ACCOUNTING
True or False
An unfavorable variance is conclusive evidence of poor performance
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Tuesday, May 31, 2011
Decreasing demand for a product may create a favorable sales-volume variance
ACCOUNTING
True or False
Decreasing demand for a product may create a favorable sales-volume variance
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True or False
Decreasing demand for a product may create a favorable sales-volume variance
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The flexible-budget variance may be the result of inaccurate forecasting of units sold
ACCOUNTING
True or False
The flexible-budget variance may be the result of inaccurate forecasting of units sold
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True or False
The flexible-budget variance may be the result of inaccurate forecasting of units sold
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The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance
ACCOUNTING
True or False
The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance
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True or False
The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance
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The only difference between the static budget and flexible budget is that the static budget is prepared using planned output
ACCOUNTING
True or False
The only difference between the static budget and flexible budget is that the static budget is prepared using planned output
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True or False
The only difference between the static budget and flexible budget is that the static budget is prepared using planned output
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If budgets contain slack, cost variances will tend to be favorable
ACCOUNTING
True or False
If budgets contain slack, cost variances will tend to be favorable
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True or False
If budgets contain slack, cost variances will tend to be favorable
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An unfavorable variance may be due to poor planning rather than due to inefficiency
ACCOUNTING
True or False
An unfavorable variance may be due to poor planning rather than due to inefficiency
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True or False
An unfavorable variance may be due to poor planning rather than due to inefficiency
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A favorable variance should be ignored by management
ACCOUNTING
True or False
A favorable variance should be ignored by management
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True or False
A favorable variance should be ignored by management
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The essence of variance analysis is to capture a departure from what was expected
ACCOUNTING
True or False
The essence of variance analysis is to capture a departure from what was expected
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True or False
The essence of variance analysis is to capture a departure from what was expected
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Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention
ACCOUNTING
True or False
Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated
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True or False
Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated
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A favorable variance results when budgeted revenues exceed actual revenues
ACCOUNTING
True or False
A favorable variance results when budgeted revenues exceed actual revenues
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True or False
A favorable variance results when budgeted revenues exceed actual revenues
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Information regarding the causes of variances is provided when the master budget is compared with actual results
ACCOUNTING
True or False
Information regarding the causes of variances is provided when the master budget is compared with actual results
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True or False
Information regarding the causes of variances is provided when the master budget is compared with actual results
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A flexible budget is calculated at the start of the budget period
ACCOUNTING
True or False
A flexible budget is calculated at the start of the budget period
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True or False
A flexible budget is calculated at the start of the budget period
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At the end of January, budgeted ending inventory is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
At the end of January, budgeted ending inventory is
a. $20,000
b. $28,000
c. $40,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
At the end of January, budgeted ending inventory is
a. $20,000
b. $28,000
c. $40,000
d. none of the above
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For January, budgeted cash payments for purchases are
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cash payments for purchases are
a. $14,000
b. $70,000
c. $60,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cash payments for purchases are
a. $14,000
b. $70,000
c. $60,000
d. none of the above
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2. For January, budgeted net income is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted net income is
a. $20,000
b. $30,000
c. $40,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted net income is
a. $20,000
b. $30,000
c. $40,000
d. none of the above
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For January, budgeted cost of goods sold is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cost of goods sold is
a. $20,000
b. $30,000
c. $40,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cost of goods sold is
a. $20,000
b. $30,000
c. $40,000
d. none of the above
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At the end of January, budgeted accounts receivable is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
At the end of January, budgeted accounts receivable is
a. $20,000
b. $40,000
c. $60,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
At the end of January, budgeted accounts receivable is
a. $20,000
b. $40,000
c. $60,000
d. none of the above
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For January, budgeted cash collections are
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cash collections are
a. $20,000
b. $60,000
c. $80,000
d. none of the above
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Multiple Choice
The following information pertains to the January operating budget for Casey Corporation
· Budgeted sales for January $100,000 and February $200,000.
· Collections for sales are 60% in the month of sale and 40% the next month
· Gross margin is 30% of sales
· Administrative costs are $10,000 each month
· Beginning accounts receivable $20,000
· Beginning inventory $14,000
· Beginning accounts payable $60,000. (All from inventory purchases.)
· Purchases are paid in full the following month
· Desired ending inventory is 20% of next month’s cost of goods sold (COGS)
For January, budgeted cash collections are
a. $20,000
b. $60,000
c. $80,000
d. none of the above
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Monday, May 30, 2011
What is the expected Accounts Payable balance as of May 31?
ACCOUNTING
Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected Accounts Payable balance as of May 31?
a. $11,792
b. $24,912
c. $36,704
d. $2,948
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Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected Accounts Payable balance as of May 31?
a. $11,792
b. $24,912
c. $36,704
d. $2,948
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What is the expected balance in Accounts Payable as of April 30?
ACCOUNTING
Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable as of April 30?
a. $26,532
b. $38,740
c. $12,208
d. $17,688
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Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable as of April 30?
a. $26,532
b. $38,740
c. $12,208
d. $17,688
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What is the expected balance in Accounts Payable as of March 31?
