Exam 6: Master Budget and Responsibility Accounting

Kaizen budgeting is a budgetary approach that explicitly incorporates continuous improvement during the budget period into the resultant budget numbers.

The budget constraint describes only financial limitations that are within the company's control.

Management at all levels should understand and support the budget and all aspects of the management control system.

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

The revenue budget and the budgeted income statement are used to prepare the budgeted balance sheet and the budgeted statement of cash flows.

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. -How many flowerpots should Country Heather produce in 2016?

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. -Cash collections for September are

The master budget summarizes all the financial and nonfinancial plans into a single document.

The value of budgets to managers in their strategic analysis and planning is enhanced by

Gimble Corporation 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: Under the Kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 9%. Required: Prepare a Kaizen-based budgeted income statement for March of 2016.