Escolar Documentos
Profissional Documentos
Cultura Documentos
Points 26 32 22 20 100
Score
Instructions: Designate the best answer for each of the following questions.
____ 1. Pine Company produced 96,000 units in 45,000 direct labor hours. Production for the
period was estimated at 99,000 units and 49,500 direct labor hours. A flexible budget
would compare budgeted costs and actual costs, respectively, at
a. 48,000 hours and 49,500 hours.
b. 49,500 hours and 45,000 hours.
c. 48,000 hours and 45,000 hours.
d. 45,000 hours and 45,000 hours.
____ 6. Which of the following is true with regard to budgeting vs. long-range planning?
a. Both tend to be very detailed.
b. They are the same in all significant aspects.
c. The maximum length for both usually is a year, with shorter periods of time also
common.
d. Budgeting is oriented more toward short-term goals; long-range planning toward
long-term goals.
____ 13. The Northern Division of Hart Corp. had an ROI of 20% when sales were $1 million
and controllable margin was $200,000. What were the average operating assets?
a. $5,000,000
b. $1,000,000
c. $100,000
d. $40,000
A. Dryer Manufacturing produces and sells containers designed to hold liquid beverages. The
sales budget for 2011 is as follows:
Dryer desires an ending inventory equal to 10% of the next quarter's sales. January 1, 2011
inventory is 9,000 units. Unit sales during the 1st quarter of 2012 are estimated at 90,000
units.
Instructions: Compute required production for the year, showing quarterly data.
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AT5- 4 Test Bank for Managerial Accounting, Fifth Edition
B. Parker Manufacturers is preparing its direct labor budget for the second quarter of 2011 from
the following budgeted production figures: April—70,000 units; May—100,000 units; and June
—110,000 units. Each unit requires 2 hour of direct labor. The hourly wage rates are expected
to be $14 in April and May and $16 in June.
Instructions: Prepare a direct labor budget for the quarter, showing monthly data.
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C. Carson's Widget Works makes 70% of its sales on credit. Experience shows that 60% of the
credit customers pay in the month of sale, 30% within the following month, the rest in the next
month. Total sales for May, June, July, and August are estimated at $210,000; $240,000;
$300,000; and $250,000, respectively.
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Achievement Test 5 AT5- 5
D. John's Sporting Goods is preparing its annual cash budget, showing quarterly data, for 2011.
A $20,000 cash balance is desired at the end of each quarter. Borrowings and repayments
are in $1,000 increments at 12% annual interest. The company borrows at the beginning of a
quarter based on the estimated deficiency. Interest is paid only when principal is repaid at the
end of a quarter with excess cash. The maximum amount of principal was repaid in the
second quarter. The cash balance on December 31, 2010 is $21,000. Total receipts and
disbursements, other than borrowings and principal or interest payments, are estimated at:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Disbursements: $226,000 $226,000 $244,000 $260,000
Receipts: 216,000 230,000 245,000 253,000
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AT5- 6 Test Bank for Managerial Accounting, Fifth Edition
Instructions: Prepare a flexible budget performance report for March. Omit headings other than
descriptive columnar headings.
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Achievement Test 5 AT5- 7
Sales $6,000,000
Variable costs 3,200,000
Controllable fixed costs 2,000,000
Average operating assets 5,000,000
Instructions: Compute ROI for each of the following situations. Show all computations.
(a) Sales will increase 10% with no change in the contribution margin ratio.
(b) Variable costs and controllable fixed costs will both be reduced 10%.