176. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and
cost drivers have been developed:
Activity
Cost Formula
Design
$5,000 + $0.05 per machine hour
Machining
$25,000 + $0.01 per machine hour
Setups
$35 per batch
Purchasing
$50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design
$5,080
Machining
?
Setups
?
Purchasing
$600
The following variances were given in the activity performance report:
Design
?
Machining
$40 F
Setups
$15 F
Purchasing
?
What is the actual cost of setups?
177. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and
cost drivers have been developed:
Activity
Cost Formula
Design
$5,000 + $0.05 per machine hour
Machining
$25,000 + $0.01 per machine hour
Setups
$35 per batch
Purchasing
$50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design
$5,080
Machining
?
Setups
?
Purchasing
$600
The following variances were given in the activity performance report:
Design
?
Machining
$40 F
Setups
$15 F
Purchasing
?
What is the activity variance for design?
178. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and
cost drivers have been developed:
Activity
Cost Formula
Design
$5,000 + $0.05 per machine hour
Machining
$25,000 + $0.01 per machine hour
Setups
$35 per batch
Purchasing
$50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design
$5,080
Machining
?
Setups
?
Purchasing
$600
The following variances were given in the activity performance report:
Design
?
Machining
$40 F
Setups
$15 F
Purchasing
?
What is the activity variance for purchasing?
179. Goal congruence means
180. The ideal budget system creates
181. When budgets are used to evaluate performance, which factor might NOT have a significant behavioral
effect?
182. Analysis that fosters management by exception is
183. When the reaction to a budget is negative, resulting in managerial behavior that is negative for the
organization, the resulting behavior is known as
184. Which of the following is NOT a key feature of an ideal budgetary system?
185. Which of the following is NOT a key feature of an ideal budgetary system?
186. Which of the following is NOT an advantage of participative budgeting?
187. Myopic behavior occurs when
188. An example of a negative incentive is
189. Which of the following is NOT a potential disadvantage of participative budgeting?
190. Participative budgeting has which of the following potential problems?
191. The condition that exists when managers deliberately underestimate revenues or overestimate costs to
provide flexibility is called:
192. Realistic budgets reflect
193. Controllable costs are those that a manager
194. Define budgeting and control. How are budgets used in planning? How are budgets used to control? What
are some of the reasons for budgeting?
195. This problem can be broken into components
a.
Last year sales = 500,000 units. The
organization is planning a 10 percent increase in
sales for the year 2012. The company is a retail
organization that sees higher sales due to the
holidays in the 4th quarter. 40 percent of the
sales occur in the 4th quarter and the remaining
units are sold equally over the other three
quarters.
The beginning inventory for the year amounts
to 20,000 units. The estimated sales for the first
quarter of 2013 amount to 115,000 units. The
company requires an ending inventory of 20
percent of the next quarters’ sales.
b.
Given the schedules above, if the projected
sales price is $50 per unit, what is the expected
revenue per quarter? Also, given the following
information, what is the estimated costs of
production?
Materials:
Each unit requires 1 yard of fabric and 1/2
pound of fiberfill stuffing. Fabric can be
purchased at $9.00 per yard and fiberfill sells
for $4.00 per pound. Inventories of materials are
listed as follows:
Qtr1
Qtr2
Qtr3
Qtr4
Fabric/yds
17,000
20,000
18,000
19,000
Fiberfill/lbs
5,000
6,700
8,000
8,500
Beginning inventory of fabric is 16,000 yards and 6,000 lbs of fiberfill.
It takes an estimated time of .25 hours to produce one unit of output. The labor cost per hour is $25 per hour and the taxes and
benefit load is 25 percent.
A
B
Sales – Last year
500,000
10% increase
550,000
Units
110,000
110,000
110,000
220,000
550,000
115,000
Projected Revenue
$ 5,500,000
$5,500,000
$5,500,000
$ 11,000,000
$27,500,000
Production Budget
Units Needed
132,000
132,000
154,000
243,000
Less: Beg Invty
20,000
22,000
22,000
44,000
Units to produce
112,000
110,000
132,000
199,000
196. Modern Goods Corporation has the following budgeted sales for the selected six-month period:
Month
Unit Sales
January
15,000
February
20,000
March
35,000
April
25,000
May
30,000
June
20,000
There were 7,500 units of finished goods in inventory at the beginning of January. Plans are to have an inventory of finished product equal to 20
percent of the unit sales for the next month.
Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30 percent of
the needs for the next month. Materials inventory on January 1 was 5,000 pounds.
Required:
a.
Prepare production budgets in units for February, March, and April.
b.
Prepare a purchases budget in pounds and dollars for February, March, and April.
a.
February
March
April
Sales
20,000
35,000
25,000
Add: Desired ending inventory
7,000
5,000
6,000
Total needs
27,000
40,000
31,000
Less: Beginning inventory
4,000
7,000
5,000
Units to be produced
23,000
33,000
26,000
197. Harlan manufactures picture frames. Sales for July are expected to be 10,000 units of various sizes.
Historically, the average frame requires five foot of framing, one square foot of glass, and one square foot of
backing. Beginning inventory includes 7,000 feet of framing, 1,500 square feet of glass, and 2,500 square feet
of backing. Current prices are $0.90 per foot of framing, $4.50 per square foot of glass, and $1.50 per square
foot of backing. Ending inventory should be 150 percent of beginning inventory. Purchases are paid for in the
month acquired.
Required:
a.
Determine the quantity of framing, glass, and backing that is to be purchased during July.
b.
Determine the total amount of cash needed for July purchases.
Desired ending inventory
10,500
2,250
3,750
Production needs (10,000 units)
50,000
10,000
10,000
Total needs
60,500
12,250
13,750
Less: Beginning inventory
7,000
1,500
2,500
b.
Cash need:
Framing
(53,500 ´ $0.90)
$ 48,150
Backing
(11,250 ´ $1.50)
16,875
Total
$113,400
198. Lumberton Company has the following projected account balances for June 30, 2014:
Accounts payable
$20,000
Sales
$400,000
Accounts receivable
50,000
Capital stock
200,000
Depreciation, factory
12,000
Retained earnings
????
Inventories (5/31)
90,000
Maintenance, factory
14,000
Inventories (6/30)
90,000
Cash
28,000
Materials used
100,000
Equipment, net
120,000
Office expenses
40,000
Buildings, net
200,000
Insurance, factory
2,000
Utilities, factory
8,000
Factory wages
70,000
Selling expenses
30,000
Bonds payable
80,000
Required:
a.
Prepare a budgeted income statement for June 2014.
b.
Prepare a budgeted balance sheet as of June 30, 2014.
Sales
$400,000
Cost of goods sold:
Beginning inventory
$ 90,000
Materials used
100,000
Factory Wages
70,000
Factory Depreciation
12,000
Factory Insurance
2,000
Factory Maintenance
14,000
Factory Utilities
8,000
Ending inventory
(90,000)
206,000
Gross margin
$194,000
Operating expenses:
Selling expenses
$ 30,000
Office expenses
40,000
70,000
Net income
$124,000
Cash
$ 28,000
Accounts payable
$ 20,000
Accounts receivable, net
50,000
Bonds payable
80,000
Inventories
90,000
Capital stock
200,000
Equipment, net
120,000
Retained earnings
188,000
Buildings, net
200,000