Acct 211 Week 5

The formula to determine the materials to be purchased is

(units to produce times materials required for each unit) plus desired ending materials inventory minus beginning materials inventory

A retail store has 10,000 square feet of space and incurs rent costs of $5,000 per month. If Department A uses 2,000 square feet of space, the amount of rent allocated to the department will be $.

1000

A company has the following budget information: Sales: $118,800; COGS: $48,500; Depreciation expense: $1,500; Interest expense: $250; Other expenses: $41,880. If the company budgets 40% for income tax expense, the amount of budgeted income tax expense will be $.

10668

A manufacturing company has budgeted direct labor hours of 600 at a variable overhead rate per direct labor hour of $20. The budgeted fixed cost is $500 per month. The total budgeted overhead cost will be $_.

12500

A company expects to sell 400 units of Product X in January and expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be $.

13240

A manufacturing company has budgeted direct labor hours of 940 at a budgeted direct labor hour rate of $15. The budgeted fixed cost is $950 per month. The total budgeted overhead cost will be $_.

15050

A company has the following budget information: Sales: $118,800; COGS: $48,500; Depreciation expense: $1,500; Interest expense: $250; Other expenses: $41,880. If the company budgets 40% for income tax expense, the budgeted net income will be $.

16002

A manufacturing company's sales budget indicates the following sales: January: $30,000; February: $20,000; March: $15,000. The company expects 80% of the sales to be on credit. Credit sales are collected 30% in the month of the sale and 70% in the month following the sale. The total cash receipts collected during March will be $.

17800

A manufacturing company has budgeted production of 5,000 units for May and 4,400 units in June. Each unit requires 3 pounds of materials at a cost of $10 per pound. On May 1, there are 2,750 pounds of materials on hand. The company desires an ending materials inventory of 60% of the next month's materials requirements. The total cost of direct materials purchases for May will be $.

201700

A merchandising company's sales budget indicates the following sales: January: $25,000; February: $30,000; March: $35,000. Sales personnel are paid a salary plus commission. Salaries are expected to be $5,000 per month and the commission is 10% of sales. Additionally, advertising is expected to be $600 per month. The total selling expenses for the quarter will be $.

25800

A company's sales budget indicates the following sales: January: 25,000; February: 30,000; March: 35,000. Beginning inventory is 12,000 units and the company desires ending inventory of 45% of the next month's sales. Units to be produced in January will be .

26500

Direct materials are $15 per unit; direct labor is $7 per unit and variable overhead costs are $2 per unit. If total product costs are $27, what are fixed costs per unit?

3

A manufacturing company's sales budget indicates the following sales: January: $25,000; February: $30,000; March: $35,000. The company expects 70% of the sales to be on credit and the remainder to be cash sales. Credit sales are collected in the month following the sale. The total cash collected during March will be $.

31500

If direct materials per unit are $20, direct labor per unit is $10, variable overhead per unit is $2, and fixed overhead per unit is $1, total product cost per unit is $.

33

A manufacturing division has an average assets of $1,800,000 and income of $720,000. The division's return on investment is %.

40%

JP Service Company has budgeted direct labor hours of 100 and direct labor cost per hour of $25 for data analysis personnel and budgeted direct labor hours of 50 and direct labor cost per hour of $30 for staff accountants. JP Service Company's cost of direct labor is $_?

4000

A manufacturing company has units to produce of 940 units for the month. Each unit requires 3.5 hours of labor to produce. The cost of direct labor is $15 per hour. The total cost of direct labor for the month will be $.

49350

A company incurs advertising costs of $10,000. The company's three selling departments have the following sales: Department 1—$10,000; Department 2—$30,000; Department 3—$40,000. Advertising is allocated based on percent of sales. The amount of advertising allocated to Department 3 will be $.

5000

A company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units in beginning inventory. If they desire ending inventory of 10% of the next quarter's sales, units will need to be produced in the second quarter.

509

A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Salary for sales manager: $30,000; Miscellaneous administrative expenses: $5,000. The total selling expenses on the January selling expense budget will be $.

