Managerial Accounting Ch 8 connect

What would happen if a company penalized individuals for not meeting budgeted goals?

Individuals would become too focused on meeting goals and add too much budgetary slack

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

Manufacturing overhead

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

Manufacturing overhead budget, direct materials budget, and direct labor budget

Which budget consists of a number of separate but interdependent budgets that formally lay out a company's sales, production and financial goals?

Master Budget

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

Non-cash expenses

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

Planning

The first line of the direct labor budget consists of the budgeted units expected to be _______ during the period

Produced

When preparing a direct materials purchase budget what is needed to calculate the raw materials to be purchased?

Raw materials required per unit, and beginning inventory of raw materials

The underlying idea behind _______ accounting is that a manager should be held accountable for only those items the manager can actually control

Responsibility

A detailed schedule showing the expected sales for the budget period is presented on the ______budget

Sales

What is needed to prepare a sales budget?

The budgeted number of units to be sold

The purpose of a budget should be to

measure operating results, establish goals, and isolate areas needing attention

In a manufacturing company, the _________ 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

The receipts section:

-lists all of the cash inflows, except from financing, expected during the budget period -Major source of receipts from Sales

The disbursements section:

-summarizes all cash payments planned for the budget period -payments including raw materials purchases, direct labor payments, manufacturing overhead costs, etc.

The Cash budget has 4 sections:

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

Carter production Inc's required production for the first six month of the year is as follows: Month / Required Production Jan 50,000 Feb 70,000 March 85,000 April 105,000 May 110,000 June 120,000 Each unit requires 2 pounds of material. Management believes that an appropriate ending inventory is 20% of next month's production needs. Calculate the pounds of material to be purchased in April

212,000 pounds April production needs (105,000x2) 210,000+ Ending inventory (20% of May production needs: 110,000x2x20%)44,000- Beginning inventory (20% of April) 42,000 = 212,000 pounds

Sperling Company's master budget shows expected sales of 10,000 units and expected production of 11,000 units for the month of March. Each unit requires 1/2 hour of direct labor. The direct labor rate is $15.00 per hour. Calculate the expected total direct labor cost for the month of March

82,500 (****units to be produced x time per unit x rate per hour = 11,000 x 1/2 x 15 = 82,500)

Required borrowing on a cash budget is calculated by:

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

Which type of budgets keep managers focused one year ahead, so they do not become too narrowly focused on short-term results?

Continuous or Perpetual

Gathering feedback to ensure that the plan is being followed is referred to as __________

Control

Financing section

Details the borrowing and principal and interest repayments projected to take place during the budget period

In a manufacturing company which budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories?

Direct materials budget

Direct materials purchases, direct labor payments and manufacturing overhead costs are all listed in which section of the cash budget?

Disbursements

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted _______ __________

Income statement

Cash excess/deficiency section:

deals with excess cash or deficiency of cash in budget during any given period

Empowering managers to create their own budget is effective. It's called a self- ______ budget

imposed

The budget that shows the budgeted expenses for areas other than manufacturing is the _______ and _________ expense budget

selling / administrative

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

Beginning

A quantitative plan for acquiring and using resources over a specified time period is a(n) ________

Budget

Which of the following is related to submitting a budget that is too easy to attain?

Budgetary slack

Both the production and selling administrative expense budgets are prepared using information directly from the ______ budget

Sales

Madison Corporation's expected beginning cash balance is 35,000$. Cash collections are budgeted at $50,000 and cash disbursements are estimated to be $80,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $10,000. Calculate the expected ending cash balance for the month

25,000 35,000+50,000-80,000= 5,000. Since they can borrow in increments of 10,000 they must borrow 20,000 to meet or exceed the minimum cash balance making the ending balance 25,000