Exam 9: Profit Planning and Budgeting

Alma Mater College The Admissions Department of Alma Mater College plans to hold several "open house" parties during the year.All the refreshment costs will be charged to the department.However,the party creates extra work for the Maintenance Department.The maintenance crew must work overtime and the maintenance supervisor is complaining about cost overruns in the Maintenance Department. Refer to the Alma Mater College.How can the accounting system be changed so that the concept of responsibility accounting is achieved?

Which of the following are not controlled by a manager of a profit center?

Sales volume variance analysis.Ralston Company prepared a budget last period with budgeted sales of 55,000 units at a price of $75 each.Variable costs were budgeted to be $10 per unit.Fixed costs were budgeted to be $2,000,000 for the period.During the period,actual sales totaled 58,000 units. Required: Prepare a variance report to show the difference between the master budget and the flexible budget. (Ralston Company;sales volume variance analysis. )

Each year,the Benezra Company begins its budgeting process in September.Managers are asked to provide sales forecasts by product line.The president of the company,wishing to provide an incentive to improve performance,always increases the forecast by 40 percent.Discuss the impact of the president's actions on the sales force as well as the production personnel.

Who are responsible for (1)costs in cost centers, (2)revenues in revenue centers, (3)both costs and revenues in profit centers,and (4)revenues,costs,and assets in an investment center?

Julia Electronics LLC is preparing a flexible budget for the coming year and the following maximum capacity estimates for the furniture division are available Assume that Julia Electronics LLC 's normal capacity is 80% of maximum capacity.What would be the total factory overhead rate,based on direct labor hours,in a flexible budget at normal capacity?

Planning capital expenditures involves which of the following?

What is the final component of a comprehensive master budget?

Solving for budgeted manufacturing costs.Calvin Company expects to sell 10 million cases of paper towels during the current year.Budgeted costs per case are $24 for direct materials,$18 for direct labor,and $6 (all variable)for manufacturing overhead.Calvin began the period with 80,000 cases of finished goods on hand and wants to end the period with 20,000 cases of finished goods on hand. Required: Compute the budgeted manufacturing costs of the Calvin Company for the current period.Assume no beginning or ending inventory of work-in-process. (Calvin Company;solving for budgeted manufacturing costs. )

Able Company Able Company expects to begin the coming year with 12,000 units of product X in the inventory of finished goods.It expects to sell 130,000 units of the product and end the year with 15,800 units in finished goods inventory.Five pounds of material A go into each unit of product X.The company expects to have 2,000 pounds of material A on hand at the beginning of the coming year and wished to end the year with 3,400 pounds in inventory. Refer to Able Company.Calculate the number of units of product X that the company must manufacture in carrying out these plans.

Baxter Corporation's master budget calls for the production of 5,000 units of product monthly.The master budget includes indirect labor of $144,000 annually;Baxter considers indirect labor to be a variable cost.During the month of April,4,500 units of product were produced,and indirect labor costs of $10,100 were incurred.What would be the budget variance for indirect labor utilizing flexible budgeting?

In determining the Production Budget,what is the formula for computing the quantity of each product to be produced?

Who often encounter ethical dilemmas in the budgeting process because they are involved in the creation of the budget,and their performances are subsequently evaluated by comparing the budget to actual results?

Charles Company had 14,000 units of switch plates on hand at the end of its previous year.The company has a policy of maintaining 10 percent of the current year's requirements in ending inventory.During the current year,Charles used 150,000 units of switch plates.How many units did Charles purchase during the current year?

Which of the following departments would not be classified as a profit center?

Observers of Japanese industry report that Japanese managers and owners have created team orientation or esprit de corps with considerable

Which cost can be cut for a period of time because their reduction presents no serious short-term threats to production and marketing?

If direct labor cost is variable,then it is considered to be which type of cost in the cost hierarchy?

What is the primary difference between a fixed budget and a flexible budget?

Which of the following statements is true concerning the operating budget?