ACCOUNTING 22/23/24

in each of the following formulas, supply the words that should be inserted for each number in the boxes (Actual quantity x )-(standard quantity * ) =total materials variance ( *actual price)-(actual quantity * )= material price variance (Actual quantity * ) - ( * standard price)= material quantity variance

(Actual quantity * actual price) - (standard quantity * standard price) (Actual quantity *actual price)- (actual quantity * standard price) = material price variance (Actual quantity * standard price) - (standard quality * standard price) = material quantity variance

COORDINATING THE PREPARATION OF THE BUDGET IS THE RESPONSIBILITY OF THE

BUDGET COMMITTEE

Budget control

Budget contribute to the control of operations

which of the following lists includes only financial budgets?

Budgeted balance sheet, cash budget, and the capital expenditures budget

For Goody company, the budgeted cost for one unit of product is direct materials $10, direct labor $20, and manufacturing overhead 80% of direct labor cost. If 25000 units are expected to be sold at $65 each what is the budgeted gross profit?

Budgeted cost per unit 10+20+(20*0.8)=46 Gross profit per unit 65-46=19 Total budgeted gross profit 25000*19=475000 direct materials M=$10 per unit direct labor L =$20 per unit manufacturing overhead O= 80% of L=0.8*20=16 per unit selling price S=$65 per unit Units sold (N)= 25,000 units The budgeted gross profit for 25,000 units is: P=N*(S-(M+L+O) P=25000*(65-(10+20+16)) P=475000 The budgeted gross profit for Goody Company is $475,000

IN THE DIRECT MATERIAL BUDGET, THE QUANTITY OF DIRECT MATERIALS TO BE PURCHASED IS COMPUTED BY ADDING DIRECT MATERIALS REQUIRED FOR PRODUCTION.

DESIRED ENDING DIRECT MATERIALS LESS BEGINNING DIRECT MATERIALS

in preparing the direct materials budget for Quan company, management concludes that required purchases are 64000 units. if 52000 direct materials units are required in production and there are 9000 units of beginning direct materials, What is the desired units of ending direct materials?

Desired units of ending direct materials 64000-52000+9000 desired ending inventory = 21000

AT THE BEGINNING OF THE YEAR, GOLDENROD ESTIMATED IT WILL SELL 5000 UNITS DURING THE FIRST QUARTER OF THE CURRENT YEAR WITH A 10% INCREASE IN SALES EACH QUARTER. IT IS GOLDENRODS POLICY TO MAINTAIN AN ENDING INVENTORY EQUAL TO 20% OF THE NEXT QUARTERS BUDGETED SALES. EACH SCOOTER COSTS $100 TO PRODUCE AND IS SOLD FOR $150. HOW MUCH IS THE BUDGETED SALES REVENUE FOR THE THIRD QUARTER OF THE CURRENT YEAR?

ESTIMATED FIRST QUARTER SALES 5000+(5000*10%) =5500. ESTIMATED SECOND QUARTER SALES IN UNITS (5500). ESTIMATED SECOND QUARTER SALES (5500) +(5500*10%) = 6050 third-quarter sales. 6050*150= 907500

Compared TO BUDGETING, LONG-RANGE PLANNING GENERALLY HAS THE

LONGER TIME PERIOD

THE ESSENTIALS OF EFFECTIVE BUDGETING INLUDES

MANAGEMENT ACCEPTANCE RESEARCH AND ANALYSIS SOUND ORGANIZATIONAL STRUCTURE

SET OF INTERRELATED BUDGETS THAT CONSTITUTES A PLAN OF ACTION FOR A SPECIFIED TIME PERIOD

MASTER BUDGET

THE MOST COMMON BUDGET PERIOD IS

ONE YEAR

THE DIRECT LABOR BUDGET AND THE MANUFACTURING OVERHEAD BUDGET ARE PREPARED DIRECTLY FROM THE

PRODUCTION BUDGET

for the quarter ended March 31, 2020, Croix company accumulates the following sales data for its newest guitar, The edge: 328100 Budget; 303000 actual sales were 398900 Prepare a static budget report for the second quarter and for the year to date

Product line guitar Second Quarter budget: 382900 actual: 398900 difference: 16000 Favorable YTD budget: 711000 Actual: 701900 difference: 9100 Unfavorable

in Rooney company direct labor is $17 per hour. The company expects to operate at 11000 direct labor hours each month. In January 2020, direct labor totaling 224300 is incurred in working 12200 hours

Product line: direct labor budget: actual: difference:

Alou company has 20,000 beginning finished goods units. Budgeted sales units are 160,000 if management desires 15,000 ending finished goods units, What are the required units of production?

Required units of production (160,000 +15,000=!75000-20000=155000

EACH OF THE OTHER BUDGETS IN THE MASTER BUDGET DEPENDS ON THE

SALES BUDGET

OPERATING BUDGETS

SALES BUDGET PRODUCTION BUDGET BUDGETED INCOME STATEMENT

THE BUDGETED INCOME STATEMENT

STATEMENT IS AN OPERATING BUDGET, NOT A FINANCIAL BUDGET

WHO HAS RESPONSIBILITY FOR COORDINATING THE PREPARATION OF THE BUDGET

THE BUDGET COMMITTEE

WHICH OF THE FOLLOWING IS ONE OF THE FACTORS THAT MUST BE PRESENT IF BUDGETS ARE TO BE EFFECTIVE?

