Homework Help is Here – Start Your Trial Now!
Business
Accounting
a.Identify the budget preparation approach used

a.Identify the budget preparation approach used

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

a.Identify the budget preparation approach used

Nicki Fenty Corporation manufactures a variety of beauty products in several departments and evaluates departments and departmental managers by comparing actual cost and output relative to the budget. Departmental managers help create the budgets and usually provide information about input quantities for materials, labor, and overhead costs. Chante Moore is the manager of the department that produces lip gloss. Chante has estimated these inputs for Lip gloss: Budget quantity per unit of output 8 pounds Input Direct materials Direct manufacturing labour 30 minutes Machine time 24 minutes The department produces about 100 units of lip gloss each day. Chante's department always gets excellent evaluations, sometimes exceeding budgeted production quantities. For each 100 units of lip gloss produced, the company uses, on average, about 48 hours of direct manufacturing labor (eight people working 6 hours each), 790 pounds of material, and 39.5 machine-hours. Top management of Nicki Fenty Corporation has decided to implement budget standards that will challenge the workers in each department, and it has asked Chante to design more challenging input standards for the production of lip gloss. Chante provides top management with the following input quantities: Budget quantity per unit of output 7.9 pounds 29 minutes Input Direct materials Direct manufacturing labour Machine time 23.6 minutes
Transcribed Image Text:Nicki Fenty Corporation manufactures a variety of beauty products in several departments and evaluates departments and departmental managers by comparing actual cost and output relative to the budget. Departmental managers help create the budgets and usually provide information about input quantities for materials, labor, and overhead costs. Chante Moore is the manager of the department that produces lip gloss. Chante has estimated these inputs for Lip gloss: Budget quantity per unit of output 8 pounds Input Direct materials Direct manufacturing labour 30 minutes Machine time 24 minutes The department produces about 100 units of lip gloss each day. Chante's department always gets excellent evaluations, sometimes exceeding budgeted production quantities. For each 100 units of lip gloss produced, the company uses, on average, about 48 hours of direct manufacturing labor (eight people working 6 hours each), 790 pounds of material, and 39.5 machine-hours. Top management of Nicki Fenty Corporation has decided to implement budget standards that will challenge the workers in each department, and it has asked Chante to design more challenging input standards for the production of lip gloss. Chante provides top management with the following input quantities: Budget quantity per unit of output 7.9 pounds 29 minutes Input Direct materials Direct manufacturing labour Machine time 23.6 minutes
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS