Question : 91.Wilson, Inc. created a spreadsheet that utilized a set of : 1302854

 

 

91.Wilson, Inc. created a spreadsheet that utilized a set of budget relationships that could be adjusted for various activity levels. What did Wilson create?

A.A capital budget

B.A static budget

C.A standard budget

D.A flexible budget

 

92.Which of the following assumptions is made while preparing a flexible manufacturing overhead budget, when production levels change?

A.Total fixed costs remain the same.

B.The variable cost per unit changes.

C.Fixed costs per unit remain the same.

D.Total overhead costs remain the same when sales remain the same.

 

93.Exclusive Decor’s budgeted income statement for 2014 follows:

 

Sales (10,000 units)              $128,000

Less:

Direct materials$27,600

Direct labor6,000

Variable factory overhead              16,800

Fixed factory overhead              15,000

Fixed selling & admin expenses              30,000                 95,400

Income before taxes                            $ 32,600

 

How much income before taxes will appear on a flexible budget for 11,000 units?

A.$35,860

B.$40,140

C.$85,140

D.$40,360

 

94.Yemesi, Inc.’s budgeted income statement for 2014 follows:

 

Sales (80,000 units)              $360,000

Less:

Direct materials$128,000

Direct labor36,000

Variable overhead32,000

Fixed overhead10,000

Fixed selling & admin expenses                12,000              218,000

Income before taxes                            $142,000

 

How much income before taxes would appear on a flexible budget for 84,000 units?

A.$150,200

B.$149,100

C.$140,900

D.$132,200

 

95.Carrier Company’s budgeted income statement for 2014 follows:

 

Sales (4,000 units)              $84,000

Less:

Variable costs$44,000

Fixed costs 26,000              70,000

Income before taxes                            $14,000

 

How much would be reported as income before taxes on a flexible budget for 5,000 units?

A.$24,000

B.$50,000

C.$38,750

D.$52,000

 

96.KirbyCor’s budgeted income statement for 2014 follows:

 

Sales (80,000 units)              $400,000

Less:

Direct materials$120,000

Direct labor80,000

Variable overhead40,000

Fixed costs   80,000              320,000

Income before taxes                            $  80,000

 

How much would be reported for total variable costs on a flexible budget at 75,000 units?

A.$75,000

B.$300,000

C.$225,000

D.None of the answer choices are correct.

 

97.Managers can create budget slack by

A.understating their actual level of sales.

B.reducing their sales forecasts.

C.understating expected expenses.

D.shifting income into another accounting period.

 

98.Which of the following are problem behaviors that may occur when budgets are used for both planning and control?

I.Padding of budgets

II.Shifting of income between periods

III.Understatement of budgeted expenses

A.I, II, and III

B.I and II

C.II and III

D.I and III

 

99.Which of the following is not a method that managers may use to achieve a budget income target in a given period?

A.Shift discretionary expenses to the next period

B.Encourage customers to take shipments at the end of the period even though they do not want the products until the next period

C.Fraudulently recognize the next period’s sales in the current period

D.Understate budgeted expenses

 

100.Management by exception refers to the practice of only investigating variances

A.in product costs.

B.in which the actual cost exceeds the budget.

C.that are material in dollar amounts relative to budgeted amounts.

D.in areas of the company that have been performing poorly.