Exam 8: Budgeting for Planning and Control Key

Compare and contrast static budgets, flexible budgets, and activity-based budgets.

The production budget describes how many units must be produced in order to meet sales and inventory needs.

The budget most appropriate for control purposes is the

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 machining in an activity-based performance report?

The following forecasted sales pertain to Rapid City: Rapid City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales. How many units are expected to be produced in June?

Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2014 are: Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2014 sales is projected at 4,500 boxes. What is the expected sales revenue for March?

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was $4,150 and the budgeted cost per unit is $10?

The budgeting that recognizes interdependencies among departments is called __________ budgeting. or

Define budgeting and control. How are budgets used in planning? How are budgets used to control? What are some of the reasons for budgeting?

Refer to Figure 8-3. How many units of steel are expected in the material inventory at the end of the second month?

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. How many mattresses would be produced in the year 2015?

Which of the following is NOT a component of the Cash Budget?

Goal congruence means

Natasha Company has a sales budget for next month of $150,000. Cost of goods sold is expected to be 40 percent of sales. All goods are purchased in the month used and paid for in the month following purchase. The beginning inventory of merchandise is $5,000, and an ending inventory of $6,000 is desired. Beginning accounts payable is $38,000. For Natasha Company, the ending accounts payable should be

The __________ income statement is the culmination of the operating budget.

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. The planned ending inventory of finished goods for August is

The body that has the responsibility to review the budget, provide policy guidelines and budgetary goals, resolve differences that may arise as the budget is prepared, approve the final budget, and monitor the actual performance of the organization as the year unfolds is called the:

Operating budgets are

Activity-based budgets also focus on __________ processes.

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). What is the cash balance at the end of July, assuming that cash is received only from customers and that $40,000 is paid out during July?