ACCOUNTING
Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable as of March 31?
a. $39,068
b. $18,312
c. $2,900
d. $30,520
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Multiple Choice
Bear Company has the following information:
Month Budgeted Purchases
January $26,800
February 29,000
March 30,520
April 29,480
May 27,680
Purchases are paid for in the following manner:
10% in the month of purchase
50% in the month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable as of March 31?
a. $39,068
b. $18,312
c. $2,900
d. $30,520
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Cash collections for October are
ACCOUNTING
Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
Cash collections for October are
a. $58,500
b. $92,400
c. $99,500
d. $88,200
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Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
Cash collections for October are
a. $58,500
b. $92,400
c. $99,500
d. $88,200
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What is the ending balance of accounts receivable for September, assuming uncollectible balances are written off during the second month following the
ACCOUNTING
Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
What is the ending balance of accounts receivable for September, assuming uncollectible balances are written off during the second month following the sale?
a. $99,500
b. $48,500
c. $44,900
d. $46,500
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Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
What is the ending balance of accounts receivable for September, assuming uncollectible balances are written off during the second month following the sale?
a. $99,500
b. $48,500
c. $44,900
d. $46,500
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Cash collections for September are
ACCOUNTING
Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
Cash collections for September are
a. $71,500
b. $86,700
c. $99,500
d. $102,000
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Multiple Choice
Fiscal Company has the following sales budget for the last six months of 20x3:
July $100,000 October $ 90,000
August 80,000 November 100,000
September 110,000 December 94,000
Historically, the cash collection of sales has been as follows:
65% of sales collected in the month of sale,
25% of sales collected in the month following the sale,
8% of sales collected in the second month following the sale, and
2% of sales are uncollectible.
Cash collections for September are
a. $71,500
b. $86,700
c. $99,500
d. $102,000
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What is the ending cash balance for March?
ACCOUNTING
Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
What is the ending cash balance for March?
a. ($25,000)
b. $3,000
c. $3,200
d. $3,800
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Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
What is the ending cash balance for March?
a. ($25,000)
b. $3,000
c. $3,200
d. $3,800
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How much cash will be disbursed in total in March?
ACCOUNTING
Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be disbursed in total in March?
a. $21,000
b. $25,000
c. $44,200
d. $48,200
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Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be disbursed in total in March?
a. $21,000
b. $25,000
c. $44,200
d. $48,200
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How much cash will be paid to suppliers in March?
ACCOUNTING
Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be paid to suppliers in March?
a. $23,200
b. $28,000
c. $44,000
d. None of the above
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Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be paid to suppliers in March?
a. $23,200
b. $28,000
c. $44,000
d. None of the above
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How much cash will be collected from customers in March?
ACCOUNTING
Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be collected from customers in March?
a. $47,000
b. $43,000
c. $50,000
d. None of the above
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Multiple Choice
The following information pertains to Tiffany Company:
Month Sales Purchases
January $30,000 $16,000
February $40,000 $20,000
March $50,000 $28,000
· Cash is collected from customers in the following manner:
Month of sale 30%
Month following the sale 70%
· 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
· Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be collected from customers in March?
a. $47,000
b. $43,000
c. $50,000
d. None of the above
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The cash budget is a schedule of expected cash receipts and disbursements that
ACCOUNTING
Multiple Choice
The cash budget is a schedule of expected cash receipts and disbursements that
a. requires an aging of accounts receivable and accounts payable
b. is a self-liquidating cycle
c. is prepared immediately after the sales forecast
d. predicts the effect on the cash position at given levels of operations
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Multiple Choice
The cash budget is a schedule of expected cash receipts and disbursements that
a. requires an aging of accounts receivable and accounts payable
b. is a self-liquidating cycle
c. is prepared immediately after the sales forecast
d. predicts the effect on the cash position at given levels of operations
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The cash flow statement does NOT include
ACCOUNTING
Multiple Choice
Financial analysts use the projected cash flow statement to do all of the following EXCEPT
The cash flow statement does NOT include
a. cash inflows from the collection of receivables
b. cash outflows paid toward raw material purchases
c. all sales revenues
d. interest paid and received
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Multiple Choice
Financial analysts use the projected cash flow statement to do all of the following EXCEPT
The cash flow statement does NOT include
a. cash inflows from the collection of receivables
b. cash outflows paid toward raw material purchases
c. all sales revenues
d. interest paid and received
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Financial analysts use the projected cash flow statement to do all of the following EXCEPT
ACCOUNTING
Multiple Choice
Financial analysts use the projected cash flow statement to do all of the following EXCEPT
a. plan for when excess cash is generated
b. plan for short-term cash investments
c. project cash shortages and plan a strategy to deal with the shortages
d. project depreciation expense
Click here for the SOLUTION
Multiple Choice
Financial analysts use the projected cash flow statement to do all of the following EXCEPT
a. plan for when excess cash is generated
b. plan for short-term cash investments
c. project cash shortages and plan a strategy to deal with the shortages
d. project depreciation expense
Click here for the SOLUTION
To reduce budgetary slack management may
ACCOUNTING
Multiple Choice
To reduce budgetary slack management may
a. incorporate stretch or challenge targets
b. use external benchmark performance measures
c. award bonuses for achieving budgeted amounts
d. reduce projected cost targets by 10% across all areas
Click here for the SOLUTION
Multiple Choice
To reduce budgetary slack management may
a. incorporate stretch or challenge targets
b. use external benchmark performance measures
c. award bonuses for achieving budgeted amounts
d. reduce projected cost targets by 10% across all areas
Click here for the SOLUTION
Building in budgetary slack includes
ACCOUNTING
Multiple Choice
Building in budgetary slack includes
a. overestimating budgeted revenues
b. underestimating budgeted costs
c. making budgeted targets more easily achievable
d. all of the above
Click here for the SOLUTION
Multiple Choice
Building in budgetary slack includes
a. overestimating budgeted revenues
b. underestimating budgeted costs
c. making budgeted targets more easily achievable
d. all of the above
Click here for the SOLUTION
