Question :
71. A disadvantage of static budgets that they: A. start with a clean : 1251669
71. A disadvantage of static budgets is that they:
A. start with a clean slate
B. cannot be used by service companies
C. do not show possible changes in underlying activity levels
D. show the expected results of a responsibility center for several levels of activity
72. A series of budgets for varying rates of activity is termed a(n):
A. flexible budget
B. variable budget
C. master budget
D. activity budget
73. For January, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager’s salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are:
A. $157,100
B. $240,600
C. $183,750
D. $182,100
74. For February, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager’s salary is $96,000; advertising expenses are $80,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of February are:
A. $185,650
B. $189,500
C. $196,100
D. $230,600
75. For March, sales revenue is $1,000,000; sales commissions are 4% of sales; the sales manager’s salary is $80,000; advertising expenses are $75,000; shipping expenses total 1% of sales; and miscellaneous selling expenses are $2,100 plus 1% of sales. Total selling expenses for the month of March are:
A. $217,100
B. $187,550
C. $194,100
D. $192,100
76. Cameron Manufacturing Co.’s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000 for variable electric power. Total fixed costs are $25,000. At 8,000 units of production, a flexible budget would show:
A. variable costs of $64,000 and $25,875 of fixed costs
B. variable costs of $64,000 and $25,000 of fixed costs
C. variable costs of $72,000 and $25,000 of fixed costs
D. variable and fixed costs totaling $112,000
77. Tanya Inc.’s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $15,000. A flexible budget for 12,000 units of production would show:
A. the same cost structure in total
B. direct materials of $72,000, direct labor of $52,800, utilities of $5,000, and supervisor salaries of $15,000
C. total variable costs of $148,800
D. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $15,000
78. The primary difference between a fixed budget and a flexible budget is that a fixed budget
A. cannot be changed after the period begins, whereas flexible budget can be changed after the period begins.
B. is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales.
C. includes only fixed costs, whereas a flexible budget includes only variable costs.
D. is a plan for a single level of production, whereas a flexible budget can be converted to any level of production.
79. At the beginning of the period, the Cutting Department budgeted direct labor of $155,000, direct material of $165,000 and fixed factory overhead of $15,000 for 9,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.
A. $416,000
B. $370,556
C. $368,889
D. $335,000
80. At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct material of $170,000 and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.
A. $288,000
B. $305,000
C. $350,000
D. $378,000
