Exam 6: Planning, The Balanced Scorecard, and Budgeting

The Ellis Company is preparing its sales and production budget for 2011.Ellis sells its product for $37 and thinks it sales in January 2011 will be 230,000 units and this will increase by 10% in February and March and then by 20% for April and May.Ellis has a beginning inventory of 23,000 units and wants to reduce its ending inventory to 1% of the next month's units sales.Create a sales budget (in both units and dollars)and the production budget for the first quarter of the year.

Indirect labor would most likely be shown on the:

Which of the following is part of the revenue planning process?

Lyle Industries sold 80,000 ice chests at $30 each during April of 2010.Unit sales are projected to increase 5% in May and June while the selling price will be increased by $2.00 for May and another $1 in June.The estimated sales revenue for June of 2010 is:

Lichti Industries sold 50,000 ice chests at $20 each during April of 2010.Unit sales are projected to increase 10% in May and June while the selling price will be increased by $1.00 for May and another $1 in June.The estimated sales revenue for June of 2010 is:

The Piante Company has an accounts receivable balance of $256,000 at the beginning of the year.Credit sales for the year are projected at $923,000.Management estimates that 98% of the beginning accounts receivable plus 82% of the credit sales will be collected during the period.The projected balance of accounts receivable at year-end equal to:

Budgetary slack is created when:

Use the following to answer questions Hepburn Corporation's sales price is $30 per unit. Unit sales information is presented below: Management estimates that 2% of credit sales are uncollectible. Of the remaining credit sales, 30 percent are collected in the month of sale and the remainder in the following month. The March 31 ending inventory is 5,500 units, and Hepburn wants to have 10% of the next month's sales in ending finished goods inventory. -Hepburn applies overhead at the rate of $10 for each machine hour.Each unit of finished goods requires 0.5 machine hours.What amount should Hepburn budget for overhead for April?

Xenon Corporation budgeted sales of its product during the next fiscal year at 200,000 units,with a selling price of $20 per unit.Sales commissions are 6% of sales and other variable selling and administrative costs are 15% of sales.Fixed selling and administrative costs are estimated at $630,000.The budgeted selling and administrative costs for the next fiscal year are:

Klocke Corporation's sales for January,2010,were $1,350,000.Klocke projects a 10% increase in monthly sales every 6 months.The sales for December,2010,are estimated at:

An advantage of a participatory budget is:

The balanced scorecard approach is successful in reducing budgetary slack because:

Describe the relationship between the Production Budget used in Conversion Process Planning and the Direct Materials Purchase Budget and the Direct Labor and Overhead Budget used in the Expenditure Planning Process.

Which of the following is not one of the benefits of budgeting?

Clyde,Inc.sells two products,X and Y.Clyde sells twice as much X as Y,and projects the sale of 57,000 units of X during the coming year.Product Y sells for three times as much as product X,which sells for $2.75 per unit.The estimated sales revenue for Clyde for the coming year is:

The Hoxie Corporation budgeted production for the first three months of 2011 is listed below.Each unit produced requires 3 pounds of direct material that cost $9 per pound.Hoxie wants to have 10% on next month's production in ending inventory each month.Hoxie receives a 3% discount on all purchases paid made during the month and pays 90% of its materials bill during the month. Accounts Payable Balance $210,000 on January 1,2011 Raw materials inventory 28,500 pounds at $9 $256,500 Required: (A.)How many pounds and what is the price of the direct material Hoxie plans to purchase in February? (B.)How much cash does Hoxie plan to pay for materials in February? (C.)How much will the ending balance of accounts payable be February?

Farmer Corporation budgeted sales of its product during the next fiscal year at 225,000 units,with a selling price of $17.50 per unit.Sales commissions are 6% of sales and other variable selling and administrative costs are 15% of sales.Fixed selling and administrative costs are estimated at $430,000.The budgeted selling and administrative costs for the next fiscal year are:

Sales commissions would most likely be shown in the:

Use the following to answer questions Minuteman Company's sales were budgeted for the first six months of its fiscal year as follows: All sales are on credit and management estimates that 55% will be collected in the month following the sale, with the remaining 45% collected the second month following the sale. -Cash collections during August are estimated at: