Question

41. The budget process involves doing all of the following except                    

              A.    executing plans to achieve the goals                                          

              B.    firing all managers who fail to achieve operational goals specified in the budget       

              C.    periodically comparing actual results with the goals                                 

              D.    establishing specific goals                                     

42. The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as

              A.    continuous budgeting                                          

              B.    master budgeting                                                

              C.    zero-based budgeting                                                

              D.    flexible budgeting                                                

43. Jase Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $24,000. At 12,000 units of production, a flexible budget would show

              A.    variable costs of $44,000 and $24,000 of fixed costs                                 

              B.    variable and fixed costs totaling $68,000                             

              C.    variable costs of $52,800 and $24,000 of fixed costs                                 

              D.    variable costs of $52,800 and $29,000 of fixed costs                                 

44. If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be

              A.    $9,600                                                   

              B.    $11,550                                                 

              C.    $11,660                                                 

              D.    $1,400                                                   

45. Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 697,000 units, estimated beginning inventory is 106,000 units, and desired ending inventory is 88,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.

                     Material A: 0.50 lb. per unit @ $0.60 per pound                                 

                     Material B: 1.00 lb. per unit @ $1.53 per pound                                 

                     Material C: 1.20 lb. per unit @ $1.18 per pound                                 

                     The dollar amount of material A used in production during the year is              

              A.$203,700 B.$1,038,870 C.$209,100    D.$961,464

Answer 1

41

The budget process involves doing all of the following except firing all managers who fail to achieve operational goals specified in the budget

Option B is correct

42

The process of developing budget estimates as if were being initiated for the first time is referred to as zero-based budgeting

Option C is correct

43

Variable costs = (40000+4000)/10000*12000= $52,800

Fixed costs = $24,000

Variable costs of $52,800 and $24,000 of fixed costs

Option C is correct

44

Budgeted production = Budgeted cost of goods sold+Budgeted ending inventory-Budgeted beginning inventory

Budgeted production = 10260+9400-8000= $11,660

Option C is correct

45

Budgeted production = 697000+88000-106000= 679000

Dollar amount of material A = 679000*0.50*0.60= $203,700

Option A is correct