Question : 66) The manufacturing labor budget depends wage rates, production methods, : 1217216

 

66) The manufacturing labor budget depends on wage rates, production methods, and hiring plans.

 

67) If inventoriable costs in the operating budget are going to be in accordance with Generally Accepted Accounting Principles (GAAP), they include only variable manufacturing costs.

 

68) Activity-based budgeting provides better decision-making information than budgeting based solely on output-based cost drivers (units produced, units sold, or revenues).

 

69) Activity-based costing analysis takes a long-run perspective and treats all activity costs as variable costs.

 

70) Activity-based budgeting (ABB) focuses on the budgeting cost of activities necessary to produce and sell products and services.

71) Activity-based budgeting would permit the use of multiple drivers and multiple cost pools in the budgeting process.

 

72) Listed below are elements of the master budget.  Determine whether each budget is an operating budget or a financial budget.  Place an O for operating budget or F for a financial budget.

 

1.Capital expenditures budget

2.Cost of goods sold budget

3.Revenues budget

4.Budgeted statement of cash flows

5.Distribution costs budget

6.Marketing costs budget

7.Cash budget

8.Direct materials cost budget

9.Budgeted balance sheet

10.Budgeted income statement

 

 

73) Nittany Company sells three products with the following seasonal sales pattern:

 

Products

Quarter A      B     C

140%30%10%

230%20%40%

320%20%40%

410%30%10%

 

The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:

 

ProductUnitsSelling Price

A50,000$ 8

B125,00020

C62,50012

 

Required:

Prepare a sales budget, in units and dollars, by quarters for the company for the coming year.

 

74) Lubriderm Corporation has the following budgeted sales for the next six-month period:

 

MonthUnit Sales

June90,000

July120,000

August210,000

September150,000

October180,000

November120,000

 

There were 30,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20% of the unit sales for the next month.

 

Five pounds of materials are required for each unit produced. Each pound of material costs $8. Inventory levels for materials are equal to 30% of the needs for the next month. Materials inventory on June 1 was 15,000 pounds.

 

Required:

a.Prepare production budgets in units for July, August, and September.

b.Prepare a purchases budget in pounds for July, August, and September, and give total purchases in both pounds and dollars for each month.

75) Perry Company has the following information:

 

MonthBudgeted Sales

March$100,000

April106,000

May102,000

June109,000

July105,000

 

In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month’s cost of sales.

 

Required:

Prepare a purchases budget for April through June.

 

 

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