Exam 8: Budgeting for Planning and Control Key

Which of the following factors is NOT an advantage of preparing operating budgets?

When budgets are used to evaluate performance, which factor might NOT have a significant behavioral effect?

Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Laramie had the following budgeted data: What are the budgeted costs for materials if 5,000 units were produced?

Moriah Manufacturing Company expects to incur the following per unit costs for 1,000 units of production: What is the total amount of direct labor included in the direct labor budget?

The cash excess or deficiency section of the cash budget compares expected available cash to the expected cash needed.

Figure 8-1 Armando Company produces and sells mattresses. It expects to sell 10,000 mattresses in the year 2015 and had 1,000 mattresses in finished goods inventory at the end of 2014. Armando would like to complete operations in the year 2015 with at least 1,250 completed mattresses in inventory. There is no ending work-in-process inventory. The mattresses sell for $300 each. Refer to Figure 8-1. What would be the total sales for the year 2015?

If the static budget variance for materials is $250 F and the budgeted cost for materials is $52,000, then the actual cost of materials is

Which of the following is a financial budget?

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders What is the budget variance for maintenance in an activity-based performance report?

Participative budgeting detracts from a manager's sense of responsibility and creativity.

An example of a negative incentive is

Splendor, Inc., has done a cost analysis for its production of motorcycle lights. The following activities and cost drivers have been developed:

The type of budget that is a moving twelve-month budget is called the:

Figure 8-4 Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000. Refer to Figure 8-4. The expected cash collections of Discus Productions for June are

Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed: Following are the actual costs of producing 75,000 vests: 5,000 machine hours; 10 batches; 20 purchase orders What is the budget variance for inspection in an activity-based performance report?

The budgets that are concerned with the inflows and outflows of cash and with financial position are called the:

Figure 8-2 Asian Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months of 2014 are as follows: Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Asian Lamp expects to sell the lamps for $25 each. January 2014 sales is projected at 16,000 lamps. Refer to Figure 8-2. In going from the sales budget to the production budget, adjustments to the sales budget need to be made for

A budget that is developed around one particular level of activity is

A budget is a financial plan for the future used for planning, controlling, and decision making.

Figure 8-7 Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below: The June 30th balance sheet follows: Actual sales for June and budgeted sales for July, August, and September are given below: Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000. Refer to Figure 8-7. What is the balance of the accounts receivable at the end of July?