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Study Resources (Accounting)

23.2-36Onyx Company prepared a static budget at the beginning of the month.  At the end of the month, the                                           company is analyzing actual results versus budget using flexible budget methodology.  Data are as                                           follows: Static budget:  Sales volume: 1,000 unitsPrice: $70 per unit Variable expense:  $32.
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22.4-21Felton Manufacturing provides the following data excerpted from its 3rd quarter budget: Jul Aug Sep Cash collections $50,000 $40,000 $48,000 Cash payments:    Purchases of inventory 31,000 22,000 18,000    Operating expenses 12,000 9,000 11,600    Capital expenditures 0 25,000 0 The cash balance at June 30 is projected to be $4,000.  Based on the above data, how much.
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22.3-16Argyle Company is preparing the operating budget for the first quarter of 2012. They forecast sales of                                                                       $50,000 in January, $60,000 in February, and $70,000 in March.  Variable and fixed expenses are as                                                                                     follows: Variable:Power cost (40% of Sales) Miscellaneous expenses.
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23.4-8Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly                                           skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For                                           the first quarter of 2011, direct material and direct labor standards for one of their.
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22.4-1The budgeted cash collections for the current month typically take into consideration collections                                                         pertaining to credit sales of prior months. 22.4-2The cash budget can be prepared before the sales budget. 22.4-3The cash budget may be used to determine whether a company will need additional financing for the.
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22.3-34Hi-value Products Company is creating an operating budget for the 3rd quarter. Please review the                                                                                                   following budgets: Sales Budget Jul Aug Sep Cash sales: 75% $75,000 $90,000 $120,000 Credit sales: 25% 25,000 30,000 40,000 Total sales $100,000 $120,000 $160,000 Inventory, Purchases and COGS. Budget Jul Aug Sep Cost of goods sold $60,000 $72,000 $96,000 Desired.
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21.3-38Jim wants to invest $5,000 at the end of each year for the next 10 years to prepare for his retirement.  He believes he can earn 7% on his investments.  What will the value of his investment be at the end of 10 years? Future Value of an Annuity of $1 4% 5% 6% 7% 8% 9% 1 1.000 1.000 1.000 1.000 1.000 1.000 2 2.040 2.050 2.060 2.070 2.080 2.090 3 3.122 3.153 3.184 3.215 3.246 3.278 4 4.246 4.310 4.375 4.440 4.506 4.573 5 5.416 5.526 5.637 5.751 5.867 5.985 6 6.633 6.802 6.975 7.153 7.336 7.523 7 7.898 8.142 8.394 8.654 8.923 9.200 8 9.214 9.549 9.897 10.26 10.64 11.03 9 10.58 11.03 11.49 11.98 12.49 13.02 10 12.01 12.58 13.18 13.82 14.49 15.19 A)  $61,060 B)  $69,900 C) .
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23.3-31Which of the following statements is TRUE about price variances and quantity (or efficiency) variances? A)    They pertain to the difference between the static budget and actual results. B)     They pertain to the difference between the flexible budget and actual results. C)     They pertain to the difference between the flexible budget and the.
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23.4-42Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly                                           skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For                                           the first quarter of 2011, direct material and direct labor standards for one of their.
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22.1-1Budgeting is a technique that is used to plan for future cash inflows and outflows. 22.1-2A goal of the budgeting process is to assist managers with coordinating and implementing the                                                                                                   business plan. 22.1-3Budgets provide benchmarks that help managers evaluate performance. 22.1-4A goal of the budgeting process.
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23.2-19A company is analyzing month-end results compared to both static and flexible budgets.  This month the actual variable expenses per unit were lower than projected in the static budget. What kind of variance would that produce? A)  Favorable flexible budget variance for variable expenses B)  Favorable sales volume variance for variable expenses C) .
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23.4-40Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly                                           skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For                                           the first quarter of 2011, direct material and direct labor standards for one of their.