60000

If a company has $2,000,000 in average assets, and desires to earn a return on investment of 30%, the company will need to earn income of $.

600000

A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Depreciation on store equipment: $25,000; Rent on administrative building: $30,000; Miscellaneous administrative expenses: $5,000. The total general and administrative expenses on the January general and administrative expense budget will be $.

61250

A responsibility accounting performance report contains which of the following items? (Check all that apply.)

Budgeted amounts The difference between actual and budgeted amounts A list of all controllable costs Actual amounts

Budgeted performance considers all of the following in relation to a benchmark: (Select all that apply).

Company factors Economic factors Industry factors

Which report is more effective in evaluating the performance of profit centers?

Departmental contribution to overhead reports

True or false: Controllable costs are the same as direct costs.

False

A manufacturing company would typically prepare all of the following budgets except:

Merchandise inventory budget

The formula to figure out the profit margin of a company is (Net income/Accounts receivable/Net sales) divided by (Net income/Cash/Net sales).

Net income Net Sales

Which of the following items would be included on the capital expenditures budget? (Check all that apply.)

Plant asset purchases Sale of plant assets

True or false: Depreciation on non-manufacturing assets and property taxes are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget.

True

Most companies prepare a(n) ______ budget that is separated into ______ budgets.

annual; quarterly or monthly

Budgeting guidelines that help insure budgeting is a positive motivating force include: (Check all that apply.)

attainable goals. participatory budgeting. the opportunity to explain differences between actual and budgeted amounts.

A(n) is a formal statement of a company's plans in dollars.

budget

The budget which shows predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period is the:

budgeted balance sheet

The formula to compute the budgeted direct labor cost for a service firm is:

budgeted direct labor hours times direct labor cost per hour

The formula to compute the units to purchase in a merchandise purchases budget is:

budgeted sales units plus desired ending merchandise inventory units minus beginning merchandise inventory units

All of the following are guidelines that should be followed for budgets to be a positive motivating force except:

budgets should be prepared using a top-down approach

The reporting of expected cash receipts and cash payments related to the sale and purchase of plant assets is reported on the expenditures budget.

capital

The _ conversion cycle measures the average time it takes to convert cash outflows into cash inflows.

cash

A cost that a manager can determine or influence is called a(n) cost.

controllable

A departmental contribution to overhead report is based on:

controllable costs

A department that incurs costs without generating revenues is considered a(n):

cost center

The accounting department of a manufacturing company is a(n):

cost center

The cash conversion cycle is computed as:

days' sales in accounts receivable plus days' sales in inventory minus days' payable outstanding

Profit centers commonly use _____ to report profit center performance:

departmental income statements

Departmental income statements include:

direct and indirect expenses

The primary purpose of using short-term budgets is to:

evaluate performance and take necessary corrective action

The balanced scorecard is a unique system of performance measures in that it: (Check all that apply.)

has a focus on customer satisfaction. has multiple perspectives. has financial and nonfinancial measures.

Transfer prices: (Check all that apply.)

have a direct impact on division income. are transfers within the same company.

Decisions related to allocating expenses include: (Check all that apply).

how to allocate service department expenses how to allocate indirect expenses

Costs incurred to produce or purchase two or more products at the same time are called costs.

joint

Costs which are incurred to produce two or more products at the same time are called _____ costs:

joint

Transfer pricing can use the following approaches:

negotiated price cost market-based

Evaluating manager's performance based solely on financial measures has limitations. Therefore, companies should consider using measures to help evaluate manager performance.

nonfinancial

The first step in preparing the master budget is planning the budget.

sales

An example of a cost that a department manager would not control is:

the manager's own salary

Some disadvantages of relying solely on financial measures include that: (Check all that apply.)

they can encourage managers to focus too heavily on short-term financial goals. some profitable opportunities may be rejected to keep return on investment high. residual income is not as useful when comparing investment centers of different sizes.

The formula to compute the budgeted direct labor cost is

units to produce times direct labor required per unit times direct labor cost per hour

Reports to ______ managers are usually less detailed because they need to concentrate on the key issues.

upper-level