Exam 19: Introduction to Managerial Accounting and the Master Budget

The following information was obtained from Sizzler Company: • Advertising costs: $7 900 • Indirect labour: $9 000 • Direct labour: $31 000 • Indirect materials: $7 200 • Direct materials: $47 000 • Factory electricity and gas: $3 000 • Factory repair and maintenance: $700 • Factory cleaning costs: $1 900 • Manufacturing equipment depreciation: $1 600 • Delivery vehicle depreciation: $790 • Administrative wages and salaries: $19 000 How much were Sizzler's period costs?

Argyle Company forecasts Sales of $50 000 in January, $60 000 in February, $70 000 in March, and $75 000 in April. The inventory balance at 1 January is $12 000. Cost of sales is budgeted at 40% of sales revenue. Argyle wishes to have inventory levels at the end of each month equal to 60% of the cost of sales for the following month, plus a "safety cushion" of $1 000. How much should be budgeted for inventory purchases in March?

Which of the following statements is TRUE about the financial budget?

Manufacturing businesses have inventory accounts, but service and retailing businesses do not.

Manufacturing overhead includes which of the following?

Which of the following describes the inventory, purchases, and cost of sales budget?

The wages and benefits of the sales staff are inventoriable product costs.

Which of the following most accurately describes the term cost- benefit analysis?

Which of the following is NOT a part of manufacturing overhead?

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet. To provide the balance for Retained earnings, which document should be used?

Repair and maintenance costs for factory equipment are inventoriable product costs.

Management accounting often requires forward- looking data because of the futuristic nature of many business decisions.

Financial accounting is focused on which of the following objectives?

Increased global competition has resulted in many companies moving their operations to other countries to be closer to new markets.

Which of the following costs do NOT go directly into the work in process account?

The wages and benefits of the factory manager are inventoriable product costs.

Caskill Company forecasts $40 000 of sales in January, $38 000 in February, $30 000 in March, and $32 000 in April. Cost of sales is budgeted at 75% of sales. Caskill should have inventory on hand at the end of each month equal to $5 000 plus 20% of the following month's cost of sales. How much are budgeted purchases for March?

Purchases for May were $100 000, while expected purchases for June and July are $110 000 and $125 000, respectively. All purchases are paid 25% in the month of purchase and 75% the following month. At what amount are June payments for purchases budgeted?

Which of the following costs would appear on the income statements for both a retailer and a manufacturer?

Management is accountable to its suppliers and vendors in which of the following ways?