Exam 13: Budgeting and Standard Cost Systems

The treasurer of Unisyms Company has accumulated the following budget information for the first two months of the coming year: The company expects to sell about 35% of its merchandise for cash.Of sales on account,80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale.One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other three-fourths in the following month.Depreciation,insurance,and property taxes represent $6,400 of the probable monthly selling and administrative expenses.Insurance is paid in February,and a $40,000 installment on income taxes is expected to be paid in April.Of the remainder of the selling and administrative expenses,one-half are expected to be paid in the month in which they are incurred,with the balance paid in the following month.Capital additions of $250,000 are expected to be paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000.Current liabilities as of March 1 are composed of accounts payable of $121,500 ($102,000 for materials purchases and $19,500 for operating expenses).Management desires to maintain a minimum cash balance of $20,000. Prepare a monthly cash budget for March and April.

Standard costs serve as a device for measuring efficiency.

Based on the following production and sales estimates for May,determine the number of units expected to be manufactured in May.

The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows: Variable cost @ $2 per hour Total variable cost,$18,000 Fixed cost @ $0.80 per hour Total fixed cost,$8,000 -The amount of the direct materials quantity variance is

Estimated cash payments are planned reductions in cash from all of the following EXCEPT

Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget.

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

Standards are more widely used for nonmanufacturing expenses than for manufacturing costs.

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead)based on 100% capacity of 80,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: What is the amount of the variable factory overhead controllable variance?

The unfavorable volume variance may be due to all of the following factors EXCEPT

If the actual direct labor hours spent producing a commodity differ from the standard hours,the variance is termed

Production and sales estimates for June are as follows: The budgeted total sales for June is

An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work.

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a

If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual was 1,600 units at $13,the direct materials quantity variance was $4,800 favorable.

Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended: -The total factory overhead cost variance is

Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended: -The variable factory overhead controllable variance is

Currently attainable standards do NOT allow for reasonable production difficulties.

Changes in technology,machinery,or production methods may make past cost data irrelevant when setting standards.

Production and sales estimates for May for the Hudson Co.are as follows: The number of units expected to be sold in May is