Exam 13: Budgeting and Standard Cost Systems

Production and sales estimates for June are as follows: 18,500 Estimated inventory (units), June 1 19,000 Desired inventory (unit), June 30 Expected sales volume (units): 3,000 Area X 4,000 AreaY 5,500 Area Z \ 20 Unit sales price The number of units expected to be manufactured in June is:

Below is budgeted production and sales information for Cooper Cans, Inc. for the month of March: Tin Aluminum 4,000 units 10,000 units Estimated beginning inventory 3,000 units 14,000 units Desired ending inventory 80,000 units 360,000 units Region I, anticipated sales 20,000 units 120,000 units Region II, anticipated sales The unit selling price for aluminum cans is $0.10 and for tin cans is $0.15. Refer to the information provided for Cooper Cans Inc. Budgeted sales for the month are:

The first budget to be prepared is usually the production budget.

The following data relate to direct labor costs for the current period: 9,000 hours at \ 5.50 Standard costs 8.750 hours at \ 5.25 Actual costs What is the direct labor rate variance?

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual was 600 hours at $17, the rate variance was $1,200 favorable.

The first budget customarily prepared as part of an entity's master budget is the:

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called continuous budgeting.

For which of the following reasons, management accountants usually provide for a minimum cash balance in their cash budgets?

The formula to compute direct materials price variance is:

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. Refer to the information provided for Benjamin Corporation. The cash collections from accounts receivable in October are:

The following data is given for the Walker Company: 1,000 units Budgeted prochuction 980 units Actual production \2 .00 Stendard price per Ib 12 Standard pounds per completed unit 11,800 Actual pounds purchased and used in production \2 3,000 Actual price paid for materials Labor: \ 14 per hour Standard hourly labor rate 4.5 Standard hours allowed per completed unit 4,560 Actual labor hours worked \ 62.928 Actual total labor costs Overhead: \ 27,000 Actual and budgeted fixed overhead \ 3.50 per standard direct labor hour Standard variable overhe ad rate \ 15.500 Actual variable overhead costs Overhead is applied on standard labor hours. The variable factory overhead controllable variance is:

A formal written statement of management's plans for the future, expressed in financial terms, is called a budget.

Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended: 33.00 Actual price per kilogram 11,000 Actual kilograms of material used \ 18.20 Actual hourly labor rate 4,900 labor hours Actual hours of prochuction \ 2.80 Standard price per kilogram 6 kilograms Standard kilograms per completed urit \ 18.00 Standard hourly labor rate 1 hr. Standard time per completed urit \ 34,900 Actual total factory overhead \ 18,000 Actual Fixed factory overhead \ 1.20 per labor hour Standard fixed factory overhead rate \ 3.80 per labor hour Standard variable factory overhead rate 15,000 hours Maximum plant capacity 5,000 Units completed chringthe period The direct labor cost variance is:

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the:

Based on the following production and sales data of Jackson Co. for March of the current year, prepare (a) a sales budget and (b) a production budget. 18,000 units 26,000 units Estimated inventory, March 1 15,000 units 32,000 units Desired inventory, March 31 Expected sales volume: 260,000 units 320,000 units Area I 130,000 units 190,000 units Area II \ 12 \ 4 Unit sales price

Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended: \ 2.50 Actual price per kilogram 31,000 Actual lilograms of material used \ 18.10 Actual hourly labor rate 4.900 lahor hrs Actual hmurs of morhuction \ 2.80 Standard price per kilogram 6 kilograms Standard kilograms per completed urit \ 18.00 Standard hourly labor rate 1 hr. Standard time per completed urit \ 34,900 Actual total factory overhead \ 18,000 Actual fixed factory overhead \ 1.20 per labor hour Standard fixed factory overhead rate \ 3.80 per labor hour Standard variable factory overhead rat 15,000 hours Maximum plant capacity 5,000 Units completed churing the period Refer to the information provided for Frogue Company. The variable factory overhead controllable variance is:

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: StandardCosts 7,500 hours \ 12 Directlabor Actual Costs 7,400 hours \ 11.40 Direct labor The amount of the direct labor rate variance is:

Below is budgeted production and sales information for Cooper Cans, Inc. for the month of March: Tin Aluminum 4,000 units 10,000 units Estimated beginning inventory 3,000 units 14,000 units Desired ending inventory 80,000 units 360,000 units Region I, anticipated sales 20,000 units 120,000 units Region II, anticipated sales The unit selling price for aluminum cans is $0.10 and for tin cans is $0.15. Refer to the information provided for Cooper Cans Inc. Budgeted production for tin cans during the month is: