Exam 19: Introduction to Managerial Accounting and the Master Budget

Which of the following applies to goods that are produced by a manufacturing company and ready to sell?

Argyle Company is preparing the operating budget for the first quarter of 2013. They forecast sales of $50 000 in January, $60 000 in February, and $70 000 in March. Variable and fixed expenses are as follows: Variable: Power cost (40% of Sales) Miscellaneous expenses (5% of Sales) Fixed: Salary expense: $8 000 per month Rent expense: $5 000 per month Depreciation expense: $1 200 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1 000 per month How much is the total operating expense for February?

Management accounting is influenced significantly by the Australian Accounting Standards.

June sales were $40 000 while projected sales for July and August were $50 000 and $60 000, respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?

A budgeted income statement is based on estimated amounts and not actual amounts.

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 February?

When a company is preparing a budgeted cash flow statement and they wish to calculate the collections from customers, they should refer to which of the following?

When the different business units at a company use differently structured reporting formats for their business unit budgets, it is more difficult for the company to consolidate the business unit data into a companywide budget.

Which of the following statements about managerial accounting is CORRECT?

The financial budget includes all of the following EXCEPT the:

Budgeting is a technique that is used to plan for future cash inflows and outflows.

In order to prepare a budgeted income statement, several other budgets need to be prepared first. Which of the following is NOT one of the budgets needed to prepare the budgeted income statement?

Which of the following statements about financial accounting is CORRECT?

Argyle Company is preparing the operating budget for the first quarter of 2013. They forecast sales of $50 000 in January, $60 000 in February, and $70 000 in March. Variable and fixed expenses are as follows: Variable: Power cost (40% of Sales) Miscellaneous expenses (5% of Sales) Fixed: Salary expense: $8 000 per month Rent expense: $5 000 per month Depreciation expense: $1 200 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1 000 per month How much is the total operating expense for March?

Factory rent, taxes and insurance are inventoriable product costs.

The production budget must be prepared before any other component of the operating budget.

In preparing an operating budget, the sales budget is prepared first. Which of the following is the last component of the operating budget?

When companies use an enterprise resource planning system to roll up or consolidate the budgets of the individual business units, it is more difficult for managers to conduct sensitivity analysis on their own budget data.

Repair and maintenance costs of vehicles used to deliver products to the customers are included in manufacturing overhead.

Sales commissions are included in manufacturing overhead.