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23.3-11Manufacturing companies that use standard costs do NOT need to compute inventory cost based on LIFO,                             FIFO, or weighted average 23.3-12Price Variance = (Actual Price x Actual Quantity) – (Standard Price x Standard Quantity). 23.3-13Efficiency Variance = (Standard Price x Actual Quantity) – (Standard Price x Standard Quantity). 23.3-14The static budget.
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22.6-33Henderson Industrial Products Company has three divisions—Construction, Manufacturing, and Military.  It has also identified costs associated with several common service departments and has traced those costs to each division.  The Construction Division Income Statement is shown here: Construction Division Income Statement Division Total Civil Residential Commercial Sales revenue $350,000 $36,000 $98,000 $216,000 Variable expenses $125,000 $24,000 $41,000 $60,000 Contribution.
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22.4-51Pentangle Company has prepared a preliminary cash budget for the 3rd quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance $32,000 $4,400 $6,900 Cash collections 49,400 51,000 44,600 Cash available 81,400 55,400 51,500 Cash payments:    Purchases of inventory 36,000 9,000 11,000    Operating expenses 41,000 30,500 30,900    Capital expenditures 0 9,000 7,700 Total cash payments $77,000 $48,500 $49,600.
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23.1-11Portobello Company prepared the following static budget for the coming month: Static Budget Units/volume 5,000 Per Unit Sales revenue $3.00 $15,000 Variable expenses $1.80 9,000 Contribution margin 6,000 Fixed expenses 5,000 Operating income/(loss) $1,000 If a flexible budget was prepared at a volume of 6,000, how much would the operating income be? A)    ($200) B)     $   500 C)     $2,200 D)    $1,000 23.1-12Ibis Company.
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22.4-31Purchases for May were $100,000, while expected purchases for June and July are $110,000 and                                                                                                   $125,000, respectively.  All purchases are paid 25% in the month of purchase and 75% the following                                                                                     month.  At what amount are June.
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22.4-41At June 30, 2012, Alpha Company’s cash balance is $4,000.  Alpha is now preparing their cash budget for the third quarter of 2012.  The following data is provided: Cash Budget Jul Aug Sep Beginning cash balance $4,000 $8,000 $6,958 Cash collections 50,000 40,000 48,000 Cash available 54,000 48,000 54,958 Cash payments:    Purchases of inventory 31,000 22,000 18,000    Operating expenses 12,000.
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22.4-61AAA Company is preparing its 3rd quarter budget and provides the following data: Jul Aug Sep Cash collections $50,000 $40,000 $48,000 Cash payments:    Purchases of inventory 31,000 22,000 18,000    Operating expenses 12,000 9,000 11,600    Capital expenditures 13,000 25,000 0 Cash balance at June 30 is projected to be $4,000.  The company is required to maintain a.
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22.4-58Craig Manufacturing Company’s budgeted income statement includes the following data: Data extracted from budgeted income statement Mar Apr May Jun Sales $120,000 $90,000 $95,000 $100,000 Commission expense - 15% of sales 18,000 13,500 14,250 15,000 Salary exp 30,000 30,000 30,000 30,000 Miscellaneous expense – 4% of sales 4,800 3,600 3,800 4,000 Rent expense 3,600 3,600 3,600 3,600 Utility expense 1,900 1,900.
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22.2-9In order to prepare a budgeted income statement, several other budgets need to be prepared first.  Which                                                                       of the following is NOT one of the budgets needed to prepare the budgeted income statement? A)  Capital expenditures B)  Sales C)  Operating expenses D)  Inventory, purchases and cost of goods sold 22.2-10The.
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22.3-27Dahl Manufacturing is making its operating budget for the 4th quarter of 2012.  Sales are forecast at                                                                                     $60,000 in October, $65,000 in November, and $70,000 in December.  Cost of goods sold it 40% of sales.                                                          Expenses are budgeted as follows: Variable:Miscellaneous:5%.
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23.4-28Raymie Food Products is famous for their specialty fruit cake.  The main ingredient of the cake is dried                                           fruit, which Raymie purchases by the pound.  In addition, the production requires a certain amount of                                           direct labor. Raymie uses a standard cost system, and at.
