Deck 6: Master Budget and Responsibility Accounting

Question 1

Benchmarks encourage the setting of stretch goals.

Answer 1

True

Question 2

The priority approach to budgeting is an incremental approach.

Answer 2

False

Question 3

Planning the performance of the organization, providing a frame of reference, and investigating variances are part of the

A)budgetary cycle.
B)cash budget.
C)financing budget.
D)master budget.
E)production budget.

Answer 3

A

Question 4

A master budget

A)includes only financial aspects of a plan and excludes nonfinancial aspects.
B)is an aid to coordinating what needs to be done to implement a plan.
C)includes broad expectations and visionary results.
D)should not be altered after it has been agreed upon.
E)is based upon budget constraints outside of management control.

Question 5

Budgets are advantageous because they

A)compel planning that includes the implementation of plans, provide performance criteria, and promote goodwill.
B)provide performance criteria, promote goodwill, and save money.
C)compel planning that includes the implementation of plans, provide performance criteria, and promote communication and coordination within the organization.
D)compel planning that includes the implementation of plans, require organizing, and ensure controlling.
E)ensure that the organization meets its goals.

Question 6

The actual data resulting from a strategy should be compared to budgeted results.

Question 7

Budgeted financial statements are also referred to as pro forma statements.

Question 8

Management at all levels should understand and support the budget and all aspects of the management control system.

Question 9

Budgets can play both planning and control roles for management.

Question 10

The master budget embraces the impact of both operating decisions and financing decisions as related to acquisitions and uses of scarce resources.

Question 11

The master budget summarizes all the financial and nonfinancial plans into a single document.

Question 12

Long-run planning (strategic plans)involves the preparation of the

A)operating budget.
B)cash budget.
C)budget standards.
D)profit plan.
E)capital budget.

Question 13

Budgeting is done in place of "strategic analysis."

Question 14

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Question 15

The process of getting a company's objectives understood and accepted by all departments and functions is known as

A)communication.
B)compilation.
C)continuity.
D)coordination.
E)administration.

Question 16

A budget is a quantitative expression for a set time period of a proposed future plan of action by management.

Question 17

Stretch goals in budgeting tend to

A)decrease line-management participation in attaining corporate goals.
B)increase failure.
C)increase anxiety without motivation.
D)motivate improved performance beyond the status quo.
E)improve communication and coordination.

Question 18

The budget constraint describes only financial limitations that are within the company's control.

Question 19

A limitation of comparing a company's performance against actual results of last year is that

A)it includes adjustments for future conditions.
B)feedback is no longer a possibility.
C)the benchmark may be unrealistic.
D)past results can contain inefficiencies of the past year.
E)the budgeting time period is set at one year.

Question 20

The master budget embraces the impact of

A)operating and managerial decisions.
B)operating and financing decisions.
C)financing and managerial decisions.
D)operating, managerial, and financing decisions.
E)the differences between the budget and the actual costs, for a given cycle.

Question 21

The production budget of a manufacturing company is prepared after the revenue budget.

Question 22

The financial budget is that part of the master budget that comprises

A)the capital budget and the cash budget.
B)the capital budget and the budgeted balance sheet.
C)the cash budget, operating budget and budgeted balance sheet.
D)the cash budget, the budgeted statement of cash flows, and the retained earnings budget.
E)the capital budget, the cash budget, budgeted balance sheet, and the budgeted statement of cash flows.

Question 23

The revenue budget and the budgeted income statement are used to prepare the budgeted balance sheet and the budgeted statement of cash flows.

Question 24

Budgetary slack is automatically included in the revenue budget.

Question 25

Clare's Bears manufactures stuffed bears.The company updates it annual budget every month in order to force management to think about the forthcoming 12 months and not just the current budget.This is an example of a

A)master budget.
B)moving budget.
C)target budget.
D)timing budget.
E)rolling budget.

Question 26

Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units.How many units should be produced?

A)14,600 units
B)13,400 units
C)10,600 units
D)9,400 units
E)7,250 units

Question 27

Describe the benefits to an organization of preparing an operating budget.

