Answer the following questions using the information below: Sherry and John Enterprises are using the kaizen approach to budgeting for 2015. The budgeted income statement for January 2015 is as follows: \[\begin{array} { l r } \text { Sales ( } 168,000 \text { units) } & \$ 1,000,000 \\ \text { Less: Cost of goods sold } & 600,000 \\ \text { Gross margin } & 400,000 \\ \text { Operating expenses } & 300,000 \\ \text { (includes } \$ 50,000 \text { of fixed costs) } & \\ \text { Operating income } & \$ 100,000 \\ \hline \end{array}\] Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. -What is the budgeted operating income for February 2015?

A) $206,000 B) $297,500 C) $116,915 D) $594,000 A) $206,000 B) $297,500 C) $116,915 D) $594,000

Answer the following questions using the information below: Wallace Company provides the following data for next year: \[\begin{array} { l c } \text { Month } & \text { Budgeted Sales } \\ \text { January } & \$ 120,000 \\ \text { February } & 108,000 \\ \text { March } & 132,000 \\ \text { April } & 144,000 \end{array}\] The gross profit rate is 35% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 20% of next month's sales, stated at cost. -What is the amount of purchases budgeted for January?

A) $63,960 B) $70,440 C) $78,000 D) $92,040 A) $63,960 B) $70,440 C) $78,000 D) $92,040

Answer the following questions using the information below: Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016: \[\begin{array} { l r r } & \text { Beginning inventory } & \text { Ending inventory } \\ \text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \\ \text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \\ \text { Finished goods inventory } & 400 \text { units } & 500 \text { units } \end{array}\] -On the 2016 budgeted income statement,what amount will be reported for sales?

A) $122,000 B) $118,000 C) $140,000 D) $120,000 A) $122,000 B) $118,000 C) $140,000 D) $120,000

Answer the following questions using the information below: Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016: \[\begin{array} { l r r } & \text { Beginning inventory } & \text { Ending inventory } \\ \text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \\ \text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \\ \text { Finished goods inventory } & 400 \text { units } & 500 \text { units } \end{array}\] -What are the 2016 budgeted production costs for direct materials,direct manufacturing labor,and manufacturing overhead,respectively?

A) $12,200; $61,000; $18,300 B) $12,000; $60,000; $18,000 C) $2,000; $10,000; $3,000 D) $2,000; $0; $4,500 A) $12,200; $61,000; $18,300 B) $12,000; $60,000; $18,000 C) $2,000; $10,000; $3,000 D) $2,000; $0; $4,500

Exam 6: Master Budget and Responsibility Accounting

Answer the following questions using the information below: Sherry and John Enterprises are using the kaizen approach to budgeting for 2015. The budgeted income statement for January 2015 is as follows: Sales ( 168,000 units) \ 1,000,000 Less: Cost of goods sold 600,000 Gross margin 400,000 Operating expenses 300,000 (includes \ 50,000 of fixed costs) Operating income \ 100,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. -What is the budgeted operating income for February 2015?

(Multiple Choice)

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Question 101

Budgets should ________.

(Multiple Choice)

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Question 102

A budget generally includes both financial and nonfinancial aspects of the plan.

(True/False)

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Question 103

The order to follow when preparing the operating budget is ________.

(Multiple Choice)

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Question 104

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________.

(Multiple Choice)

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Question 105

Answer the following questions using the information below: Finmin Company has the following sales budget for the last six months of 2015: July \ 200,000 October \ 180,000 August 160,000 November 200,000 September 200,000 December 180,000 Sales are immediately due, however the cash collection of sales, historically, 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 the end of September,assuming uncollectible balances are written off at the end of the second month following the sale?

(Multiple Choice)

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Question 106

Answer the following questions using the information below: The following information pertains to Hepburn Company: Month Sales Purchases January \ 60,000 \ 32,000 February \ 80,000 \ 40,000 March \ 100,000 \ 56,000 - Cash is collected from customers in the following manner: Month of sale $\quad 30 \%$ 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. - Labor 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 paid to suppliers in March?

(Multiple Choice)

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Question 107

Kaizen budgeting involves ________.

(Multiple Choice)

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Question 108

Rolling budgets help management to ________.

(Multiple Choice)

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Question 109

Answer the following questions using the information below: Wallace Company provides the following data for next year: Month Budgeted Sales January \ 120,000 February 108,000 March 132,000 April 144,000 The gross profit rate is 35% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 20% of next month's sales, stated at cost. -What is the amount of purchases budgeted for January?

(Multiple Choice)

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Question 110

Which of the following is required to arrive at the budgeted units to be produced in a year?

(Multiple Choice)

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Question 111

After a budget is agreed upon and finalized by the management team,the amounts should NOT be changed for any reason.

(True/False)

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Question 112

In a multinational company,budgeting is primarily done to evaluate the firm's performance relative to its budgets.

(True/False)

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Question 113

Kaizen budgeting is driven by ________.

(Multiple Choice)

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Question 114

Antique Brass Company has budgeted sales volume of 120,000 units and budgeted production of 108,000 units,while 20,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

(Multiple Choice)

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Question 115

Sensitivity analysis is a useful tool that helps managers evaluate risks.

(True/False)

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Question 116

Kaizen budgeting can be applied to activities such as setups with the goal of reducing setup time and setup costs.

(True/False)

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Question 117

Answer the following questions using the information below: Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016: Beginning inventory Ending inventory Direct materials 1,000 units 1,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 400 units 500 units -On the 2016 budgeted income statement,what amount will be reported for sales?

(Multiple Choice)

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(78)

Question 118

Answer the following questions using the information below: Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016: Beginning inventory Ending inventory Direct materials 1,000 units 1,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 400 units 500 units -What are the 2016 budgeted production costs for direct materials,direct manufacturing labor,and manufacturing overhead,respectively?

(Multiple Choice)

4.9/5

(77)

Question 119

Responsibility accounting focuses on control,NOT on information and knowledge.

(True/False)

5.0/5

(80)

Question 120

Budgets should ________.

A budget generally includes both financial and nonfinancial aspects of the plan.

The order to follow when preparing the operating budget is ________.

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________.

Kaizen budgeting involves ________.

Rolling budgets help management to ________.

Which of the following is required to arrive at the budgeted units to be produced in a year?

After a budget is agreed upon and finalized by the management team,the amounts should NOT be changed for any reason.

In a multinational company,budgeting is primarily done to evaluate the firm's performance relative to its budgets.

Kaizen budgeting is driven by ________.

Antique Brass Company has budgeted sales volume of 120,000 units and budgeted production of 108,000 units,while 20,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

Sensitivity analysis is a useful tool that helps managers evaluate risks.

Kaizen budgeting can be applied to activities such as setups with the goal of reducing setup time and setup costs.

Responsibility accounting focuses on control,NOT on information and knowledge.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

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