Question 1

For next year,Roberto,Inc.,has budgeted sales of 15,000 units,targeted ending finished goods inventory of 750 units,and beginning finished goods inventory of 450 units.All other inventories are zero.How many units should be produced next year?

Accepted Answer

To determine the number of units that should be produced next year, we need to use the following formula:

Units to be produced = Expected Sales + Target Ending Inventory - Beginning Inventory

Substituting the given values in the formula:

Units to be produced = 15,000 + 750 - 450
Units to be produced = 15,300

Therefore, the answer is choice C) 15,300 units.

Question 2

When direct material and direct labor is the limiting factor,revenue budgets are usually based on ________.

Accepted Answer

When direct material and direct labor are the limiting factors, revenue budgets are typically based on the maximum units that can be manufactured, as these factors directly constrain production capacity.

Question 3

Answer the following questions using the information below:
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

Accepted Answer

The cost per vase is $15 ($2 materials + $10 labor + $3 overhead). The cost of goods sold is calculated as: (6,000 units sold + 500 ending inventory - 400 beginning inventory) x $15 = $90,000.

Question 4

Which of the following is required to arrive at the budgeted units to be produced in a year?

Accepted Answer

To arrive at the budgeted units to be produced in a year, it's essential to know the estimated finished goods inventory required at the end of the year. This helps in determining how many units need to be produced to meet both the sales demand and the desired inventory levels.

Question 5

Answer the following questions using the information below:
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }
\end{array}$$
-What are the 2016 budgeted production costs for direct materials,direct manufacturing labor,and manufacturing overhead,respectively?

Accepted Answer

Direct materials: 6,000 units x $2 = $12,000Direct manufacturing labor: 6,000 units x $10 = $60,000Manufacturing overhead: 6,000 units x $3 = $18,000

Question 6

Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-How many pool cues need to be produced in 2016?

Accepted Answer

To find the number of pool cues to be produced, calculate the difference between the expected sales and the change in finished goods inventory: 20,000 (expected sales) + 2,500 (ending inventory) - 2,000 (beginning inventory) = 20,500 cues.

Question 7

Orange Corporation has budgeted sales of 16,000 units,targeted ending finished goods inventory of 4,000 units,and beginning finished goods inventory of 2,000 units.How many units should be produced next year?

Accepted Answer

The answer of Orange Corporation has budgeted sales of 16,000...

Question 8

Which of the following information is required by a company's manager while preparing a manufacturing overhead costs budget?

Accepted Answer

Manufacturing overhead costs refer to the expenses incurred in the production process, such as maintenance of factory building, equipment depreciation, utilities, etc. Therefore, the estimated expense for maintenance of factory building is required by a company's manager while preparing a manufacturing overhead costs budget. Options A, B, and D relate to other areas of the company's operations and are not directly related to manufacturing overhead costs.

Question 9

Antique Brass Company has budgeted sales volume of 120,000 units and budgeted production of 108,000 units,while 20,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

Accepted Answer

The answer of Antique Brass Company has budgeted sales volume...

Question 10

Answer the following questions using the information below:
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }
\end{array}$$
-How many ceramic vases should be produced in 2016?

Accepted Answer

To meet the sales expectation of 6,000 vases and increase the finished goods inventory from 400 to 500 units, Elton, Inc. needs to produce 6,100 vases (6,000 sales + 100 additional inventory).

Question 11

Esther Baskets Company expects to manufacture and sell 20,000 baskets in 2016 for $5 each.There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 5,000 baskets.The company keeps no work-in-process inventory.What amount of sales revenue will be reported on the 2016 budgeted income statement?

Accepted Answer

To calculate the sales revenue, we need to find out the number of baskets to be manufactured during the year.

