$20.00 ACC-350 Managerial Accounting Quiz 4ISBN: 9780073379
Book Title: Introduction to Managerial Accounting
Book Author: Peter C. Brewer, Ray H Garrison, Eric Noreen,
Found in Business: Accounting
Chapter 1, # 0
1. The usual starting point in budgeting is to make a forecast of net income.
2. Cash collections in a schedule of cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period.
3. In a merchandising company, the required merchandise purchases for a period are determined by subtracting the units in beginning inventory from the sum of the units to be sold during the period and the desired ending inventory.
4. The disbursements section of a cash budget consists of all cash payments for the period except cash payments for dividends.
5. Which of the following benefits could an organization reasonably expect from an effective budget program?
A) Better control of the organization's costs.
B) Better coordination of an organization's activities.
C) Better communication of the organization's objectives.
D) All of the above.
6. A basic idea underlying __________________ is that a manager should be held responsible only for those items that the manager can actually control to a significant extent.
A) participative budgeting
B) planning and control
C) responsibility accounting
D) the master budget
7. When preparing a direct materials budget, the required purchases of raw materials in units equals:
A) raw materials needed to meet the production schedule + desired ending inventory of raw materials - beginning inventory of raw materials.
B) raw materials needed to meet the production schedule - desired ending inventory of raw materials - beginning inventory of raw materials.
C) raw materials needed to meet the production schedule - desired ending inventory of raw materials + beginning inventory of raw materials.
D) raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.
8. Which of the following statements is NOT correct concerning the Cash Budget?
A) It is not necessary to prepare any other budgets before preparing the Cash Budget.
B) The Cash Budget should be prepared before the Budgeted Income Statement.
C) The Cash Budget should be prepared before the Budgeted Balance Sheet.
D) The Cash Budget builds on earlier budgets and schedules as well as additional data.
9. On October 1, The Gala Manufacturing Company has 300 units of Product XYZ on hand. The company plans to sell 1,200 units of Product XYZ during October, and plans to have 500 units on hand October 31. How many units of Product XYZ must be produced during October?
10. Depasquale Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.41 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The production budget calls for producing 5,000 units in May and 5,400 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?
11. Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,600 direct labor-hours will be required in August. The variable overhead rate is $5.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $69,440 per month, which includes depreciation of $15,680. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
12. The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 5,800 direct labor-hours will be required in May. The variable overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
13. Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The variable selling and administrative expense is $4.20 per unit. The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:
14. Sedita Inc. is working on its cash budget for July. The budgeted beginning cash balance is $46,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for July will be:
15. Francis Manufacturing Company is currently preparing its cash budget for next month and has gathered the following information: Expected cash receipts: $39,400. Expected disbursements: _____. Direct materials $12,000. Direct labor $9,000. Manufacturing overhead $11,500. Selling and administrative expenses $22,000. The beginning cash balance will be $6,000 and the company requires a minimum cash balance at the end of the month of $5,000. How much will Francis Manufacturing need to borrow to meet its cash needs for the month?
D) None of the above.
16. Which of the following budgets are prepared before the sales budget? Budgeted Income Statement; Direct Labor Budget
A) Yes; Yes
B) Yes; No
C) No; Yes
D) No; No
17. Pitkins Company collects 20% of a month's sales in the month of sale, 70% in the month following sale, and 6% in the second month following sale. The remainder is uncollectible. Budgeted sales for the next four months are: January; February; March; April. Budgeted sales $200,000; $300,000; $350,000; $250,000 Cash collections in April are budgeted to be:
18. All of Gaylord Company's sales are on account. Thirty-five percent of the credit sales are collected in the month of sale, 45% in the month following sale, and the rest are collected in the second month following sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the company: January; February; March; April. Total sales $50,000; $60,000; $40,000; $30,000. What is the amount of cash that should be collected in March?
19. The following information relates to Minorca Manufacturing Corporation for next quarter: January February March: Expected sales (in units): 440,000 390,000 400,000: Desired ending finished goods inventory (in units): 28,000 30,000 35,000. How many units should Minorca plan on producing for the month of February?
A) 360,000 units
B) 388,000 units
C) 392,000 units
D) 420,000 units
20. Garry Manufacturing Corporation's most recent production budget indicates the following required production: October; November; December; Required production (units): 210,000; 175,000; 110,000. Each unit of finished product requires 5 pounds of raw materials. The company maintains raw materials inventory equal to 25% of the next month's expected production needs. How many pounds of raw material should Garry plan on purchasing for the month of November?
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