Exam 8: Budgeting for Planning and Control

Goal congruence means

Figure 8-6 The records of Morgantown, Inc. show the following forecasted sales: Collection pattern: 60 percent in month of sale 40 percent in month following the sale Accounts receivable as of August 31 $70,000 Finished goods inventory as of August 31 8,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month's sales. -Refer to Figure 8-6. How much is Accounts Receivable as of October 31?

The quantitative expression of a plan stated in either physical or financial terms or both is called a:

The budgeted income statement depends partly on information in the budgets in the master budget.

The following is responsible for directing and coordinating the overall budgeting process:

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance $11,000 + $0.11 per machine hour Machining $25,000 + $0.50 per machine hour Setups $50 per batch Purchasing $200 + $45 per purchase order Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders What is the budgeted cost per decal? (Round to three decimal places.)

When budgets are used for control,

Figure 8-3 Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months. -Olga's Company has a sales budget for next month of $150,000. Cost of goods sold is expected to be 40 percent of sales. All goods are purchased in the month used and paid for in the month following purchase. The beginning inventory of merchandise is $5,000, and an ending inventory of $6,000 is desired. Beginning accounts payable is $38,000. The cost of goods sold for next month is expected to be

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was $4,150 and the budgeted cost per unit is $10?

A static budget is one developed for a single level of activity.

Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Laramie had the following budgeted data: Budgeted variable costs per unit: Budgeted fixed overhead for 2016: What are the total budgeted costs for 5,000 units?

Discuss the features of an ideal budgetary process.

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance $11,000 + $0.11 per machine hour Machining $25,000 + $0.50 per machine hour Setups $50 per batch Purchasing $200 + $45 per purchase order Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders What is the budget variance for machining in an activity-based performance report?

Molina Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units. Sales totaled 16,000 units in March. The March finished goods inventory was 4,000 units. End-of- month finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales. The planned ending inventory of finished goods for May is

A flexible budget is sometimes referred to as a variable budget.

Activity-based budgets

Quicksand Corporation has a sales budget for next month of $50,000. Cost of goods sold is expected to be 60 percent of sales. All goods are purchased in the month used and paid for in the month following their purchase. The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired. Beginning accounts payable is $13,000. The ending accounts payable for Quicksand Corporation should be

The master budget is composed of the operations budget and the future budget.

Figure 8-3 Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months. -Refer to Figure 8-3. How many units of wood are expected to be used in production during the second month?

Walterboro, Inc., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Activity Cost Formula Maintenance $11,000 + $0.11 per machine hour Machining $25,000 + $0.50 per machine hour Setups $50 per batch Purchasing $200 + $45 per purchase order Following are the actual costs of producing 85,000 decals: 5,000 machine hours; 10 batches; 20 purchase orders What is the budget variance for setups in an activity-based performance report?