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Meyerhoff Company has the following budgeted sales: July $100,000, August $150,000, and September $125,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during September are
A $140,000
B $132,500
C $131,250
D $125,000
Ashcroft Inc. prepared a 2010 budget for 60,000 units of product. Actual production in 2010 was 65,000 units. To be most useful, what amounts should a performance report for this company compare?
A The actual results for 65,000 units with the original budget for 60,000 units
B The actual results for 65,000 units with a new budget for 65,000 units
C The actual results for 65,000 units with last year’s actual results for 67,000 units
D It doesn’t matter. All of these choices are equally useful
The direct materials budget shows
Units to be produced 3,000
Total pounds needed for production 12,000
Total materials required 13,200
A .44 pounds
B 4.0 pounds
C 4.4 pounds
D Cannot be determined from the data provided
A company budgeted unit sales of 102,000 units for January, 2010 and 120,000 units for February, 2010. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month’s budgeted unit sales. If there were 30,600 units of inventory on hand on December 31, 2009, how many units should be produced in January, 2010 in order for the company to meet its goals?
A 107,400 units
B 102,000 units
C 96,600 units
D 138,000 units
If there were 70,000 pounds of raw materials on hand on January 1, 140,000 pounds are desired for inventory at January 31, and 420,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
A 350,000 pounds
B 560,000 pounds
C 280,000 pounds
D 490,000 pounds
A manager of a cost center is evaluated mainly on
A The profit that the center generates
B The ability to control costs
C The amount of investment it takes to support the cost center
D The amount of revenue that can be generated
The direct materials budget details
- The quantity of direct materials to be purchased
- The cost of direct materials to be purchased
A 1
B 2
C Both 1 and 2
D Neither 1 nor 2
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Lamont Company uses flexible budgets. At normal capacity of 8,000 units, budgeted manufacturing overhead is $64,000 variable and $180,000 fixed. If Lamont had actual overhead costs of $250,000 for 9,000 units produced, what is the difference between actual and budgeted costs?
A $2,000 unfavorable
B $2,000 favorable
C $6,000 unfavorable
D $8,000 favorable
Which of the following will cause an increase in ROI?
A An increase in variable costs
B An increase in average operating assets
C An increase in sales
D An increase in controllable fixed costs
A static budget
A Should not be prepared in a company
B Is useful in evaluating a manager’s performance by comparing actual variable costs and planned variable costs
C Shows planned results at the original budgeted activity level
D Is changed only if the actual level of activity is different than originally budgeted
Andersen Company’s required production for June is 66,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 150,000 and 165,000 pounds, respectively. How many pounds of direct material Z must be purchased?
A 189,000
B 198,000
C 204,000
D 213,000
The production budget shows that expected unit sales are 40,000. The total required units are 45,000. What are the required production units?
A 5,000
B 7,500
C 10,000
D Cannot be determined from the data provided