Exam 6: Master Budget and Responsibility Accounting

Rolling budgets are constantly updated to reflect the latest cost and revenue information.

Perry Company has provided the following information: In addition,the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

The cost of goods sold budget is calculated by deducting beginning finished-goods from cost of goods available for sale.

Tom Magic Company manufactures various kinds of toys for different age groups.The company's flagship product is Rx.The company currently requires 8.50 labor hours to manufacture per unit of Rx.The company believes that because of numerous small improvements in the process,it will require 0.10 labor-hours less and hence will only 8.40 labor-hours in the next quarter.It will require 8.35 and 8.25 labor-hours in third and fourth quarter.The company has adopted ________.

Budgeted production equals ________.

Operating plans are generally expressed through long-run budgets.

Violet Sales Corp,reports the year-end information from 2019 as follows: Violet is developing the 2019 budget.In 2019 the company would like to increase selling prices by 3.5%,and as a result expects a decrease in sales volume of 14%.All other operating expenses are expected to remain constant.Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold for 2019?

Furniture,Inc. ,estimates the following number of mattress sales for the first four months of 2019: Finished goods inventory at the end of December is 7,000 units.Target ending finished goods inventory is 20% of the next month's sales. How many mattresses need to be produced in January 2019?

The following information pertains to Monroe Company: What is the ending cash balance for March?

Activity-based-costing analysis makes no distinction between ________.

Discuss the importance of the sales forecast and items that influence its accuracy.

Activity-based budgeting would permit the use of multiple drivers and multiple cost pools in the budgeting process.

In the cash budget,the cash excess (surplus)or deficiency (deficit)is calculated using which of the following formulas?

Budgetary slack results because management sets challenging but achievable levels of expected performance.

Most ethical issues related to budgetary decisions are clear cut because at no point should pressure for performance influence budgetary decisions.

Tiger Pride produces two product lines: T-shirts and Sweatshirts.Product profitability is analyzed as follows: What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.50 per unit and direct labor costs of Sweatshirts increase to $14.00 per unit?

Activity-based budgeting,with its focus on cost drivers and the cost of activities,provides better decision-making information than budgeting based solely on output-based cost drivers (units produced,units sold,or revenues).

Furniture,Inc. ,estimates the following number of mattress sales for the first four months of 2019: Finished goods inventory at the end of December is 7,100 units.Target ending finished goods inventory is 20% of the next month's sales. How many mattresses should be produced in the first quarter of 2019?

Rolling budgets help in reducing budgetary slack.

Christy Enterprises reports the year-end information from 2018 as follows: Christy is developing the 2019 budget.In 2019 the company would like to increase selling prices by 10%,and as a result expects a decrease in sales volume of 5%.Cost of goods sold as a percentage of sales is expected to increase to 62%.Other than depreciation,all operating costs are variable. Required: Prepare a budgeted income statement for 2019.