Block 3- MyAccountingLab

Bradford, Inc., expects to sell 8,000 ceramic vases for $21 each. Direct materials costs are $4, direct manufacturing labor is $10, and manufacturing overhead is $4 per vase. The following inventory levels apply to 2019: Beginning InvEnding InvDM Inventory3,000 units3,000 unitsWIP Inventory0 units0 unitsFG Inventory400 units800 units On the 2019 budgeted income statement, what amount will be reported for cost of goods sold? Select one: a. $198,000 b. $151,200 c. $144,000 d. $136,800

$144,000

The following information pertains to the January operating budget for Murphy Corporation, a retailer: Budgeted sales are $210,000 for January Collections of sales are 40% in the month of sale and 60% the next month Cost of goods sold averages 66% of sales Merchandise purchases total $159,000 in January Marketing costs are $3,600 each month Distribution costs are $5,300 each month Administrative costs are $10,100 each month For January, budgeted gross margin is ________.

$74,880

Which of the following is true of flexible budget?

It calculates total variable cost by multiplying actual units by budgeted variable cost per unit.

Which of the following best describes a rolling budget?

It is created continually by adding a month, quarter, or year to the period just ended

Fixed overhead costs include

Leasing of machinery used in a factory

The variable overhead efficiency variance measures the difference between the ________, multiplied by the budgeted variable overhead cost per unit of the cost-allocation base

actual quantity of the cost-allocation base used and the budgeted quantity of the cost-allocation base that should have been used to produce the actual output

The amount reported for fixed overhead on the static budget is also reported

as flexible budget costs

Decisions determining the level of fixed overhead costs to be incurred are typically made

at the start of a budget period

The flexible budget contains

budgeted amounts for actual output

Effective planning of fixed overhead costs includes

choosing the appropriate level of investment in productive assets

Kaizen budgeting involves

continual small cost reductions

The Japanese use the term kaizen when referring to

continuous improvement

When fixed overhead spending variance is unfavorable, it can be safely assumed that

flexible budget amount is lower than actual costs incurred

Fixed overhead costs

have no spending variance

Financing decisions primarily deal with

how to obtain funds to acquire resources

A flexible budget

is developed at the end of the period

A purchasing manager's performance is best evaluated using information such as

price and terms bargaining effectiveness, achievement of quality goals, and direct materials price variance

The order to follow when preparing the operating budget is ________.

revenues budget, production budget, direct manufacturing labor costs budget , and cost of goods sold

Financial planning software packages assist management with

sensitivity analysis in their planning and budgeting activities

Operating decisions primarily deal with

the best use of scarce resources

An unfavorable fixed overhead spending variance indicates that ________.

the price of fixed overhead items cost more than budgeted

Efficiency is

the relative amount of inputs used to achieve a given output level

The primary reason for high actual operating profits was

the variable-cost variance

Which of the following is the fundamental purpose of responsibility accounting?

to gather information that will enable future improvement

When performing a sensitivity analysis, if the selling price per unit is increased, then the

total costs for sales commissions and other non-manufacturing variable costs will increase

An unfavorable efficiency variance for direct manufacturing labor might indicate that

work is scheduled inefficiently