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23.1-1 A static budget is prepared for one level of sales volume.                   23.1-2A favorable variance reflects an increase in operating income. 23.1-3A variance is the difference between an actual amount and a budgeted amount. 23.1-4Flexible budgets are budgets that summarize cost and revenue information at various volume levels                                          .
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23.2-29Tiger's Golf Center reported actual operating income for the current year of $60,000.  The flexible budget                                           operating income for actual volume achieved is $55,000, while the static budget operating income is                                           $58,000.  What is the flexible budget variance for operating income? A) $5,000 favorable.
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23.4-18Quick Tax Returns budgets 1.5 direct labor hours for every tax return that it prepares, at a standard          cost of $20 an hour.  During the most recent year, 500 returns were completed with the labor cost          totaling $17,600.  The actual labor cost was $22 per hour during that.
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22.1-11Which of the following is an example of the coordination and communication function of a budget? A)  A budget demands integrated input from different business units and functions. B)  Employees are motivated to achieve the goals set by the budget. C)  Budget figures are used to evaluate the performance of managers. D)  The budget.
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23.4-41Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly                                           skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For                                           the first quarter of 2011, direct material and direct labor standards for one of their.
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23.5-1When completing a standard costing income statement, favorable variances for direct materials or direct                                           labor will go to reduce the “cost of goods sold at standard cost.” 23.5-2When completing a standard costing income statement, unfavorable variances for direct materials or                                           direct labor will go to.
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22.6-6Which of the following BEST describes a business unit where the manager is primarily responsible for cost control? A)    Profit center B)     Investment center C)     Revenue center D)    Cost center 22.6-7Which of the following BEST describes a business unit where the manager is primarily responsible for generating sales revenue? A)    Profit center B)     Investment center C)     Revenue center D)    Cost.
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23.5-21Quality Brand Products uses standard costing to manage their direct costs and their overhead costs.                                           Overhead costs are allocated based on direct labor hours.  In the first quarter, Discount Brand had an                                           unfavorable efficiency variance for their variable overhead costs.  Which of the following.
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23.5-11Allbrand Company uses standard costs for their manufacturing division. Standards specify 0.1 direct labor                             hours per unit of product.  At the beginning of the year, the static budget for variable overhead costs                                           included the following data: Production volume:  5,000 units Estimated variable overhead costs:$12,500 Estimated direct labor hours:500.
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22.4-11Craig Manufacturing Company’s budgeted income statement includes the following data: Data Extracted from Budgeted Income Statement Mar Apr May Jun Sales $120,000 $90,000 $95,000 $100,000 Commission exp. - 15% of sales 18,000 13,500 14,250 15,000 Salary exp 30,000 30,000 30,000 30,000 Miscellaneous expense – 4% of sales 4,800 3,600 3,800 4,000 Rent expense 3,600 3,600 3,600 3,600 Utility expense 1,900 1,900.
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22.3-32Hi-value Products Company is creating an operating budget for the 3rd quarter.  Budgeted sales are                                                                                     $100,000 in July, $120,000 in August, $160,000 in September, and $200,000 in October.  Cost of goods                                                                       sold is 60% of sales.  The desired ending.
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23.6-12Atlas Manufacturing is closing the year 2012.  Atlas uses standard costing methodology in its accounting                                           system and for internal performance reporting.  Atlas’s ending balances are shown here: Sales revenue (standard) Sales revenue variance Cost of goods sold (standard) Selling & admin expense 150,000 4,000 78,000 60,000 Direct materials price variance Direct materials efficiency.
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23.3-21Georgia Custom Cabinet Company is setting standard costs for one of its products.  The main material is                                           cedar wood, sold by the board foot.  The current cost of cedar wood is $2.00 per board foot from the                                           supplier.  Delivery costs are $0.25 per board.
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22.3-6Norton Company prepared the following sales budget: Month Budgeted Sales March $200,000 April $280,000 May $220,000 June $260,000 Cost of goods sold is budgeted at 60% of sales, and the inventory at the end of February was $36,000.                                                                       Desired inventory levels at the end of each month are 30% of the next month’s cost of goods.
