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DeVry Chicago ACCT 434 Week 2 Master Budget Flexible Budgets Graded Quiz 2014

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Question;Grading SummaryThese are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Date Taken: Time Spent: Question Type: # Of Questions: # Correct:Multiple Choice 10 Grade Details 1. Question: (TCO 2) Operating budgets and financial budgets Student Answer: have nothing to do with the master budget. are prepared after the master budget. combined, form the master budget. are prepared before the master budget. 2. Question: (TCO 2) To gain the benefits of budgeting, ________ must understand and support the budget. Student Answer: customers management at all levels suppliers All of the above 3. Question: (TCO 2) Which budget is not necessary to prepare the budgeted balance sheet? Student Answer: Revenues budget Budgeted income statement Cash budget Budgeted statement of cash flows 4. Question: (TCO 2) A feature of a standard-costing system is that the costs of every product or service planned to be worked on during the period can be computed at the start of that period. This feature of standard costing makes it possible to Student Answer: maintain actual costs as an integral part of the costing system. use a simple recording system. eliminate routine reports. justify eliminating the budgeting process. 5. Question: (TCO 2) An unfavorable variance indicates that Student Answer: actual costs are less than budgeted costs. actual revenues exceed budgeted revenues. the actual amount decreased operating income relative to the budgeted amount. All of the above 6. Question: (TCO 2) Which of the following statements is true about overhead cost variance analysis using activity-based costing? Student Answer: Overhead cost variances are calculated for output-unit level costs only. Overhead cost variances are calculated for variable manufacturing overhead costs only. A four-variance analysis can be conducted. Activity-based costing uses input measures for all activities, resulting in the inability to do flexible budgets needed for variance analysis. 7. Question: (TCO 2) Overhead costs have been increasing due to all of the following except Student Answer: product proliferation. tracing more costs as direct costs with the help of technology. more complexity in distribution processes. increased automation. 8. Question: (TCO 2) Katie Enterprises reports the year-end information from 20X8 as follows: Sales (70,000 units) $560,000, Cost of goods sold 210,000, Gross margin 350,000, Operating expenses 200,000, Operating income $150,000. Katie is developing the 20X9 budget. In 20X9, the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 20X9? Student Answer: $582,400 $524,160 $504,000 $560,000 9. Question: (TCO 2) Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 2008, through June 30, 2009. July 1, 2008 June 30, 2009Raw material (note) 40,000 10,000Work in process 8,000 8,000 Finished goods 30,000 5,000(note) Three units of raw material are needed to produce each unit of finished product.If Hester Company plans to sell 600,000 units during the 2008-2009 fiscal year, the number of units it would have to manufacture during the year would be Student Answer: 625,000. 575,000. 540,000. 640,000. 10. Question: (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table: February March April Cash Sales $160,000 $150,000 $120,000 Credit Sales 300,000 400,000 280,000 Total Sales $460,000 $550,000 $400,000Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. ll purchases of inventory are on account, 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.Brenton's budgeted total cash payments in March for inventory purchases are Student Answer: $385,000. $358,750. $306,250. $280,000.

 

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