A PRIMARY consideration in assigning a cost to a responsibility center is
ACCOUNTING
Multiple Choice
A PRIMARY consideration in assigning a cost to a responsibility center is
a. whether the cost is fixed or variable
b. whether the cost is direct or indirect
c. who can best explain the change in that cost
d. where in the organizational structure the cost was incurred
Click here for the SOLUTION
Multiple Choice
A PRIMARY consideration in assigning a cost to a responsibility center is
a. whether the cost is fixed or variable
b. whether the cost is direct or indirect
c. who can best explain the change in that cost
d. where in the organizational structure the cost was incurred
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Responsibility accounting
ACCOUNTING
Multiple Choice
Responsibility accounting
a. emphasizes controllability
b. focuses on whom should be asked about the information
c. attempts to assign blame for problems to a specific manager
d. does all of the above
Click here for the SOLUTION
Multiple Choice
Responsibility accounting
a. emphasizes controllability
b. focuses on whom should be asked about the information
c. attempts to assign blame for problems to a specific manager
d. does all of the above
Click here for the SOLUTION
Controllability may be difficult to pinpoint because of all EXCEPT
ACCOUNTING
Multiple Choice
Controllability may be difficult to pinpoint because of all EXCEPT
a. some costs depend on market conditions
b. current managers may have inherited inefficiencies of a previous manager
c. the current use of stretch or challenge targets
d. few costs are under the sole influence of one manager
Click here for the SOLUTION
Multiple Choice
Controllability may be difficult to pinpoint because of all EXCEPT
a. some costs depend on market conditions
b. current managers may have inherited inefficiencies of a previous manager
c. the current use of stretch or challenge targets
d. few costs are under the sole influence of one manager
Click here for the SOLUTION
A controllable cost is any cost that can be _________ by a responsibility center manager for a period of time
ACCOUNTING
Multiple Choice
A controllable cost is any cost that can be _________ by a responsibility center manager for a period of time
a. controlled
b. influenced
c. segregated
d. excluded
Click here for the SOLUTION
Multiple Choice
A controllable cost is any cost that can be _________ by a responsibility center manager for a period of time
a. controlled
b. influenced
c. segregated
d. excluded
Click here for the SOLUTION
A manager of a profit center is responsible for all of the following EXCEPT
ACCOUNTING
Multiple Choice
A manager of a profit center is responsible for all of the following EXCEPT
a. sales revenue
b. the cost of merchandise purchased for resale
c. expanding into new geographic areas
d. selling and marketing costs
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Multiple Choice
A manager of a profit center is responsible for all of the following EXCEPT
a. sales revenue
b. the cost of merchandise purchased for resale
c. expanding into new geographic areas
d. selling and marketing costs
Click here for the SOLUTION
A manager of a revenue center is responsible for all of the following EXCEPT
ACCOUNTING
Multiple Choice
A manager of a revenue center is responsible for all of the following EXCEPT
a. service quality and units sold.
b. the acquisition cost of the product or service sold
c. price, product mix, and promotional activities
d. sales and marketing costs
Click here for the SOLUTION
Multiple Choice
A manager of a revenue center is responsible for all of the following EXCEPT
a. service quality and units sold.
b. the acquisition cost of the product or service sold
c. price, product mix, and promotional activities
d. sales and marketing costs
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The manager of a hobby store that is part of a chain of stores is MOST likely responsible for
ACCOUNTING
Multiple Choice
The manager of a hobby store that is part of a chain of stores is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
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Multiple Choice
The manager of a hobby store that is part of a chain of stores is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
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A regional manager of a restaurant chain in charge of finding additional locations for expansion is MOST likely responsible for
ACCOUNTING
Multiple Choice
A regional manager of a restaurant chain in charge of finding additional locations for expansion is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
Click here for the SOLUTION
Multiple Choice
A regional manager of a restaurant chain in charge of finding additional locations for expansion is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
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The regional sales office manager of a national firm is MOST likely responsible for
ACCOUNTING
Multiple Choice
The regional sales office manager of a national firm is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
Click here for the SOLUTION
Multiple Choice
The regional sales office manager of a national firm is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
Click here for the SOLUTION
A maintenance manager is MOST likely responsible for
ACCOUNTING
Multiple Choice
A maintenance manager is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
Click here for the SOLUTION
Multiple Choice
A maintenance manager is MOST likely responsible for
a. a revenue center
b. an investment center
c. a cost center
d. a profit center
Click here for the SOLUTION
Variances between actual and budgeted amounts can be used to
ACCOUNTING
Multiple Choice
Variances between actual and budgeted amounts can be used to
a. alert managers to potential problems and available opportunities
b. inform managers about how well the company has implemented its strategies
c. signal that company strategies are ineffective
d. do all of the above
Click here for the SOLUTION
Multiple Choice
Variances between actual and budgeted amounts can be used to
a. alert managers to potential problems and available opportunities
b. inform managers about how well the company has implemented its strategies
c. signal that company strategies are ineffective
d. do all of the above
Click here for the SOLUTION
ctivity-based budgeting includes all the following steps EXCEPT
ACCOUNTING
Multiple Choice
Activity-based budgeting includes all the following steps EXCEPT
a. determining demands for activities from sales and production targets
b. computing the cost of performing activities
c. determining a separate cost-driver rate for each department
d. describing the budget as costs of activities rather than costs of functions
Click here for the SOLUTION
Multiple Choice
Activity-based budgeting includes all the following steps EXCEPT
a. determining demands for activities from sales and production targets
b. computing the cost of performing activities
c. determining a separate cost-driver rate for each department
d. describing the budget as costs of activities rather than costs of functions
Click here for the SOLUTION
Activity-based budgeting
ACCOUNTING
Multiple Choice
Activity-based budgeting
a. uses one cost driver such as direct labor-hours
b. uses only output-based cost drivers such as units sold
c. focuses on activities necessary to produce and sell products and services
d. classifies costs by functional area within the value chain
Click here for the SOLUTION
Multiple Choice
Activity-based budgeting
a. uses one cost driver such as direct labor-hours
b. uses only output-based cost drivers such as units sold
c. focuses on activities necessary to produce and sell products and services
d. classifies costs by functional area within the value chain
Click here for the SOLUTION
Activity-based budgeting does NOT require
ACCOUNTING
Multiple Choice
Activity-based budgeting does NOT require
a. knowledge of the organization’s activities
b. specialized expertise in financial management and control
c. knowledge about how activities affect costs.