Question 28

Listed below are elements of the master budget.Determine whether each budget is an operating budget or a financial budget.Place an O for operating budget or F for a financial budget.
1.Capital expenditures budget
2.Cost of goods sold budget
3.Revenues budget
4.Budgeted statement of cash flows
5.Distribution costs budget
6.Marketing costs budget
7.Cash budget
8.Direct materials cost budget
9.Budgeted balance sheet
10.Budgeted income statement

Question 29

Budgets that change (rolling or continuous)motivate managers to look forward.

Question 30

The first three schedules to complete when preparing the master operating budget are the

A)revenue budget, production budget, and direct materials purchases and usage budget.
B)costs of goods sold budget, production budget, and cash budget.
C)revenue budget, overhead budget, and production budget.
D)revenue budget, cash inflows, and production expenditures.
E)revenue budget, costs of goods sold budget, and production budget.

Question 31

Describe operating and financial budgets and give at least two examples of each discussed in the textbook.

Question 32

Unit sales of Product 1 are currently 20,000, while unit sales of Product 2 are currently double those of Product 1.What will the company's sales forecast be assuming sales of Product 1 increase by 10 percent and those of Product 2 go up by 8,000 units from the current level?

A)20,000 and 40,000 units, respectively
B)22,000 and 44,000 units, respectively
C)22,000 and 46,000 units, respectively
D)76,000 units
E)22,000 and 48,000 units, respectively

Question 33

The master budget reports a large amount of nonfinancial data from various value chain functions.

Question 34

The usual starting point in budgeting is to forecast net income.

Question 35

Winnie and Pooh have just purchased a small honey manufacturing company that was having financial difficulties.After a brief operating period, they decided that the company's main problem was lack of any financial planning.The company made a good product and market potential was great.Required:
Explain why a company needs a good budgeting plan.Specifically address the need for a master budget.

Question 36

A production budget expressed in units is equal to

A)budgeted sales plus beginning finished goods inventory plus targeted ending finished goods inventory.
B)budgeted sales less beginning finished goods inventory less targeted ending finished goods inventory.
C)budgeted sales less beginning finished goods inventory plus targeted ending finished goods inventory.
D)budgeted sales plus beginning finished goods inventory less targeted ending finished goods inventory.
E)last year's sales plus beginning finished goods inventory plus targeted ending finished goods inventory.

Question 37

List and describe the four approaches to budgeting.

Question 38

For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units.All other inventories are zero.How many units should be produced?

A)39,200 units
B)40,000 units
C)41,800 units
D)42,800 units
E)40,800 units

Question 39

A rolling budget encourages management to be thinking about the next 12 months.

Question 40

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.

Question 41

Use the information below to answer the following question(s).Fair Score Company manufactures scoreboards for athletic events.It expects to sell 20,000 scoreboards in 2018.The company has enough beginning inventory of direct materials to produce 8,000 units.Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead.Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units.The scoreboards sell for $800.There is no ending work-in-process inventory.Direct materials costs for each scoreboard total $200 while direct labour is $80.Manufacturing overhead is $60 per scoreboard.
What will be the Fair Score Company budgeted amount of cost of goods sold?

A)$8,160,000
B)$6,800,000
C)$6,460,000
D)$6,120,000
E)$5,975,000

Question 42

Use the information below to answer the following question(s).Contempo Futon manufactures futons.The estimated number of sales for the last quarter of 2018 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales.January and February 2018 sales are anticipated to be 15,000 futons in each month.The cost to produce a futon is $125.
What should be the number of futons Contempo Futon budgets to be produced in November?

A)34,000 futons
B)32,500 futons
C)26,200 futons
D)25,000 futons
E)23,000 futons

Question 43

Use the information below to answer the following question(s).Layne Cedar manufactures cedar chests.The estimated number of chests for the first three months of 2019 is as follows:
Finished goods inventory at the end of December is 3,000 units.Ending finished goods are equal to 30 percent of next month's sales.April 2019 sales are expected to total 16,000 units.
What should be the budgeted number of chests produced in January 2019?

A)8,800 chests
B)11,200 chests
C)13,000 chests
D)14,200 chests
E)14,700 chests

Question 44

The direct materials usage budget is based on

A)the units to be produced during a period.
B)budgeted sales dollars.
C)the predetermined factory overhead rate.
D)the amount of labour hours worked.
E)direct materials purchases.

