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# \$3.00Managerial Accounting Unit 6 Budgeting

Chapter 22, # 1
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1. A formal written statement of management's plans for the future, expressed in financial terms, is a: (Points: 2)
gross profit report
responsibility report
budget
performance report

2. The budgetary unit of an organization which is led by a manager who has both the authority over and responsibility for the unit's performance is known as a: (Points: 2)
control center
budgetary area
responsibility center
managerial department

3. Scott Manufacturing Co.'s static budget at 10,000 units of production includes \$40,000 for direct labor and \$4,000 for electric power. Total fixed costs are \$23,000. At 12,000 units of production, a flexible budget would show: (Points: 2)
variable costs of \$52,800 and \$27,600 of fixed costs
variable costs of \$44,000 and \$23,000 of fixed costs
variable costs of \$52,800 and \$23,000 of fixed costs
variable and fixed costs totaling \$67,000

4. For January, sales revenue is \$700,000; sales commissions are 5% of sales; the sales manager's salary is \$96,000; advertising expenses are \$90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are \$2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are: (Points: 2)
\$157,100
\$240,600
\$183,750
\$182,100

5. For February, sales revenue is \$700,000; sales commissions are 5% of sales; the sales manager's salary is \$96,000; advertising expenses are \$80,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are \$2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of February are: (Points: 2)
\$185,650
\$189,500
\$196,100
\$230,600

6. Principal components of a master budget include which of the following? (Points: 2)
Production budget
Sales budget
Capital expenditures budget
All of the above

7. The first budget customarily prepared as part of an entity's master budget is the: (Points: 2)
production budget
cash budget
sales budget
direct materials purchases

8. Motorcycle Manufacturers, Inc. projected sales of 76,000 machines for 2010. The estimated January 1, 2010, inventory is 6,500 units, and the desired December 31, 2010, inventory is 7,000 units. What is the budgeted production (in units) for 2010? (Points: 2)
75,500
66,000
76,500
65,000

9. Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ \$ .60 per pound Material B 1.00 lb. per unit @ \$1.70 per pound Material C 1.20 lb. per unit @ \$1.00 per pound The dollar amount of direct material B used in production during the year is: (Points: 2)
\$1,057,400
\$1,193,400
\$1,026,800
\$1,224,000

10. Production and sales estimates for June are as follows:

Estimated inventory (units), June 1 21,000

Desired inventory (units), June 30 19,000

Expected sales volume (units):

Area X 7,000

Area Y 4,000

Area Z 5,500

Unit sales price \$20

The number of units expected to be manufactured in June is: (Points: 2)
10,000
11,500
14,500
12,500

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Managerial Accounting Unit 6 Budgeting
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