SB chapter 4

Product costs ______

'attach' to units of product as they are produced or purchased for resale, are also called inventoriable costs

Four main sections of cash budget

1. cash receipts section 2. cash disbursements section 3. cash excess or deficiency section 4. financing section

Cash budget

Beginning cash balance + total cash receipts = total cash available +/- total cash disbursements = excess (deficiency) of cash available Financing: borrowings repayments interest = Total financing Ending cash balance

Selling and Administrative expense budget

Budgeted unite sales x var. selling and adm. expense per unit = var. selling and adm. expense + fixed selling and adm. expenses = total selling and adm. expenses - deprecitation = cash disbursements for selling and adm. expenses

Which of the following are differences between the traditional and contribution format to income statement?

Contribution format statements make it easier to predict how decisions affect the future, traditional income statements focus on cost classifications. Contribution format statements focus on cost behavior

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

Direct materials, manufacturing overhead, direct labor

Which of the following is not a cost classification associated with decision making

Indirect cost

What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses

Non-cash expenses

The cash budget uses information from several other budgets. Which of the following budget is NOT used to prepare the cash budget?

Production

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget?

Raw materials required per unit, beginning inventory of raw material

Direct materials budget

Required Production *Raw materials need per unit =Raw Materials Needed to meet Production +desired ending raw materials inventory =Total Raw Material Needs -beginning raw materials inventory =Raw Materials to be purchased *cost of raw materials per unit =Cost of Raw Materials to be purchased

What number does the direct materials budget take directly from the production budget?

Required production

direct labor budget

Required production in units x Direct labor time per unit (hours) = total direct labor-hours needed x direct labor cost per hour = total direct labor cost

Budgeted income statement

Sales Revenue - Cost of Goods Sold = Gross margin - Expenses = net Operating Income - Interest Expense = Net Income

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

Selling & Administrative expense, production

Which of the following is needed to prepare a sales budget?

The budgeted number of units to be sold

A detailed plan for the future that is usually expressed in formal quantitative terms is ______.

a budget

The receipts section of the cash budget lists _____

all cash inflows except borrowing

Preventive controls include_____

authorization, segregation of duties

To prepare. a budgeted balance sheet as of December 31, 2024, data is needed from the _____ December 31, 2023

balance sheet as of

A budgeted balance sheet is developed using data from the _____ of the budget period and data contained in the various schedules

beginning

How individual costs react to changes in activity level is referred to as cost

behavior

Merchandise purchases budget

budgeted cost of goods sold + desired ending merchandise inventory = total needs - beginning merchandise inventory = required merchandise purchases

Manufacturing OH budget

budgeted direct labor-hours x var. man. OH rate = var. man. OH + fixed man. OH = total man. OH - Deprectiation = cash disbursement for man. OH

Production budget

budgeted unit sales + desired ending inventory = total needs - beginning inventory = production needs

Fixed costs that cannot easily be changed and often lock a company into a multi-year decision are called

committed fixed costs

A type of indirect cost incurred to benefit more than one cost object is a ____ cost

common

Budget ____

communicate management's plan throughout the organization

A _____ _____ is anything for which cost data are desired - including products, customers, plants, office locations, and departments

cost, object

Cost objects include_____

customers, organizational subunits/departments, anything for which cost data is desired

Differential costs, opportunity costs and incremental costs are all cost classifications used in

decision making

The number of working hours required to satisfy the production budget is shown on the

direct labor budget

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 material

the cost of unsold units is computed on the _____ budget

ending finished goods inventory

Planning involves

establishing goals and specifying how to achieve them

A performance report

helps identify and eliminate sources of unsatisfactory performance, can be used to help evalutate and reward employees

The amount of goods for resale to be acquires from suppliers during the period is shown on the ____ ______ budget.

inventory purchase

Perhaps the most basic managerial skill is the ability to____

make intelligent decision

All costs of production other than direct materials and direct labor are. shown on the _______ _______ budget

manufacturing overhead

The calculation of unit product cost requires information from. the _____ budget

manufacturing overhead

The accural concept that costs incurred to generate a revenue are expensed in the same period the revenue is recognized is known as the ____ principle

matching

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

participative

A report comparing actual results to budgeted amounts that is often used to reward and evaluate employee is called a ___ report

performance

Developing goals and preapring various budgets to achieve those goals is part of ____

planning

An internal control that deters the occurence of undesirable events is a

preventive control

Inventoriable costs is another term for ____ cost

product

In a manufacturing company, the budgets. for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the _____ budget.

production

The direct materials budget directly relies on the _____ budget

production

Committed fixed costs include

real estate taxes, top management salaries

Cost behavior

refers to how a cost will change as activity level changes, categorizes costs as fixed, mixed and variable

The assumption that cost behavior is strictly linear is reasonably valid within the _____ _____ of activity

relevant range

Both the productions and selling and administrative expense budgets are prepared using information directly from the ____ budget

sales

The first step in the budgeting process is the preparation of the ____ budget

sales

Budgeted expenses for areas other than manufacturing are shown on the _____ budget

selling and administrative

In large organization, many smaller individual budgers submitted by department heads and other responsible people comprise the _____ budget.

selling and administrative

customers, employees, suppliers, communities, and environment and human rights advocates are all stakeholders which a company might have a corporate _____ ____ to serve

social responsibility

Big data can be both "___", such as memos and reports, and "____" such as videos, pictures, audio, and other digital forms

structured, unstructured

A Company can repay. outstanding principal and interest when _____

the cash excess is greater. than the minimum required cash balance.

Budgetary slack occurs when a manager submits a budget that is. _____

too easy to attain

The term often used to describe how an organization's functional departments interact with one another to from business processes is

value chain