Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 62E
Flexible Budget for Various Levels of Production
Budgeted amounts for the year:
Required:
- 1. Prepare a flexible budget for 3,500, 4,000, and 4,500 units.
- 2. CONCEPTUAL CONNECTION Calculate the unit cost at 3,500, 4,000, and 4,500 units. (Note: Round unit costs to the nearest cent.) What happens to unit cost as the number of units produced increases?
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This is the length of time it takes to initiate and complete a finished product.
O a. Fiscal year
O b. Accounting year
c. Production cycle
Od. Short-term
QUESTION 21
Costs that remain constant even with changes in production level.
O a. Variable costs
O b. Start-up costs
O c. Semi-variable costs
O d. Fixed costs
QUESTION 22
The challenge of budgeting is to determine what will change and what will stay the same.
O True
False
QUESTION 23
The numbers on tax returns (cash basis) are the same as the number we use to manage a department (accrual basis).
O True
O False
QUESTION 24
A pattern of change over several time periods which can help us make estimates for the future is
a. a gap.
Ob. a fixed cost.
Oc. a transformation.
d. a trend.
The sales budget is based on assumptions about the ______?
A. No. of units to be sold and selling price per unit.
B. Timing of cash receipts
C. Contribution margin per unit and the number of units to be sold
D. Costs of the unit produced and the total fixed costs
In budgeting direct labor hours for the coming year, it is important to:Â *
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A. multiply production in units by the direct labor hours per unit
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B. divide production in units by the direct labor hours per unit
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C. subtract production in units from the direct labor hours per unit
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D. subtract direct labor hours per unit from production in units
Chapter 9 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 9 - Define the term budget. How are budgets used in...Ch. 9 - Prob. 2DQCh. 9 - Explain how both small and large organizations can...Ch. 9 - Prob. 4DQCh. 9 - What is a master budget? An operating budget? A...Ch. 9 - Explain the role of a sales forecast in budgeting....Ch. 9 - All budgets depend on the sales budget. Is this...Ch. 9 - Why is goal congruence important?Ch. 9 - Why is it important for a manager to receive...Ch. 9 - What is participative budgeting? Discuss some of...
Ch. 9 - A budget too easily achieved will lead to...Ch. 9 - Explain why a manager has an incentive to build...Ch. 9 - Discuss the differences between static and...Ch. 9 - Explain why mixed costs must be broken down into...Ch. 9 - What is the purpose of a before-the-fact flexible...Ch. 9 - Prob. 1MCQCh. 9 - Which of the following is part of the control...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - The budget committee a. reviews the budget. b....Ch. 9 - A moving, 12-month budget that is updated monthly...Ch. 9 - Which of the following is not part of the...Ch. 9 - Before a direct materials purchases budget can be...Ch. 9 - The first step in preparing the sales budget is to...Ch. 9 - Which of the following is needed to prepare the...Ch. 9 - A company requires 100 pounds of plastic to meet...Ch. 9 - A company plans to sell 220 units. The selling...Ch. 9 - Select the one budget below that is not an...Ch. 9 - A company has the following collection pattern:...Ch. 9 - The percentage of accounts receivable that is...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - Prob. 16MCQCh. 9 - For performance reporting, it is best to compare...Ch. 9 - To create a meaningful performance report, actual...Ch. 9 - To help assess performance, managers should use a...Ch. 9 - A firm comparing the actual variable costs of...Ch. 9 - Preparing a Sales Budget Patrick Inc. sells...Ch. 9 - Preparing a Production Budget Patrick Inc. makes...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Patrick Inc. makes...Ch. 9 - Preparing an Overhead Budget Patrick Inc. makes...Ch. 9 - Preparing an Ending Finished Goods Inventory...Ch. 9 - Preparing a Cost of Goods Sold Budget Andrews...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Oliver...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Preparing an Accounts Payable Schedule Wight Inc....Ch. 9 - Preparing a Cash Budget La Famiglia Pizzeria...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Preparing a Sales Budget Tulum Inc. sells powdered...Ch. 9 - Preparing a Production Budget Tulum Inc. makes a...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Tulum Inc. makes a...Ch. 9 - Preparing an Overhead Budget Tulum Inc. makes a...Ch. 9 - Prob. 40BEBCh. 9 - Preparing a Cost of Goods Sold Budget Lazlo...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Jameson...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Pilsner Inc. purchases raw materials on account...Ch. 9 - Preparing a Cash Budget Olivers Bistro provided...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Planning and Control a. Dr. Jones, a dentist,...Ch. 9 - Use the following information for Exercises 9-50...Ch. 9 - Prob. 51ECh. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Production Budget Aqua-Pro Inc. produces...Ch. 9 - Direct Materials Purchases Budget Langer Company...Ch. 9 - Direct Labor Budget Evans Company produces asphalt...Ch. 9 - Sales Budget Alger Inc. manufactures six models of...Ch. