Exam 8: Budgeting for Planning and Control Key

Figure 8-8 Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Rammazzotti Inc., had the following budgeted data: The following actually occurred: Refer to Figure 8-8. The total flexible budgeted costs for 2014 are

Dali, Inc. is constructing its marketing budget. Commissions are $3 per unit sold. Salesperson salaries are $100,000 per quarter. Depreciation is $25,000 per quarter. Travel is $10,000 per quarter. Advertising is $50,000 in the first quarter; $40,000 in the second quarter; $60,000 in the third quarter; and $55,000 in the fourth quarter. What is the budgeted marketing expense for the third quarter?

Shiller Corporation has the following sales forecasts for the selected three-month period in 2014: All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month. Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges). How much cash would be collected in September from sales?

Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months. Based on this information, the number of units of A1 that needs to be purchased by Alana during the first month is

Which of the following is the most common starting point in the information gathering process for budgeting?

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: What is the budgeted purchasing cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

The following forecasted sales pertain to Shankar Company: The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 30 percent of the next month's sales. What is the budgeted beginning balance in units for finished goods inventory on July 1?

Alpha Beta Company has a sales budget for next month of $50,000. Cost of goods sold is expected to be 60 percent of sales. All goods are purchased in the month used and paid for in the month following their purchase. The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired. Beginning accounts payable is $13,000. The cost of goods sold for next month is expected to be

Collibri, Inc., has done a cost analysis for its production of banners. The following activities and cost drivers have been developed: Following are the actual costs of producing 75,000 banners: 1,000 machine hours; 15 batches; 10 purchase orders Required: Prepare an activity-based performance report.

Colorado Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced. The beginning finished inventory is valued at $31,320. After preparing a finished goods inventory budget for August, what is the cost of goods sold for August?

Refer to Figure 8-7. What are the total assets at the end of July?

Myopic behavior occurs when

The master budget is composed of the operations budget and the future budget.

Figure 8-6 The records of Morgantown, Inc.show the following forecasted sales: Collection pattern: 60 percent in month of sale 40 percent in month following the sale The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month's sales. Refer to Figure 8-6. How many dollars are expected to be collected in October?

Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed: Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders The following variances were given in the activity performance report: What is the activity variance for design?

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 purchasing in an activity-based performance report?

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 inventory account at the end of July?

The capital expenditures budget is a long-term financial plan.

Which of the following is NOT a key feature of an ideal budgetary system?

The following is responsible for directing and coordinating the overall budgeting process: