100. On the next page is the unadjusted trial balance of Danos Department Store on December 31, Year 6. The company closes its books annually. You are asked to indicate the adjusting entries required on December 31, Year 6 to conform the books to accrual accounting principles. 1. Danos neglected to record unpaid charges for telephone services for December in the amount of $13,700. 2. […]
36. Which of the following statements about MBO is FALSE? A) It compares quantifiable target goals with actual results achieved by an employee. B) It has been shown to be useful for defining individual or unit performance related to strategic plans. C) It is recommended as a method for comparing people or units. D) It is a popular method of managerial appraisal. E) It […]
61) Sage Company issued $600,000, 8%, 5-year bonds for 106, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year? A) $636,000 B) $600,000 C) $628,800 D) $648,000 62) The journal entry to record payment of bond payable at maturity will include a: A) debit to bonds payable, credit to premium on bonds payable and a […]
56.Plans that identify costs and expenses under each manager’s control prior to the reporting period, typically based on the flexible budget approach, are called: A.Cost accounting systems. B.Managerial accounting systems. C.Responsibility accounting systems. D.Responsibility accounting budgets. E.Activity-based accounting systems. 57.Within an organizational structure, the person most likely to be evaluated in terms of controllable costs would be: A.A payroll clerk. B.A cost center manager. […]
6.2-11) XYZ Company owns an asset with historical cost of $75,000, estimated useful life of 10 years, and salvage value of $5,000. As of December 31, 2011, the asset has accumulated depreciation of $49,000 after adjustment. The company still owes $20,000 in liabilities from the purchase of the asset years ago. What is the asset’s book value on December 31, 2011? A) $70,000 B) […]
42.A cost that remains unchanged in total despite variations in volume of activity within a relevant range is a: A. Fixed cost. B. Curvilinear cost. C. Variable cost. D. Step-wise variable cost. E. Standard cost. 43.A cost that changes in proportion to changes in volume of activity is a(n): A. Differential cost. B. Fixed cost. C. Incremental cost. D. Variable cost. E. Product cost. 44.A cost that changes as volume changes, but at a […]
51.Assuming a periodic inventory system is used, identify the statement below that is correct? A.Freight In is subtracted from Purchases to arrive at delivered cost of purchases. B.Another name that may be used for the Freight In account is “Transportation In.” C.Freight charges that are listed on the invoice received from a supplier are not part of the total credit to Accounts Payable to […]
90. Listed below are nine global business terms introduced in this chapter: Each of the following statements may (or may not) describe one of these terms. In the space provided below each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms. a. The strategy of creating offsetting positions so that losses from currency […]
81.Clement Company paid an account payable related to a previous utility bill of $1,000. This transaction should be recorded as follows on the payment date: A.Debit Accounts Payable $1,000, credit Cash $1,000. B.Debit Cash $1,000, credit Accounts Payable $1,000. C.Debit Utilities Expense $1,000, credit Cash $1,000. D.Debit Cash $1,000, credit Utilities Expense $1,000. 82.On July 7, 2012, Saints Inc. received $10,000 in cash from […]
9) Which of the following statements is true regarding cost-plus pricing? A) It starts with a target price which is the estimated price for a product. B) A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment. C) It first determines product characteristics and target price on the basis of customer […]
Flexible Budget
For this assignment, refer to the scenario located in “Problems Series A,” section 8-19A of Ch. 8, “Performance Evaluation,“ of Fundamentals of Managerial Accounting Concepts. This scenario puts you in charge of preparing a budget for the Redmond Management Association annual public relations luncheon.
Read the scenario in the textbook and complete the activity below.
Use Excel spreadsheet by showing all work and formulas to complete the following:
Prepare a flexible budget.
Compute the sales volume variance and the variable cost volume variances based on a comparison between the master budget and the flexible budget.
Compute flexible budget variances by comparing the flexible budget with the actual results.
Create a 6- to 8-slide presentation for the budget committee meeting. Complete the following in your presentation:
1. Summarize the results of the sales volume and variable cost volume variances computations based on the comparison between the master budget and the flexible budget.
2. Summarize the results of the flexible budget variances computations based on the comparison between the flexible budget and the actual results.
3. Justify the favorable or unfavorable budget variances.
4. Since this is a not-for-profit organization, address why anyone should be concerned with meeting the budget.
5. Make recommendations for what can be done differently to stay on budget for future luncheons. Provide specific examples to support your recommendations.
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