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Cash Payments Schedule Fein Company provided the...Ch. 9 - Cash Budget The owner of a building supply company...Ch. 9 - Flexible Budget for Various Levels of Production...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Prob. 65PCh. 9 - Operating Budget, Comprehensive Analysis Allison...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Ryan Richards, controller for Grange Retailers,...Ch. 9 - Participative Budgeting, Not-for-Profit Setting...Ch. 9 - Cash Budget The controller of Feinberg Company is...Ch. 9 - Optima Company is a high-technology organization...Ch. 9 - Direct Materials and Direct Labor Budgets Willison...Ch. 9 - Prob. 75PCh. 9 - Prob. 76CCh. 9 - Prob. 77CCh. 9 - Budgetary Performance, Rewards, Ethical Behavior...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Given the following information from Power Enterprises direct materials budget, how much direct materials needs to be purchased?arrow_forwardUsing High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Speedy Petes above. Assume that this information was used to construct the following formula for monthly delivery cost. TotalDeliveryCost=41,850+(12.00NumberofDeliveries) Required: Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations: 1. Calculate total variable delivery cost for January. 2. Calculate total delivery cost for January.arrow_forwardFill in the blanks: A flexible budget summarizes _____ and _____ for various volume levels by adjusting the _____ costs for the various levels of activities. The costs remain the same for all levels of activities.arrow_forward
- 1) The sales budget is based on assumptions about the ___________. a) Number of units to be sold and selling price per unit. b) Timing of cash receipts. c) Contribution margin per unit and the number of units to be sold. d) Costs of the units produced and the total fixed costs.  2) When constructing the production budget, the desired ending inventory for the period is determined based on: a) Next period sales b) Next period production c) Last period production and sales d) Credit period  3)Standard time allowed to complete one unit is 2 hours. A worker during a week (48 hours) completed 20 units and drawn a salary of Rs. 6000. The standard rate per day of 8 hours shift is Rs. 1000. Which one of the following is true? a)Labour efficiency variance is Zero b)Labour rate variance is zero c)Labour cost variance is zero d)None of the abovearrow_forwardA company uses two major material inputs in its production. To prepare its manufacturing operations budget, the company has to project the cost changes of these material inputs. The cost changes are independent of one another. The purchasing department provides the following probabilities associated with projected cost changes. Cost Change Material 1 Material 2 3% increase 0.3 0.5 5% increase 0.5 0.4 10% increase 0.2 0.1 The probability that there will be a 3% increase in the cost of both Material 1 and Material 2 is (E) a. 15% O b. 20% O c. 80% O d. 40%arrow_forwardUse the given data shown in the graph. A. What is the budgeted fixed cost per period? B. What is the budgeted variance cost per unit? C. What is the value of F (that is, the flexible budget for an activity of 8,000 units)? D. What is the flexible budget cost amount if the actual activity had been 16,000 units?arrow_forward
- In the production budget, total required production units is equal to the expected sales units plus a. beginning finished goods units. b. desired ending finished goods units plus beginning finished goods units. c. desired ending finished goods units. d. desired ending finished goods units minus beginning finished goods units.arrow_forwardEmman Corporation is preparing a flexible budget for the next year and requires a breakdown of the factory maintenance cost into the fixed and variable elements. (See picture for the table) Requirement: Find the estimated variable ratearrow_forwardx Thomas Co. provides the following fixed budget data for the year: Sales (20,000 units) Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations The company's actual activity for the Sales (21,000 units) Cost of goods sold: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Operating expenses: Fixed Variable Income from operations F3 $200,000 160.000 60,000 80,000 $ 12,000 40.000 year follows: $231.000 168,000 73.500 77.500 12.000 39.500 F6 $600,000 500,000 $100,000 52.000 $ 48,000 $651,000 550.000 $101.000 51.500 $49.500 F7 F8arrow_forward
- A. Determine CTC’s budgeted net income for 20x2. B. Assuming the sales mix remains as budgeted, determine how many units of each product CTC must sell in order to break even in 20x2arrow_forwardA Flexible Budget will show  a. Budgeted Sales Volumes at the original Budgeted Unit Costs  b. Actual Sales Volumes at the original Budgeted Unit Costs  c. Actual Sales Volumes at the Actual Unit Costsarrow_forwardWhat is the basic difference between a master budget and a flexible budget? Master budget is for five year period and flexible budget is for one year period. Master budget is on financial terms and flexible budget is on quantitative terms. Master budget is for specific capacity and flexible budget is for multiple capacity. Master budget is prepared on actuals and flexible budget is based on standards. Submit You have used 0 of 2 Save attemptsarrow_forward
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