Chapter 8 Managerial accounting

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured

budgeted income statement

budgets:

communicate managments plan throughout the organization

working hours required to satisfy the production are shown on the ___ budget

direct labor budget

the cost of unsolid units is computed on the __ budget

ending finished goods inventory budget

all costs of production other than direct materials and direct labor are shown on the __ budge

manu oh

A number of seperate but interdependent, budgets that formally lay out the company's sales, production and financil goals are contained in the

master budget

consists of a number of separate but interdependent budgets that formally lay out the company's sales, production, and financial goals.- The master budget culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet.

master budget

a budget that is prepared with the full cooperation of managers at all levels is a self imposed or ______ budget

participatory

A budget that keeps managers focused at least one year ahead is a continued or _____ budget

perpetual

Developing goals and preparing various budgets to achieve those goals is part of the _____ process

planning

developing goals for the budget is ___ while ___ involves steps taken to ensure that steps towards meeting the goal are being followed

planning, control

In a manufacturing company, the ___ production budget is used to determine the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget

production

A manager cannot complain the budget was unrealistic or unattainable because they were part of making the budget

self imposed

budgeted expenses for areas other than manu are shown on the _____ budget

selling and admin

limitations of self imposed budgeting include

suboptimal budget recommendations budgetary slack

When profit targets are set by top managers:

waste may occur too much slack may be allowed goals may be unrealistically high

To calculate total sales on sales budget, multiply budgeted sales in units by:

sales price per unit

gathering feedback to ensure that the plan is being followed is referred to as

control

the direct labor budget is based on the ____ budget

production

under the concept of ___ ___ managers should only be held accountable for items they can actually control

responsibility accounting

What is the subtracted from total budgeted selling and admin expenses to determine the cash disbursments for selling and administrative expenses?

non cash expenses

The purpose of a budget should be to:

- establish goals - isolate areas needing attention - measure operating results

borrowing money is required whenever

- the cash excess is less than minimum required cash balance - there is a cash deficiency

which of the following is needed to

Beginning inventory of raw materials and Raw materials required per unit

in a manufacturing company, the ________ budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories

Direct Materials Budget

risks of not knowing in advance how much labor time will be needed throughout the budget period includes

Labor shortages, low employee moral erratic layoffs

In a manufacturing company, the ___ budget is prepared right after the sales budget

Production Budget

a detailed schedule showing the expected sales for the budget period is presented on the ____ budget

Sales Budget

required borrowings on a cash budget is calculated by:

adding the desired ending cash balance to the amount of the cash deficiency

budgets:

and the budgetting process can uncover potential bottlenecks before they occur force managers to think about and plan for the future coordinat the activities of the entire organizations by intregrating the plans of its various parts define goals and objectives that can serve as benchmarks for evaluating subsequent performance

which of the following budgets are directly based on information from the sales budget

1. Production budget2. Selling and administrative expense budget

Which of the following budgets are needed to calculate unit product costs?

1. direct labor budget2. manufacturing overhead budget3. direct materials budget

To prepare a budgeted balance sheet as of Dec 31, 2017, data is needed from the:

balance sheet as of December 31, 2016

S&P enterprises has scheduled direct materials purchases of $120000 in April, $140,000 in May and $160,000 in June. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of may

$135,000May is the month after April so, the company will be paying for 75% of May purchases + 25% of April purchases. May purchases ($140.000 x 75%) $105,000 + April purchases ($120,000 x 25%) $30,000 = $135,000

Edison corporation's variable manufacturing overhead rate is $5 per direct labor hour, total budget fixed overhead is $25,000 per month. The $25000 per month includes $7000 in deprecation expense. Total budgeted direct labor hours for the month of July is $20000. Budgeted cash disbursements for manufacturing overhead for July equals

(20,000 x 5) 100,000 + 25,000 - 7,000 = 118000

payments for direct materials, direct labor, and manu overhead costs are all listed in the ____ section of the cash budget

disbursment

Davidsons corporation master budget shows expected direct labors cost of $90000 for the month of May. During May, the company's expected sales equal 12,000 units and exptected production is 15,000 units. If each unit requires 1/2 hours of direct labor, the budgeted direct labor rate is

$12 per hour15,000 x 1/2= 7,500 required labor hours$90,000/7,500 = $12 per hour