THE COMPANY MUST HAVE A SOUND ORGANIZATIONAL STRUCTURE

WHICH ONE OF THE FOLLOWING IS NECESSARY IF A COMPANY EXPECTS ITS BUDGET TO BE EFFECTIVE?

THE COMPANY MUST HAVE A SOUND ORGANIZATIONAL STRUCTURE

Which one of the following is part of the budgetary control process?

The difference between actual and budget amounts must be examined. managers must modify future plans corrective action must be taken by management

candy manufacturers produce a variety of candies including fudge. in budgeting for production, the company requires that 20% of the next budgeted sales be on hand at the end of each month. budgeted sales of fudge for the next four months are: February -45000 lbs. march -60000lbs April -90000 lbs. May -750000 lbs what is the budgeted production for April? 87000 78000 93000 105000

The formula used to arrive at production budget is budgeted sales + budgeted ending inventory - budgeted beginning inventory. Beginning inventory for April is ending inventory from March, which is 20% of 90,000 pounds.90,000 + (75,000 x 20%) - (90,000 x 20%) = 87,000 pounds.

the budgeted balance sheet is

developed from the budgeted balance sheet for the preceding year and the budgets for the current year.

The production budget shows both unit production data and unit cost data

false

standard costs are the expected total costs of completing a job. is this correct

no this is not correct

Ortiz company's manufacturing overhead budget shows total variable costs of 198,000 and total fixed costs of 162000. Total production in units is expected to be 150,000. It takes 20 minutes to make one unit, and the direct labor rate is $15 per hour. Express the manufacturing overhead rate as A. a percentage of direct labor cost, and b) an amount per direct labor hour.

percentage of direct labor: [(variable + fixed )/Total labor cost] * 100 [(198000+162000)/(150000(1/3)15]*100=48 amount per direct labor hour: (variable + fixed ) / total time (hours) to make units (198000+162000)/[(1/3)*150000]=7.2

for the quarter ended March 31, 2020, Croix company accumulates the following sales data for its newest guitar, The edge: 314100 budgets; 328500 actuals prepare a static budget report for the quarter

product line: Guitar the edge budget: 314100 Actual: 328500 Difference: 14400 Favorable

the primary benefits of budgeting include all of the following

provides definite objectives for evaluating performance creates an early warning system for potential problems motivates personnel throughout the organization.

what is used in preparing for the budgeted income statement

sales budget selling and administrative budget direct labor budget

Everly company's variable selling and administrative expenses are 12% of net sales. Fixed expenses are 50000 per quarter. The sales budget shows expected sales of 200,000 and 240,000 in the first and second quarters, respectively. What are the total budgeted selling and administrative expenses for each quarter?

total budgeted selling and administrative expenses 1st quarter 74000 2nd Quarter 78800

Budgeting facilities the coordination of activities within the business by correlating the goals of each segment with overall company objectives

true

The use of budgets in controlling operations is known as budgetary control

true

Microtech plan to sell 2000 computers in April; 1900 in May; and 2000 in June. the company keeps 15% of the next month's sales as ending inventory. How many units should Microtech produce in May?

1900+(.15*2000)-(.15*1900)=1915

the production budget of justus company calls for 80000, units to be produced. if it takes 45 minutes to make one unit and the direct labor rate is 16 per hour , what is the total budgeted direct labor cost?

80000*0.75(45minutes/60minutes*16=960,000

LONG-RANGE PLANNING USUALLY ENCOMPASSES A PERIOD OF

AT LEAST 5 YEARS

Netherman company has credit sales of 600000 in January. Past experience suggests that 40% is collected in the month of sale, 50% in the month following the sale, and 10% in the second month following the sale. Compute the cash collections from January sales in January, February, and March

Cash collections January=240000 February=300000 March=60000 We have given that Note man company has credit sales of January = $60000 It is given that 40% is collected in the month of sale So cash collected in January 600000*40/100=240000 Cash collected in February= 600000*50/100=300000 Cash collected in march = 600000*10/100=60000

THE MOST COMMON BUDGET PERIOD IS A

YEAR

Paige company estimates that unit sales will be 10,100 in quarter 1, 12,300 in quarter 2, 14800 in quarter 3, and 18900 in quarter 4. Using a sales price of $81 per unit. prepare the sales budget by quarters for the year ending December 31, 2020.

a) Data and calculations: sales in units quarter 1: 10100 quarter 2: 12300 quarter 3:14800 quarter 4 : 18900 Total: 56100 Unit sales price quarter 1,2,3,4,total :81 Sales value quarter 1: 818100 quarter 2:996300 quarter 3: 1198800 quarter 4 1530900 Total 4544100 b) Paige's sales budget is a financial plan which computes the expected sales revenue based on an expected selling price and sales unit. Paige uses the sales budget to forecast its future sales revenue. The preparation of the sales budget by Paige Company will ensure the efficient allocation of business resources, thereby saving time, effort, and money.

A standard imposed by a governmental agency is known as a regulation . Do you agree

agree

accounting plays a relatively important role in budgeting

agree

the flexible budget formula is fixed costs 50000 plus variable costs of $4 per direct labor hour. What is the total budgeted cost at a) 9000 hours and b) 12345 hours?

at 9000 hours total budgeted costs are $ At 12345 hours, total budgeted costs are $ (9000*4)+50000=86000 (12345*4)*50000=99380

the format of a cash budget is

beg cash+ cash receipts - cash disbursements +/- financing = ending cash

the important end- product of the operating budgets is the

budgeted income statement