Exam 8: Budgeting for Planning and Control

Figure 8-3 Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months. -Moriah Manufacturing Company expects to incur the following per unit costs for 1,000 units of production: Direct materials 3 lb. @ $5 = $15 Direct labor 1 hr @ $6 = $6 Variable overhead 75% of direct labor costs Fixed overhead 50% of direct labor costs What is the total amount of direct labor included in the direct labor budget?

The budget committee

Analysis that fosters management by exception is

The following forecasted sales pertain to Rapid City: Finished goods inventory as of May 31 6,000 units 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?

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:

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: Budgeted variable costs per unit: Budgeted fixed overhead for 2016: What is the difference in total budgeted costs between the volume range of 4,000 and 5,000 units?

Figure 8-2 Asian Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months of 2016 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 2016 sales is projected at 16,000 lamps. -Refer to Figure 8-2.What is the expected sales revenue for December?

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

The following forecasted sales pertain to Rapid City: Finished goods inventory as of May 31 6,000 units 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. What is the budgeted beginning balance in units for finished goods inventory on August 1?

The quantitative expressions of plans stated in either physical or financial terms are called __________ .

The ideal budget system creates

An example of a negative incentive is

In a merchandising organization, the merchandise purchases budget replaces what budget from a manufacturing firm?

Which of the following is NOT an advantage of participative budgeting?

Silver Faces, Inc., has done a cost analysis for its production of reflectors. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance $15,000 + $4 per machine hour Machining $35,000 + $1 per machine hour Inspection $60,000 + $750 per batch Setups $1,000 per batch Purchasing $50,000 + $10 per purchase order What is the budgeted inspection cost if there was production of 50,000 reflectors that will require 8,000 machine hours, 25 batches, and 15,000 purchase orders?

Bienestar, Inc., has done a cost analysis for its production of vests. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance $11,000 + $2 per machine hour Machining $55,000 + $3 per machine hour Inspection $70,000 + $500 per batch Setups $2,000 per batch Purchasing $80,000 + $150 per purchase order 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 maintenance in an activity-based performance report?

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

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 building and equipment (net) account at the end of July?

The first section of the master budget is the financial budget.

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: Unit sales for 2016 26,000 Unit production for 2016 26,000 Budgeted fixed overhead for 2016: Supervision $ 800 Depreciation 2,000 Rent 100 Budgeted variable costs per unit: Direct materials $0.15 Direct labor 0.20 Supplies 0.02 Indirect labor 0.05 Power 0.02 The following actually occurred: Actual unit sales for 2016 24,000 Actual unit production for 2016 28,000 Actual fixed overhead for 2016: Supervision $ 850 Depreciation 2,000 Rent 100 Actual variable costs: Direct materials $3,500 Direct labor 4,900 Supplies 530 Indirect labor 1,250 Power 470 -Refer to Figure 8-8. The total actual costs for 2016 were