d. the ability to see how the organization’s different activities fit together
Click here for the SOLUTION
Multiple Choice
Activity-based budgeting does NOT require
a. knowledge of the organization’s activities
b. specialized expertise in financial management and control
c. knowledge about how activities affect costs.
d. the ability to see how the organization’s different activities fit together
Click here for the SOLUTION
Activity-based budgeting makes it easier
ACCOUNTING
Multiple Choice
Activity-based budgeting makes it easier
a. to determine a rolling budget
b. to prepare pro forma financial statements
c. to determine how to reduce costs
d. to execute a financial budget
Click here for the SOLUTION
Multiple Choice
Activity-based budgeting makes it easier
a. to determine a rolling budget
b. to prepare pro forma financial statements
c. to determine how to reduce costs
d. to execute a financial budget
Click here for the SOLUTION
Activity-based-costing analysis makes no distinction between
ACCOUNTING
Multiple Choice
Activity-based-costing analysis makes no distinction between
a. direct-materials inventory and work-in-process inventory
b. short-run variable costs and short-run fixed costs
c. parts of the supply chain
d. components of the value chain
Click here for the SOLUTION
Multiple Choice
Activity-based-costing analysis makes no distinction between
a. direct-materials inventory and work-in-process inventory
b. short-run variable costs and short-run fixed costs
c. parts of the supply chain
d. components of the value chain
Click here for the SOLUTION
Friday, May 27, 2011
Activity-based budgeting would separately estimate
ACCOUNTING
Multiple Choice
Activity-based budgeting would separately estimate
a. the cost of overhead for a department
b. a plant-wide cost-driver rate
c. the cost of a setup activity
d. all of the above
Click here for the SOLUTION
Multiple Choice
Activity-based budgeting would separately estimate
a. the cost of overhead for a department
b. a plant-wide cost-driver rate
c. the cost of a setup activity
d. all of the above
Click here for the SOLUTION
The use of activity-based budgeting is growing because of
ACCOUNTING
Multiple Choice
The use of activity-based budgeting is growing because of
a. the increased use of activity-based costing
b. the increased use of kaizen costing
c. increases in work-in-process inventory
d. increases in direct materials inventory
Click here for the SOLUTION
Multiple Choice
The use of activity-based budgeting is growing because of
a. the increased use of activity-based costing
b. the increased use of kaizen costing
c. increases in work-in-process inventory
d. increases in direct materials inventory
Click here for the SOLUTION
What is budgeted gross margin for March 20x5?
ACCOUNTING
Multiple Choice
Dan and Donna Enterprises are using the kaizen approach to budgeting for 20x5. The budgeted income statement for January 20x5 is as follows:
Sales (84,000 units) $500,000
Less: Cost of goods sold 300,000
Gross margin 200,000
Operating expenses (includes $50,000 of fixed costs) 150,000
Operating income $ 50,000
Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted gross margin for March 20x5?
a. $196,020
b. $198,000
c. $204,020
d. $205,970
Click here for the SOLUTION
Multiple Choice
Dan and Donna Enterprises are using the kaizen approach to budgeting for 20x5. The budgeted income statement for January 20x5 is as follows:
Sales (84,000 units) $500,000
Less: Cost of goods sold 300,000
Gross margin 200,000
Operating expenses (includes $50,000 of fixed costs) 150,000
Operating income $ 50,000
Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted gross margin for March 20x5?
a. $196,020
b. $198,000
c. $204,020
d. $205,970
Click here for the SOLUTION
What is budgeted cost of goods sold for March 20x5?
ACCOUNTING
Multiple Choice
Dan and Donna Enterprises are using the kaizen approach to budgeting for 20x5. The budgeted income statement for January 20x5 is as follows:
Sales (84,000 units) $500,000
Less: Cost of goods sold 300,000
Gross margin 200,000
Operating expenses (includes $50,000 of fixed costs) 150,000
Operating income $ 50,000
Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted cost of goods sold for March 20x5?
a. $294,030
b. $294,000
c. $300,000
d. $297,000
Click here for the SOLUTION
Multiple Choice
Dan and Donna Enterprises are using the kaizen approach to budgeting for 20x5. The budgeted income statement for January 20x5 is as follows:
Sales (84,000 units) $500,000
Less: Cost of goods sold 300,000
Gross margin 200,000
Operating expenses (includes $50,000 of fixed costs) 150,000
Operating income $ 50,000
Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
What is budgeted cost of goods sold for March 20x5?
