that influence its accuracy.

Berry Company has gathered the following information: Berry desires to keep a minimum cash balance of $15,000. Required: Prepare a cash budget for May,and indicate whether or not Berry meets minimum cash requirements.

Answer the following question(s)using the information below. Fiscal Company has the following sales budget for the last six months of 2013: Historically,the cash collection of sales has been as follows: 65% of sales collected in the month of sale, 25% of sales collected in the month following the sale, 8% of sales collected in the second month following the sale,and 2% of sales are uncollectible. -What is the ending balance of accounts receivable for September,assuming uncollectible balances are written off during the second month following the sale?

Use the information below to answer the following question(s). Grinnell Manufacturing Company has the following information for 2015: Budget Expenses per Month Note: All cash expenses are paid as incurred;Collections from sales are 50% in the month of sale and 50% in the month following the sale;December 2014 sales were $110,000. -What is the expected total cash disbursements for expenses in February?

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: -Shamokin Manufacturing produces two products,Big and Bigger.Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period.Currently,Shamokin has 800 units of Bigger on hand.Bigger requires two labour operations,molding and polishing.Each unit of Bigger requires one hour of molding and two hours of polishing.The direct labour rate for molding is $20 per molding hour and the direct labour rate for polishing is $25 per polishing hour.The expected number of hours of direct labour for Bigger is

Accrual accounting in compliance with ASPE/IFRS results in these timing differences between when a benefit or obligation must be reported for financial accounting purposes and when the cash inflow or outflow actually occurs.

The improvements gained through Kaizen budgeting arise from large changes made during the budget period as a result of executive leadership.

The cash cycle describes the movement of cash from producing inventories to receivables from sales and back to cash from collections.

Mannock Company budgeted $400,000 for employee training,but actually spent only $300,000.Which of the following statements is the best course of action for management to take in this instance?

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. -How many chests should be budgeted to be produced in the first quarter of 2016?

The major types of responsibility centres are

A controllable cost is a cost that is not subject to the influence of a given manager of a given responsibility centre for a given time span.

Winnie and Pooh have just purchased a small honey manufacturing company that was having financial difficulties.After a brief operating period,they decided that the company's main problem was lack of any financial planning.The company made a good product and market potential was great. Required: Explain why a company needs a good budgeting plan.Specifically address the need for a master budget.