ACCT 434 Week 2 Master Budget Flexible Budgets

DEVRY ACCT 434 Week 2 Master Budget
Flexible Budgets
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1.Question :(TCO 2) Operating budgets and financial budgets
2.Question :(TCO 2) To gain the benefits of budgeting, ________ must understand and support
the budget.
3.Question :
(TCO 2) Which budget is not necessary to prepare the budgeted balance sheet?
4.Question :(TCO 2) A feature of a standard-costing system is that the costs of every product
or service planned to be worked on during the period can be computed at the start of that
period. This feature of standard costing makes it possible to
5.Question :(TCO 2) An unfavorable variance indicates that
6.Question :(TCO 2) Which of the following statements is true about overhead cost variance
analysis using activity-based costing?
7.Question :(TCO 2) Overhead costs have been increasing due to all of the following except
8.Question :(TCO 2) Katie Enterprises reports the year-end information from 20X8 as
follows: Sales (70,000 units) $560,000; Cost of goods sold 210,000; Gross margin 350,000;
Operating expenses 200,000; Operating income $150,000. Katie is developing the 20X9
budget. In 20X9, the company would like to increase selling prices by 4%, and as a result
expects a decrease in sales volume of 10%. All other operating expenses are expected to
remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed
cost. What is budgeted sales for 20X9?
9.Question :(TCO 2) Hester Company budgets on an annual basis for its fiscal year. The
following beginning and ending inventory levels (in units) are planned for the fiscal year of
July 1, 2008, through June 30, 2009.
July 1, 2008 June 30, 2009
Raw material (note) 40,000 10,000
Work in process 8,000 8,000
Finished goods 30,000 5,000
(note) Three units of raw material are needed to produce each unit of finished product.
If Hester Company plans to sell 600,000 units during the 2008-2009 fiscal year, the number

of units it would have to manufacture during the year would be
10.Question :(TCO 2) Information pertaining to Brenton Corporation's sales revenue is
presented in the following table:
February March April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are
collectible, 60% are collected in the month of sale and the remainder in the month following
the sale. Cost of purchases of inventory each month are 70% of the next month's projected
total sales. ll purchases of inventory are on account; 25% are paid in the month of purchase,
and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash payments in March for inventory purchases are
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