a. $294,030
b. $294,000
c. $300,000
d. $297,000
Click here for the SOLUTION
All of the following are encouraged with kaizen budgeting EXCEPT
ACCOUNTING
Multiple Choice
All of the following are encouraged with kaizen budgeting EXCEPT
a. better interactions with suppliers
b. large discontinuous improvements
c. cost reductions during manufacturing
d. systematic monthly cost reductions
Click here for the SOLUTION
Multiple Choice
All of the following are encouraged with kaizen budgeting EXCEPT
a. better interactions with suppliers
b. large discontinuous improvements
c. cost reductions during manufacturing
d. systematic monthly cost reductions
Click here for the SOLUTION
Kaizen refers to incorporating cost reductions
ACCOUNTING
Multiple Choice
Kaizen refers to incorporating cost reductions
a. in each successive budgeting period
b. in each successive sales forecast
c. in all customer service centers
d. in all of the above
Click here for the SOLUTION
Multiple Choice
Kaizen refers to incorporating cost reductions
a. in each successive budgeting period
b. in each successive sales forecast
c. in all customer service centers
d. in all of the above
Click here for the SOLUTION
The Japanese use the term kaizen when referring to
ACCOUNTING
Multiple Choice
The Japanese use the term kaizen when referring to
a. scarce resources
b. pro forma financial statements
c. continuous improvement
d. the sales forecast
Click here for the SOLUTION
Multiple Choice
The Japanese use the term kaizen when referring to
a. scarce resources
b. pro forma financial statements
c. continuous improvement
d. the sales forecast
Click here for the SOLUTION
Should Katie increase the selling price in 20x5?
ACCOUNTING
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
Should Katie increase the selling price in 20x5?
a. Yes, because sales revenue is increased for 20x5
b. Yes, because operating income is increased for 20x5
c. No, because sales volume decreases for 20x5
d. No, because gross margin decreases for 20x5
Click here for the SOLUTION
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
Should Katie increase the selling price in 20x5?
a. Yes, because sales revenue is increased for 20x5
b. Yes, because operating income is increased for 20x5
c. No, because sales volume decreases for 20x5
d. No, because gross margin decreases for 20x5
Click here for the SOLUTION
2. What is budgeted cost of goods sold for 20x5?
ACCOUNTING
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 20x5?
a. $189,000
b. $196,560
c. $218,400
d. $210,000
Click here for the SOLUTION
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 20x5?
a. $189,000
b. $196,560
c. $218,400
d. $210,000
Click here for the SOLUTION
2. What is budgeted sales for 20x5?
ACCOUNTING
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 20x5?
a. $582,400
b. $524,160
c. $504,000
d. $560,000
Click here for the SOLUTION
Multiple Choice
Katie Enterprises reports the year-end information from 20x4 as follows:
Sales (70,000 units) $560,000
Cost of goods sold 210,000
Gross margin 350,000
Operating expenses 200,000
Operating income $ 150,000
Katie is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 20x5?
a. $582,400
b. $524,160
c. $504,000
d. $560,000
Click here for the SOLUTION
Should Ossmann increase the selling price in 20x5?
ACCOUNTING
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
Should Ossmann increase the selling price in 20x5?
a. Yes, because operating income is increased for 20x5
b. Yes, because sales revenue is increased for 20x5
c. No, because sales volume decreases for 20x5
d. No, because gross margin decreases for 20x5
Click here for the SOLUTION
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
Should Ossmann increase the selling price in 20x5?
a. Yes, because operating income is increased for 20x5
b. Yes, because sales revenue is increased for 20x5
c. No, because sales volume decreases for 20x5
d. No, because gross margin decreases for 20x5
Click here for the SOLUTION
What is budgeted cost of goods sold for 20x5?
ACCOUNTING
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 20x5?
a. $311,040
b. $288,000
c. $345,600
d. $320,000
Click here for the SOLUTION
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 20x5?
a. $311,040
b. $288,000
c. $345,600
d. $320,000
Click here for the SOLUTION
What is budgeted sales for 20x5?
ACCOUNTING
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 20x5?
a. $518,400
b. $533,333
c. $466,560
d. $432,000
Click here for the SOLUTION
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 20x5?
a. $518,400
b. $533,333
c. $466,560
d. $432,000
Click here for the SOLUTION
When performing a sensitivity analysis, if the selling price per unit is increased, then the
ACCOUNTING
Multiple Choice
When performing a sensitivity analysis, if the selling price per unit is increased, then the
a. per unit fixed administrative costs will increase
b. per unit direct materials purchase price will increase
c. total volume of sales will increase
d. total costs for sales commissions and other nonmanufacturing variable costs will increase
Click here for the SOLUTION
Multiple Choice
When performing a sensitivity analysis, if the selling price per unit is increased, then the
a. per unit fixed administrative costs will increase
b. per unit direct materials purchase price will increase
c. total volume of sales will increase
d. total costs for sales commissions and other nonmanufacturing variable costs will increase
Click here for the SOLUTION
__________ utilizes a “what-if” technique that examines how results will change if the originally predicted data changes
ACCOUNTING
Multiple Choice
__________ utilizes a “what-if” technique that examines how results will change if the originally predicted data changes
a. A sales forecast
b. A sensitivity analysis
c. A pro forma financial statement
d. The statement of cash flows
Click here for the SOLUTION
Multiple Choice
__________ utilizes a “what-if” technique that examines how results will change if the originally predicted data changes
a. A sales forecast
b. A sensitivity analysis
c. A pro forma financial statement
d. The statement of cash flows
Click here for the SOLUTION
Financial planning software packages assist management with
ACCOUNTING
Multiple Choice
Financial planning software packages assist management with
a. assigning responsibility to various levels of management
b. identifying the target customer
c. sensitivity analysis in their planning and budgeting activities
d. achieving greater commitment from lower management
Click here for the SOLUTION
Multiple Choice
Financial planning software packages assist management with
a. assigning responsibility to various levels of management
b. identifying the target customer
c. sensitivity analysis in their planning and budgeting activities
d. achieving greater commitment from lower management
Click here for the SOLUTION
Purchases budgeted for February total
ACCOUNTING
Multiple Choice
Wallace Company provides the following data for next year:
Month Budgeted Sales
January $120,000
February 108,000
March 132,000
April 144,000
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
Purchases budgeted for February total
a. $69,120
b. $60,480
c. $115,200
d. $64,800
Click here for the SOLUTION
Multiple Choice
Wallace Company provides the following data for next year:
Month Budgeted Sales
January $120,000
February 108,000
March 132,000
April 144,000
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
Purchases budgeted for February total
a. $69,120
b. $60,480
c. $115,200
d. $64,800
Click here for the SOLUTION
Purchases budgeted for January total
ACCOUNTING
Multiple Choice
Wallace Company provides the following data for next year:
Month Budgeted Sales
January $120,000
February 108,000
March 132,000
April 144,000
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
Purchases budgeted for January total
a. $130,800
b. $72,000
c. $69,840
d. $74,16
Click here for the SOLUTION
Multiple Choice
Wallace Company provides the following data for next year:
Month Budgeted Sales
January $120,000
February 108,000
March 132,000
April 144,000
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
Purchases budgeted for January total
a. $130,800
b. $72,000
c. $69,840
d. $74,16
Click here for the SOLUTION
How many mattresses need to be produced in the first quarter (January, February, March) of 20x4?