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22.5-1When companies use an enterprise resource planning system to roll up or consolidate the budgets of the                                                                       individual business units, it is more difficult for managers to conduct sensitivity analysis on their own                                                                       budget data. 22.5-2Budgets are compared to actual results.
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21.4-27When a company is evaluating an investment with discounted cash flows, if the investment has a higher                                                         risk, the company will use a lower discount rate, and vice versa. 21.4-28Alpha Company is considering an investment of $1,000,000 in a land development project.  It will yield                            .
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23. 6-13Alpine Productions uses a standard costing system for recording transactions; they also prepare an internal-use income statement using standard cost methodology.  At the end of 2011, Alpine reported the following data: Sales Revenues:$500,000 Cost of Goods Sold (standard costing)$382,500 Marketing & Admin expenses$105,000 Variances: Sales revenue $4,000 F Direct materials price variance 20 U Direct materials efficiency variance 300 F Direct labor.
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22.6-16Henderson Industrial Products uses a centralized service department for procurement of raw materials,                                                                       servicing all three of its divisions—Construction, Manufacturing, and Military.  The total monthly costs of the procurement department are $480,000.  Of these costs, 80% are traceable to the divisions, and 20% are considered untraceable. .
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21.4-17Allied Chemicals has a hurdle rate of 9% for new investments.  The production manager suggests that an                                                         equipment upgrade costing $84,460 would yield net cash flows of $40,000 in the first year, $30,000 in the                                           second year, $20,000 in the third year, and.
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23.1-21Portobello Company prepared the following static budget for the coming month: Static Budget Units/volume 5,000 Per Unit Sales revenue $3.00 $15,000 Variable expenses $1.80 9,000 Contribution margin 6,000 Fixed expenses 5,000 Operating income/(loss) $1,000 Using the format below, please prepare a flexible budget including data at volumes of 4,000 and 6,000                                           units. Flexible Budget Units/volume 4,000 5,000 6,000 Per.
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23.3-1Standard cost is a budget for a single unit of materials, labor or overhead. 23.3-2A standard cost is a carefully predetermined cost that usually is expressed on a per-unit basis.                   23.3-3Standard costs help motivate employees by serving as benchmarks against which their performance is                                           measured. 23.3-4A standard cost.
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22.6-26Henderson Industrial Products uses a centralized service department for procurement of raw materials,                                                                       servicing all three of its divisions: Construction, Manufacturing, and Military.  The Construction Division                                                         has been allocated a total of $192,000 of costs from the procurement department.  Of that.
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21.4-7La Grange Company is evaluating an opportunity to invest $50,000 in new manufacturing equipment.  It                                                         will have a useful life of 3 years, and will generate $10,000 cash flows at the end of Year 1; $20,000 of                                                         cash flows at the end.
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21.4-48Natick Products is evaluating an investment in new production machinery.  The initial investment is                                                         $700,000 and will yield cash flows of $120,000 per year for an 8 year period.  At the end of 8 years, the                                                         machinery will be sold and has.
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22.4-59California Products Company has the following data as part of its budget for the 2nd quarter: Apr May Jun Cash collections $30,000 $32,000 $36,000 Cash payments:    Purchases of inventory 4,500 4,600 3,800    Operating expenses 7,200 7,600 8,000    Capital expenditures 0 24,500 5,200 The cash balance at April 1 is forecast to be $8,200.  Please prepare a.
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21.4-38Which of the following best describes the profitability index? A)    An index of projects in order of which has the most net income B)     The ratio of present value of cash flows to initial investment C)     The ratio of total cash flows to initial investment D)    An array of possible investment outcomes at different.
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23.2-9Onyx Company prepared a static budget at the beginning of the month.  At the end of the month, the                                           company is analyzing actual results versus budget using flexible budget methodology.  Data are as                                           follows: Static budget:  Sales volume: 1,000 unitsPrice: $70 per unit Variable expense:  $32.
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