Question 45

Use the information below to answer the following question(s).Fair Score Company manufactures scoreboards for athletic events.It expects to sell 20,000 scoreboards in 2018.The company has enough beginning inventory of direct materials to produce 8,000 units.Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead.Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units.The scoreboards sell for $800.There is no ending work-in-process inventory.Direct materials costs for each scoreboard total $200 while direct labour is $80.Manufacturing overhead is $60 per scoreboard.
What will be Fair Score Company's budgeted total sales for 2018?

A)$18,400,000
B)$17,600,000
C)$16,000,000
D)$15,200,000
E)$12,300,000

Question 46

Use the information below to answer the following question(s).Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2018.The company had enough beginning inventory of direct materials to produce 24,000 units.Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units.The boxes sell for $3.00 and the company keeps no work-in-process inventory.Direct materials costs for each box total $1.00 while direct labour is $0.50.Factory overhead is $0.20 per box.
What will be Berry's Boxes cost of goods sold in 2018?

A)$42,000
B)$24,000
C)$38,000
D)$30,000
E)$34,000

Question 47

Use the information below to answer the following question(s).Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2019.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
How many flowerpots should Country Heather produce in 2019?

A)48,000 flowerpots
B)44,000 flowerpots
C)41,000 flowerpots
D)39,000 flowerpots
E)18,000 flowerpots

Question 48

Use the information below to answer the following question(s).Fair Score Company manufactures scoreboards for athletic events.It expects to sell 20,000 scoreboards in 2018.The company has enough beginning inventory of direct materials to produce 8,000 units.Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead.Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units.The scoreboards sell for $800.There is no ending work-in-process inventory.Direct materials costs for each scoreboard total $200 while direct labour is $80.Manufacturing overhead is $60 per scoreboard.
What will be Fair Score Company's budgeted total cost of direct materials used in 2018?

A)$3,400,000
B)$3,800,000
C)$3,600,000
D)$3,200,000
E)$3,155,000

Question 49

Use the information below to answer the following question(s).Fair Score Company manufactures scoreboards for athletic events.It expects to sell 20,000 scoreboards in 2018.The company has enough beginning inventory of direct materials to produce 8,000 units.Beginning work-in-process inventory totals 2,000 units and is 100 percent complete as to material and 50 percent complete as to labour and overhead.Beginning finished units total 4,000 with a target ending finished inventory of 3,000 units.The scoreboards sell for $800.There is no ending work-in-process inventory.Direct materials costs for each scoreboard total $200 while direct labour is $80.Manufacturing overhead is $60 per scoreboard.
How many scoreboards should Fair Score Company produce in 2018?

A)23,000
B)21,000
C)20,000
D)19,000
E)16,000

Question 50

Use the information below to answer the following question(s).Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2019.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
What will be Country Heather's cost of goods sold?

A)$122,400
B)$136,000
C)$139,400
D)$149,600
E)$101,500

Question 51

Use the information below to answer the following question(s).Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2018.The company had enough beginning inventory of direct materials to produce 24,000 units.Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units.The boxes sell for $3.00 and the company keeps no work-in-process inventory.Direct materials costs for each box total $1.00 while direct labour is $0.50.Factory overhead is $0.20 per box.
How many boxes should Berry's Boxes produce in 2018?

A)24,000 boxes
B)20,000 boxes
C)19,500 boxes
D)20,500 boxes
E)22,500 boxes

Question 52

Use the information below to answer the following question(s).Contempo Futon manufactures futons.The estimated number of sales for the last quarter of 2018 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales.January and February 2018 sales are anticipated to be 15,000 futons in each month.The cost to produce a futon is $125.
How many futons will Contempo Futon budget to be produced in the three months?

A)72,500 futons
B)75,000 futons
C)82,500 futons
D)90,000 futons
E)98,650 futons

Question 53

Use the information below to answer the following question(s).Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2019.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
What will be Country Heather's total costs incurred for direct materials, direct manufacturing labour, and manufacturing overhead, respectively, for 2019?

A)$0; $40,000; $16,000
B)$0; $41,000; $16,000
C)$80,000; $40,000; $16,000
D)$82,000; $41,000; $16,400
E)$84,000; $40,000; $16,400

Question 54

Use the information below to answer the following question(s).Layne Cedar manufactures cedar chests.The estimated number of chests for the first three months of 2019 is as follows:
Finished goods inventory at the end of December is 3,000 units.Ending finished goods are equal to 30 percent of next month's sales.April 2019 sales are expected to total 16,000 units.
How many chests should be budgeted to be produced in the first quarter of 2019?