ACCOUNTING
Multiple Choice
Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x4:
Month Sales
January 5,000
February 7,000
March 6,500
April 8,000
Finished goods inventory at the end of December is 1,500 units. Target ending finished goods inventory is 30% of next month's sales.
How many mattresses need to be produced in the first quarter (January, February, March) of 20x4?
a. 18,500 mattresses
b. 19,400 mattresses
c. 20,900 mattresses
d. 22,400 mattresses
Click here for the SOLUTION
Multiple Choice
Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x4:
Month Sales
January 5,000
February 7,000
March 6,500
April 8,000
Finished goods inventory at the end of December is 1,500 units. Target ending finished goods inventory is 30% of next month's sales.
How many mattresses need to be produced in the first quarter (January, February, March) of 20x4?
a. 18,500 mattresses
b. 19,400 mattresses
c. 20,900 mattresses
d. 22,400 mattresses
Click here for the SOLUTION
Thursday, May 26, 2011
How many mattresses need to be produced in January 20x4?
ACCOUNTING
Multiple Choice
Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x4:
Month Sales
January 5,000
February 7,000
March 6,500
April 8,000
Finished goods inventory at the end of December is 1,500 units. Target ending finished goods inventory is 30% of next month's sales.
How many mattresses need to be produced in January 20x4?
a. 4,400 mattresses
b. 5,600 mattresses
c. 6,500 mattresses
d. 7,100 mattresses
Click here for the SOLUTION
Multiple Choice
Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x4:
Month Sales
January 5,000
February 7,000
March 6,500
April 8,000
Finished goods inventory at the end of December is 1,500 units. Target ending finished goods inventory is 30% of next month's sales.
How many mattresses need to be produced in January 20x4?
a. 4,400 mattresses
b. 5,600 mattresses
c. 6,500 mattresses
d. 7,100 mattresses
Click here for the SOLUTION
What is the amount budgeted for cost of goods sold in 20x4?
ACCOUNTING
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for cost of goods sold in 20x4?
a. $1,156,000
b. $986,000
c. $1,020,000
d. $2,400,000
Click here for the SOLUTION
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for cost of goods sold in 20x4?
a. $1,156,000
b. $986,000
c. $1,020,000
d. $2,400,000
Click here for the SOLUTION
What is the amount budgeted for cost of goods manufactured in 20x4?
ACCOUNTING
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for cost of goods manufactured in 20x4?
a. $1,020,000
b. $986,000
c. $1,156,000
d. $1,190,000
Click here for the SOLUTION
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for cost of goods manufactured in 20x4?
a. $1,020,000
b. $986,000
c. $1,156,000
d. $1,190,000
Click here for the SOLUTION
What is the amount budgeted for direct material purchases in 20x4?
ACCOUNTING
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for direct material purchases in 20x4?
a. $520,000
b. $600,000
c. $580,000
d. $760,000
Click here for the SOLUTION
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
What is the amount budgeted for direct material purchases in 20x4?
a. $520,000
b. $600,000
c. $580,000
d. $760,000
Click here for the SOLUTION
How many uniforms need to be produced in 20x4?
ACCOUNTING
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
How many uniforms need to be produced in 20x4?
a. 26,000 uniforms
b. 34,000 uniforms
c. 30,000 uniforms
d. 29,000 uniforms
Click here for the SOLUTION
Multiple Choice
Konrade, Inc., expects to manufacture and sell 30,000 athletic uniforms for $80 each in 20x4. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 12,000 units 9,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 6,000 units 5,000 units
How many uniforms need to be produced in 20x4?
a. 26,000 uniforms
b. 34,000 uniforms
c. 30,000 uniforms
d. 29,000 uniforms
Click here for the SOLUTION
For January, budgeted net income is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, budgeted net income is
a. $42,000
b. $60,000
c. $50,000
d. $52,000
Click here for the SOLUTION
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, budgeted net income is
a. $42,000
b. $60,000
c. $50,000
d. $52,000
Click here for the SOLUTION
For January, the amount budgeted for the nonmanufacturing costs budget is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, the amount budgeted for the nonmanufacturing costs budget is
a. $78,000
b. $10,000
c. $168,000
d. $18,000
Click here for the SOLUTION
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, the amount budgeted for the nonmanufacturing costs budget is
a. $78,000
b. $10,000
c. $168,000
d. $18,000
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For January, budgeted gross margin is
ACCOUNTING
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, budgeted gross margin is
a. $100,000
b. $140,000
c. $60,000
d. $50,000
Click here for the SOLUTION
Multiple Choice
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
For January, budgeted gross margin is
a. $100,000
b. $140,000
c. $60,000
d. $50,000
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What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
a. $0; $96,000; $19,200
b. $39,000; $78,000; $15,600
c. $80,000; $40,000; $16,000
d. $41,000; $82,000; $16,400
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
a. $0; $96,000; $19,200
b. $39,000; $78,000; $15,600
c. $80,000; $40,000; $16,000
d. $41,000; $82,000; $16,400
Click here for the SOLUTION
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
a. $139,400
b. $136,000
c. $132,600
d. $153,000
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
a. $139,400
b. $136,000
c. $132,600
d. $153,000
Click here for the SOLUTION
Wednesday, May 25, 2011
How many ceramic vases need to be produced in 20x4?