Total number of baskets to be manufactured = Beginning finished goods inventory + Number of baskets to be sold + Target ending inventory
Total number of baskets to be manufactured = 4,000 + 20,000 + 5,000
Total number of baskets to be manufactured = 29,000

Sales revenue = Number of baskets to be sold × Price per basket
Sales revenue = 20,000 × $5
Sales revenue = $100,000

Therefore, the correct answer is B) $100,000.

Question 12

Which of the following is most likely to be a cost driver for the variable portion of marketing costs?

Accepted Answer

The number of units sold is the most likely to be a cost driver for the variable portion of marketing costs because as the number of units sold increases, the marketing expenses needed to sell those units (such as advertising or sales promotion) increase as well.

Question 13

Best products,an Atlanta based company,is in the midst of its budgeting process.It has already prepared its direct materials usage budget and is now in the process of preparing its direct material purchase budget.In addition to the details gathered to prepare the direct materials usage budget,Best also must know ________.

Accepted Answer

To prepare a direct material purchase budget, the company needs to know the level of direct material inventory to be maintained to ensure they have enough materials on hand to meet production needs without overstocking.

Question 14

Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

Accepted Answer

The cost of goods sold is calculated as: (Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory). The cost per unit is $6.80 ($2.00 + $4.00 + $0.80). The cost of goods manufactured for 20,500 units (20,000 sold + 2,500 ending - 2,000 beginning) is $139,400. The cost of goods sold is $136,000 (2,000 units x $6.80 + $139,400 - 2,500 units x $6.80).

Question 15

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
-For January,budgeted gross margin is ________.

Accepted Answer

Gross margin is calculated as sales minus cost of goods sold. For January, sales are $200,000 and cost of goods sold is 70% of sales, which is $140,000. Therefore, the gross margin is $200,000 - $140,000 = $60,000.

Question 16

Total finished units to be produced is based on the ________.

Accepted Answer

The total finished units to be produced is based on the budgeted sales units. The production needs to match the expected demand in order to optimize the use of resources and avoid overproduction or underproduction. The other options listed are important budget components but are not directly linked to determining the total finished units to be produced.

Question 17

Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for sales?

Accepted Answer

The answer of Answer the following questions using the information...

Question 18

Answer the following questions using the information below:
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 1,000 \text { units } & 1,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for sales?

Accepted Answer

The answer of Answer the following questions using the information...

Question 19

Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-What are the 2016 budgeted costs for direct materials,direct manufacturing labor,and manufacturing overhead,respectively?

Accepted Answer

The answer of Answer the following questions using the information...

Question 20

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation, a retailer:
Budgeted sales are $200,000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $150,000 in January
Marketing costs are $3,000 each month
Distribution costs are $5,000 each month
Administrative costs are $10,000 each month
-For January,the amount budgeted for the nonmanufacturing costs budget is ________.

Accepted Answer

The nonmanufacturing costs budget includes marketing, distribution, and administrative costs. For January, these are $3,000 (marketing) + $5,000 (distribution) + $10,000 (administrative) = $18,000.

Quiz 6: Master Budget and Responsibility Accounting

For next year,Roberto,Inc.,has budgeted sales of 15,000 units,targeted ending finished goods inventory of 750 units,and beginning finished goods inventory of 450 units.All other inventories are zero.How many units should be produced next year?

When direct material and direct labor is the limiting factor,revenue budgets are usually based on ________.

Which of the following is required to arrive at the budgeted units to be produced in a year?

Orange Corporation has budgeted sales of 16,000 units,targeted ending finished goods inventory of 4,000 units,and beginning finished goods inventory of 2,000 units.How many units should be produced next year?

Which of the following information is required by a company's manager while preparing a manufacturing overhead costs budget?

Antique Brass Company has budgeted sales volume of 120,000 units and budgeted production of 108,000 units,while 20,000 units are in beginning finished goods inventory.How many units are targeted for ending finished goods inventory?

Which of the following is most likely to be a cost driver for the variable portion of marketing costs?

Total finished units to be produced is based on the ________.