A)37,000 chests
B)44,800 chests
C)41,800 chests
D)38,800 chests
E)48,400 chests

Question 55

Use the information below to answer the following question(s).Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2019.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
What will be Country Heather's budgeted revenue?

A)$216,000
B)$240,000
C)$312,000
D)$318,000
E)$300,500

Question 56

Manufacturing overhead costs for the budget include

A)factory utility costs.
B)direct materials and supervision.
C)direct labour and direct materials.
D)sales supervisors' salaries.
E)direct labour and indirect labour.

Question 57

Direct material purchases equal

A)usage plus production needs.
B)production needs plus target ending inventories.
C)beginning inventories plus production needs.
D)usage plus target ending inventories less beginning inventories.
E)the number of units to be produced times the amount of direct material in each unit.

Question 58

Use the information below to answer the following question(s).Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2018.The company had enough beginning inventory of direct materials to produce 24,000 units.Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units.The boxes sell for $3.00 and the company keeps no work-in-process inventory.Direct materials costs for each box total $1.00 while direct labour is $0.50.Factory overhead is $0.20 per box.
What will be Berry's Boxes budgeted revenue?

A)$54,000
B)$60,000
C)$78,000
D)$79,500
E)$72,000

Question 59

Use the information below to answer the following question(s).Berry's Boxes manufactures boxes.It expects to sell 20,000 boxes in 2018.The company had enough beginning inventory of direct materials to produce 24,000 units.Beginning inventory of finished units totalled 2,000 with a target ending inventory of 2,500 units.The boxes sell for $3.00 and the company keeps no work-in-process inventory.Direct materials costs for each box total $1.00 while direct labour is $0.50.Factory overhead is $0.20 per box.
What will be Berry's Boxes production costs incurred for direct materials, direct manufacturing labour, and manufacturing overhead, respectively, for 2018?

A)$20,500; $10,250; $4,100
B)$19,500; $9,750; $3,900
C)$10,000; $5,000; $4,000
D)$22,500; 11,250; $4,500
E)$12,000; $6,000; $4,800

Question 60

Cooper Company has a production schedule of 18,000 units and a budgeted sales volume of 20,000 units for the current year.In addition, 4,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

A)20,000 units
B)14,000 units
C)6,000 units
D)2,000 units
E)1,900 units

Question 61

Use the information below to answer the following question(s).Capable Inc.expects to sell 35,000 athletic uniforms for $80 each in 2019.Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform.Each uniform requires 2.0 square metres (sq.m.)of material which is all added at the start of production.The following inventory levels are expected to apply to 2019:

What is the amount budgeted for cost of goods sold in 2019?

A)$1,190,000.
B)$980,000
C)$840,000
D)$1,020,000.
E)$1,156,000.

Question 62

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
The operating budget includes the

A)capital budget.
B)cash budget.
C)budgeted balance sheet.
D)budgeted cash flow statement.
E)production budget.

Question 63

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
Boone Hobbies gross margin for next month is expected to be

A)$280,000.
B)$336,000.
C)$356,000.
D)$360,000.
E)$240,000.

Question 64

Use the information below to answer the following question(s).Contempo Futon manufactures futons.The estimated number of sales for the last quarter of 2018 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales.January and February 2018 sales are anticipated to be 15,000 futons in each month.The cost to produce a futon is $125.
What will be Contempo Futon's cost of goods manufactured for December?

A)$3,937,500
B)$3,750,000
C)$2,812,500
D)$2,625,000
E)$3,187,500

Question 65

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018:

On the 2018 budgeted income statement, what amount will be reported for cost of goods sold?

A)$91,500
B)$105,000
C)$90,000
D)$88,500
E)$72,000

Question 66

Use the information below to answer the following question(s).Konrade Inc.expects to sell 30,000 athletic uniforms for $80 each in 2019.Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform.Each uniform requires 2.0 square metres (sq.m.)of material which is all added at the start of production.The following inventory levels are expected to apply to 2019:

What is the amount budgeted for cost of goods manufactured in 2019?