ACCOUNTING
Multiple Choice
Daniel, Inc. expects to manufacture and sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 1,000 units 1,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 400 units 500 units
How many ceramic vases need to be produced in 20x4?
a. 5,900 vases
b. 6,100 vases
c. 7,000 vases
d. 6,000 vases
Click here for the SOLUTION
Multiple Choice
Daniel, Inc. expects to manufacture and sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 1,000 units 1,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 400 units 500 units
How many ceramic vases need to be produced in 20x4?
a. 5,900 vases
b. 6,100 vases
c. 7,000 vases
d. 6,000 vases
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2. On the 20x4 budgeted income statement, what amount will be reported for sales?
ACCOUNTING
Multiple Choice
Daniel, Inc. expects to manufacture and sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 1,000 units 1,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 400 units 500 units
On the 20x4 budgeted income statement, what amount will be reported for sales?
a. $122,000
b. $118,000
c. $140,000
d. $120,000
Click here for the SOLUTION
Multiple Choice
Daniel, Inc. expects to manufacture and sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 1,000 units 1,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 400 units 500 units
On the 20x4 budgeted income statement, what amount will be reported for sales?
a. $122,000
b. $118,000
c. $140,000
d. $120,000
Click here for the SOLUTION
What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
a. $0; $96,000; $19,200
b. $39,000; $78,000; $15,600
c. $80,000; $40,000; $16,000
d. $41,000; $82,000; $16,400
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
a. $0; $96,000; $19,200
b. $39,000; $78,000; $15,600
c. $80,000; $40,000; $16,000
d. $41,000; $82,000; $16,400
Click here for the SOLUTION
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
a. $139,400
b. $136,000
c. $132,600
d. $153,000
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for cost of goods sold?
a. $139,400
b. $136,000
c. $132,600
d. $153,000
Click here for the SOLUTION
How many pool cues need to be produced in 20x4?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
How many pool cues need to be produced in 20x4?
a. 22,500 cues
b. 22,000 cues
c. 20,500 cues
d. 19,500 cues
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
How many pool cues need to be produced in 20x4?
a. 22,500 cues
b. 22,000 cues
c. 20,500 cues
d. 19,500 cues
Click here for the SOLUTION
On the 20x4 budgeted income statement, what amount will be reported for sales?
ACCOUNTING
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for sales?
a. $246,000
b. $240,000
c. $312,000
d. $318,000
Click here for the SOLUTION
Multiple Choice
Marguerite, Inc., expects to manufacture and sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 20x4:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units
On the 20x4 budgeted income statement, what amount will be reported for sales?
a. $246,000
b. $240,000
c. $312,000
d. $318,000
Click here for the SOLUTION
Wilgers Company has budgeted sales volume of 30,000 units and budgeted production of 27,000 units
ACCOUNTING
Multiple Choice
Wilgers Company has budgeted sales volume of 30,000 units and budgeted production of 27,000 units. 5,000 units are in beginning finished goods inventory. How many units are targeted for ending finished goods inventory?
a. 5,000 units
b. 8,000 units
c. 3,000 units
d. 2,000 units
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Multiple Choice
Wilgers Company has budgeted sales volume of 30,000 units and budgeted production of 27,000 units. 5,000 units are in beginning finished goods inventory. How many units are targeted for ending finished goods inventory?
a. 5,000 units
b. 8,000 units
c. 3,000 units
d. 2,000 units
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For next year, Galliart, Inc., has budgeted sales of 60,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods
ACCOUNTING
Multiple Choice
For next year, Galliart, Inc., has budgeted sales of 60,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 1,800 units. All other inventories are zero. How many units should be produced next year?
a. 58,800 units
b. 60,000 units
c. 61,200 units
d. 64,800 units
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Multiple Choice
For next year, Galliart, Inc., has budgeted sales of 60,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 1,800 units. All other inventories are zero. How many units should be produced next year?
a. 58,800 units
b. 60,000 units
c. 61,200 units
d. 64,800 units
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DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory
ACCOUNTING
Multiple Choice
DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 900 units. How many units should be produced next year?
a. 21,900 units
b. 20,100 units
c. 15,900 units
d. 18,000 units
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Multiple Choice
DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 900 units. How many units should be produced next year?
a. 21,900 units
b. 20,100 units
c. 15,900 units
d. 18,000 units
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Schultz Company expects to manufacture and sell 30,000 baskets in 20x4 for $6 each
ACCOUNTING
Multiple Choice
Schultz Company expects to manufacture and sell 30,000 baskets in 20x4 for $6 each. There are 3,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 20x4 budgeted income statement?
a. $174,000
b. $180,000
c. $186,000
d. $204,000
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Multiple Choice
Schultz Company expects to manufacture and sell 30,000 baskets in 20x4 for $6 each. There are 3,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 20x4 budgeted income statement?
