Exam 10: Static and Flexible Budgets

When managers use Kaizen budgeting, which of the following is (are) explicitly embedded in the budget? I. Cost reduction goals II. Quality improvement goals III. Changes in activity cost drivers

Use the following information for the next 3 questions. (CMA) Table Top produces tables sold to discount stores. The table tops are manufactured in the U.S. by Table Top, but the table legs are manufactured in a plant in Nogales, Mexico. The assembly department attaches the four purchased table legs to the table top. It takes 20 minutes of labor to assemble a table. The company follows a policy of producing enough tables to insure that 40% of next month's sales are in the finished goods inventory. Table Top also purchases sufficient raw materials to insure that raw materials inventory is 60% of the following month's scheduled production. Table Top's sales budget in units for the next quarter is as follows: -Assume that Table Top will produce 1,800 units in the month of September 20x5. How many employees will be required for the assembly department? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40 hour work week and a 4 week month.)

Use the following information for the next 5 questions. Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter: A finished unit requires one unit of material A and two units of material B. There should be enough material on hand at the end of each quarter to meet 20% of the next quarter's production needs. There are no work-in-process inventories. -What is ending finished goods inventory for quarter 2?

Use the following information for the next 5 questions. At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from that budget, along with actual results for 20x2, are presented below: -Which items in the table have favorable variances?

Use the following information for the next 2 questions. Ray Company's projected sales budget for the next four months is as follows: Beginning inventory for the year is 27,000 units. Ending inventory for each month should be 30% of the next month's sales. -How many units need to be available for sale in February?

Use the following information for the next 5 questions. Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter: A finished unit requires one unit of material A and two units of material B. There should be enough material on hand at the end of each quarter to meet 20% of the next quarter's production needs. There are no work-in-process inventories. -What is the ending inventory for material A for quarter 2?

Cash disbursements in July for purchases are expected to be

When an organization implements activity-based budgeting, managers must identify activities for

If actual activities do not follow plans, a variance is likely to result.

Budgets are used to I. Forecast future performance II. Compare to actual operations III. Communicate an organization's strategy and targets

Which of the following is prepared periodically, reflecting planning changes for a specific future time frame?

Use the following information for the next 3 questions. ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below: -If ATR's actual volume for the third quarter of 20x2 was 15% above its expected volume I. Actual total costs will be 15% greater than budgeted total costs II. Actual cost per unit will be 15% greater than budgeted cost per unit

Use the following information for the next 2 questions. Bynsel, Inc., a retailer, projects the following purchases and sales of its product for the next 4 months: Each unit costs $100, and all purchases are on account. Two-thirds of purchases are paid in the month of the purchase and one-third are paid in the month following the purchase. Bynsel gets a 3% discount whenever it pays in the month of the purchase. The selling price per unit is $200. Sales are 60% cash and 40% on customer credit cards. The bank charges Bynsel a 5% fee for each credit card transaction and transfers the funds to Bynsel's checking account on the same day as the credit card sale. -What are cash receipts for the third month?

One objective of budgeting is motivating managers to

Use the following information for the next 4 questions. Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: -Purchases for the month of May are expected to be

Activity based budgeting

Expected ending inventory volumes and costs need to be calculated to forecast

How much material A must be purchased in quarter 2?

How much material B must be purchased in quarter 1?

Which of the following is not required to develop a budgeted income statement?