A)$1,020,000
B)$986,000
C)$1,156,000
D)$1,190,000
E)$1,054,000

Question 67

Use the information below to answer the following question(s).Marguerite Inc..expects to sell 20,000 pool cues for $20.00 each.Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue.Each pool cue requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started..Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2019:

On the 2019 budgeted income statement, what amount will be reported for gross margin?

A)$124,000
B)$104,000
C)$312,000
D)$160,000
E)$400,000

Question 68

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018:

How many ceramic vases need to be produced in 2018?

A)5,900 vases
B)6,100 vases
C)7,000 vases
D)6,000 vases
E)6,300 vases

Question 69

Answer the following question(s)using the information below.Furniture Inc.estimates the following number of mattress sales for the first four months of 2019:
Finished goods inventory at the end of December 2018 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales.
How many mattresses need to be produced in January 2019?

A)4,400 mattresses
B)5,000 mattresses
C)6,500 mattresses
D)7,100 mattresses
E)5,600 mattresses

Question 70

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
Boone Hobbies budgeted purchases for next month is expected to be

A)$240,000.
B)$264,000.
C)$225,000.
D)$360,000.
E)$244,000.

Question 71

Use the information below to answer the following question(s).Konrade Inc.expects to sell 30,000 athletic uniforms for $80 each in 2019.Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform.Each uniform requires 2.0 square metres (sq.m.)of material which is all added at the start of production.The following inventory levels are expected to apply to 2019:

What is the amount budgeted for cost of goods sold in 2019?

A)$1,156,000
B)$986,000
C)$840,000
D)$2,400,000
E)$1,020,000

Question 72

Use the information below to answer the following question(s).Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
A rolling budget is a budget or plan that

A)rolls several budgets together for forecasting purposes.
B)has one budget category roll into the next category.
C)rolls all budget categories together into a master budget.
D)is always available for a specified future period by replacing time periods as the lapse.
E)is not used to guide operations.

Question 73

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018:

How many kilograms of material will need to be purchased for 2018 production and inventory requirements?

A)3,100 kg
B)2,900 kg
C)2,750 kg
D)3,150 kg
E)2,950 kg

Question 74

Answer the following question(s)using the information below.Furniture Inc.estimates the following number of mattress sales for the first four months of 2019:
Finished goods inventory at the end of December 2018 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales.
The budgeting process generally concludes with the preparation of the

A)cash budget.
B)selling expense budget.
C)budgeted financial statements.
D)research and development budget.
E)production budget.

Question 75

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018:

What are the 2018 budgeted costs for direct manufacturing labour?

A)$62,000
B)$60,000
C)$61,000
D)$59,000
E)$63,000

Question 76

Use the information below to answer the following question(s).Marguerite Inc..expects to sell 20,000 pool cues for $20.00 each.Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue.Each pool cue requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started..Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2019:

How many pool cues need to be produced in 2019?

A)22,500 cues
B)18,000 cues
C)20,000 cues
D)19,500 cues
E)20,500 cues

Question 77

Answer the following question(s)using the information below.Furniture Inc.estimates the following number of mattress sales for the first four months of 2019:
Finished goods inventory at the end of December 2018 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales.
In going from the sales budget to the production budget, adjustments need to be made for

A)finished goods inventories.
B)overhead charges.
C)direct materials inventories.
D)sales returns and allowances.
E)changing from revenue to costs.

Question 78

Use the information below to answer the following question(s).Capable Inc.expects to sell 35,000 athletic uniforms for $80 each in 2019.Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform.Each uniform requires 2.0 square metres (sq.m.)of material which is all added at the start of production.The following inventory levels are expected to apply to 2019:

What is the amount budgeted for cost of goods manufactured in 2019?

A)$1,020,000
B)$986,000
C)$1,292,000
D)$1,088,000
E)$1,054,000

Question 79

Use the information below to answer the following question(s).Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2018.Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2018:

On the 2018 budgeted income statement, what amount will be reported for gross margin?

A)$122,000
B)$90,000
C)$48,000
D)$30,000
E)$120,000

Question 80

Answer the following question(s)using the information below.Furniture Inc.estimates the following number of mattress sales for the first four months of 2019:
Finished goods inventory at the end of December 2018 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales.
How many mattresses need to be produced in the first quarter (January, February, March)of 2019?

A)18,500 mattresses
B)19,400 mattresses
C)20,900 mattresses
D)22,400 mattresses
E)18,000 mattresses