a. $174,000
b. $180,000
c. $186,000
d. $204,000
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Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT
ACCOUNTING
Multiple Choice
Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT
a. fixed items such as depreciation of manufacturing machinery
b. variable items such as plant supplies
c. indirect labor such as the salary of the plant supervisor
d. direct labor and direct materials
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Multiple Choice
Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT
a. fixed items such as depreciation of manufacturing machinery
b. variable items such as plant supplies
c. indirect labor such as the salary of the plant supervisor
d. direct labor and direct materials
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The manufacturing overhead costs budget includes budgeted amounts for
ACCOUNTING
Multiple Choice
The manufacturing overhead costs budget includes budgeted amounts for
a. direct materials
b. direct manufacturing labor
c. indirect manufacturing labor
d. all of the above
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Multiple Choice
The manufacturing overhead costs budget includes budgeted amounts for
a. direct materials
b. direct manufacturing labor
c. indirect manufacturing labor
d. all of the above
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Individual budgeted amounts included in the manufacturing overhead costs budget are based on input from
ACCOUNTING
Multiple Choice
Individual budgeted amounts included in the manufacturing overhead costs budget are based on input from
a. operating personnel
b. costs incurred in prior years
c. cost changes expected in the future
d. all of the above
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Multiple Choice
Individual budgeted amounts included in the manufacturing overhead costs budget are based on input from
a. operating personnel
b. costs incurred in prior years
c. cost changes expected in the future
d. all of the above
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Direct material purchases equal
ACCOUNTING
Multiple Choice
Direct material purchases equal
a. production needs
b. production needs plus target ending inventories
c. production needs plus beginning inventories
d. production needs plus target ending inventories less beginning inventories
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Multiple Choice
Direct material purchases equal
a. production needs
b. production needs plus target ending inventories
c. production needs plus beginning inventories
d. production needs plus target ending inventories less beginning inventories
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The direct materials usage budget is based on
ACCOUNTING
Multiple Choice
The direct materials usage budget is based on
a. the units to be produced during a period
b. budgeted sales dollars
c. the predetermined factory overhead rate
d. the amount of labor-hours worked
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Multiple Choice
The direct materials usage budget is based on
a. the units to be produced during a period
b. budgeted sales dollars
c. the predetermined factory overhead rate
d. the amount of labor-hours worked
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Budgeted production depends on
ACCOUNTING
Multiple Choice
Budgeted production depends on
a. the direct materials usage budget and direct material purchases budget
b. the direct manufacturing labor budget
c. budgeted sales and expected changes in inventory levels
d. the manufacturing overhead costs budget
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Multiple Choice
Budgeted production depends on
a. the direct materials usage budget and direct material purchases budget
b. the direct manufacturing labor budget
c. budgeted sales and expected changes in inventory levels
d. the manufacturing overhead costs budget
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Production is primarily based on
ACCOUNTING
Multiple Choice
Production is primarily based on
a. projected inventory levels
b. the revenues budget
c. the administrative costs budget
d. the capital expenditures budget
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Multiple Choice
Production is primarily based on
a. projected inventory levels
b. the revenues budget
c. the administrative costs budget
d. the capital expenditures budget
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The number of units in the sales budget and the production budget may differ because of a change in
ACCOUNTING
Multiple Choice
The number of units in the sales budget and the production budget may differ because of a change in
a. finished goods inventory levels
b. overhead charges
c. direct material inventory levels
d. sales returns and allowances
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Multiple Choice
The number of units in the sales budget and the production budget may differ because of a change in
a. finished goods inventory levels
b. overhead charges
c. direct material inventory levels
d. sales returns and allowances
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The revenues budget identifies
ACCOUNTING
Multiple Choice
The revenues budget identifies
a. expected cash flows for each product
b. actual sales from last year for each product
c. the expected level of sales for the company
d. the variance of sales from actual for each product
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Multiple Choice
The revenues budget identifies
a. expected cash flows for each product
b. actual sales from last year for each product
c. the expected level of sales for the company
d. the variance of sales from actual for each product
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A sales forecast is
ACCOUNTING
Multiple Choice
A sales forecast is
a. often the outcome of elaborate information gathering and discussions among sales managers
b. developed primarily to prepare next year’s marketing campaign
c. solely based on sales of the previous year
d. a summary of product costs that influence pricing decisions
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Multiple Choice
A sales forecast is
a. often the outcome of elaborate information gathering and discussions among sales managers
b. developed primarily to prepare next year’s marketing campaign
c. solely based on sales of the previous year
d. a summary of product costs that influence pricing decisions
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The sales forecast is influenced by
ACCOUNTING
Multiple Choice
The sales forecast is influenced by
a. advertising and sales promotions
b. competition
c. general economic conditions
d. all of the above
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Multiple Choice
The sales forecast is influenced by
a. advertising and sales promotions
b. competition
c. general economic conditions
d. all of the above
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The sales forecast should be PRIMARILY based on
ACCOUNTING
Multiple Choice
The sales forecast should be PRIMARILY based on
a. statistical analysis
b. input from sales managers and sales representatives
c. production capacity
d. input from the board of directors
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Multiple Choice
The sales forecast should be PRIMARILY based on
a. statistical analysis
b. input from sales managers and sales representatives
c. production capacity
d. input from the board of directors
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__________ is the usual starting point for budgeting
ACCOUNTING
Multiple Choice
__________ is the usual starting point for budgeting
a. The revenues budget
b. Net income
c. The production budget
d. The cash budget
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Multiple Choice
__________ is the usual starting point for budgeting
a. The revenues budget
b. Net income
c. The production budget
d. The cash budget
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