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Exam 19: Introduction to Managerial Accounting and the Master Budget

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Question 81

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Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

A) Comparing actual performance to previously budgeted amounts
B) Evaluating results of operations
C) Creating detailed budgets
D) Implementing operational plans

E) B) and C)
F) A) and D)

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Question 82

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Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

A) True
B) False

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Question 83

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Indirect materials costs like lubricants and cleaning fluids are included in manufacturing overhead.

Fireox Company's selected cost data for 2017 are shown below: $\begin{array} { | l | l | } \hline \text { Work in process inventory, } 1 \text { Jan } 2017 & \$ 5880 \\\hline \text { Direct materials used } & 105,000 \\\hline \text { Work in process inventory, } 31 \text { Dec } 2017 & 2780 \\\hline \text { Cost of goods manufactured } & 193,300 \\\hline\end{array}$ Assuming manufacturing overhead costs of $27,810,what is the amount of direct labour incurred by Fireox Company in 2017?

The wages and benefits of the factory cleaners are included in manufacturing overhead.

The wages and benefits of the factory manager are included in manufacturing overhead.

Crystal Ltd is a retailer of stone ornaments.The company sold 15,200 units in 2017.The company has provided the following information: $\begin{array} { | l | l | } \hline \text { Sales revenue } & \$ 554,000 \\\hline \text { Purchases (excluding freight in) } & 290,000 \\\hline \text { Selling and administrative expenses } & 68,000 \\\hline \text { Freight in } & 14,000 \\\hline \text { Beginning inventory } & 49,000 \\\hline \text { Ending inventory } & 53,400 \\\hline\end{array}$ What is the cost per unit sold?

A budget focuses primarily on financial information but does not reflect specific business strategies.

Repair and maintenance costs of vehicles used to deliver products to the customers are included in manufacturing overhead.

When a company is preparing a budgeted cash flow statement and it wishes to calculate the payments to suppliers for purchases of inventory,it should refer to which of the following?

The starting point in the budgeting process is the preparation of the:

Kapital Ltd has prepared the operating budget for the first quarter of 2017.The company forecasts sales of $50,000 in January,$60,000 in February and $70,000 in March.Variable and fixed expenses are as follows: Variable: electricity cost (40% of sales) Miscellaneous expenses: (10% of sales) Fixed: salary expense: $8000 per month Rent expense: $4000 per month Depreciation expense: $1200 per month Electricity cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1200 per month Calculate total operating expenses for the month of January.

The following information was obtained from Fizz Company: $\begin{array} { | l | l | } \hline \text { Advertising costs } & \$ 9100 \\\hline \text { Indirect labour } & 3600 \\\hline \text { CEO's salary } & 61,000 \\\hline \text { Direct labour } & 40,000 \\\hline \text { Indirect materials } & 5000 \\\hline \text { Direct materials used } & 60,000 \\\hline \text { Factory electricity and gas } & 520 \\\hline \text { Factory janitorial costs } & 1800 \\\hline \text { Manufacturing equipment depreciation } & 1200 \\\hline \text { Delivery vehicle depreciation } & 1700 \\\hline \text { Administrative wages and salaries } & 20,000 \\\hline\end{array}$ Calculate Fizz's total product costs.

Which of the following best describes the term sensitivity analysis?

Management is accountable to its suppliers and vendors in which of the following ways?

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for the Cash account,which document should be used?

Which of the following is NOT a period cost?

Which of the following describes the inventory,purchases,and cost of sales budget?

Caplico Company has prepared the following sales budget: $\begin{array} { | l | l | } \hline \text { Month } & { \text { Budgeted sales } } \\\hline \text { March } & \$ 500,000 \\\hline \text { April } & 190,000 \\\hline \text { May } & 248,000 \\\hline \text { June } & 233,000 \\\hline\end{array}$ Cost of sales is budgeted at 50% of sales and the inventory at the end of February was $34,000.Desired inventory levels at the end of each month are 10% of the next month's cost of sales.What is the desired beginning inventory on 1 June?

Budget preparation is a part of the planning process.