Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 21, Problem 21.2CP
a.
To determine
Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.
To explain: the budgeting methods that are being used under the new approach.
b.
To determine
To explain: the reason for these methods being superior to the former approach.
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Children's Hospital of the King's Daughters Health System in Norfolk, Virginia, introduced a new budgeting method that allowed the hospital's annual plan to be updated for changes in operating plans. For example, if the budget was based on 400 patient-days (number of patients × number of days in the hospital) and the actual count rose to 450 patient-days, the variable costs of staffing, lab work, and medication costs could be adjusted to reflect this change. The budget manager stated, “I work with hospital directors to turn data into meaningful information and effect change before the month ends.”
What budgeting method is being used under the new approach?
What budgeting method do you think was being used under the old method?
I need help with a few problems from the past chapters im still stuck with.
Don't give solution in image format..
Chapter 21 Solutions
Financial & Managerial Accounting
Ch. 21 - Prob. 1DQCh. 21 - Briefly describe the type of human behavior...Ch. 21 - What behavioral problems are associated with...Ch. 21 - What behavioral problems are associated with...Ch. 21 - Under what circumstances would a static budget be...Ch. 21 - How do computerized budgeting systems aid firms in...Ch. 21 - Why should the production requirements Set forth...Ch. 21 - Prob. 8DQCh. 21 - A. Discuss the purpose of the cash budget. B. If...Ch. 21 - Give an example of how the capital expenditures...
Ch. 21 - Flexible budgeting At the beginning of the period,...Ch. 21 - Prob. 21.1BPECh. 21 - Prob. 21.2APECh. 21 - Prob. 21.2BPECh. 21 - Direct materials purchases budget My Life...Ch. 21 - Prob. 21.3BPECh. 21 - Direct labor cost budget MyLife Chronicles Inc....Ch. 21 - Prob. 21.4BPECh. 21 - Prob. 21.5APECh. 21 - Prob. 21.5BPECh. 21 - Prob. 21.6APECh. 21 - Prob. 21.6BPECh. 21 - Personal budget At the beginning of the 2016...Ch. 21 - Flexible budget for selling and administrative...Ch. 21 - Static budget versus flexible budget The...Ch. 21 - Prob. 21.4EXCh. 21 - Prob. 21.5EXCh. 21 - Prob. 21.6EXCh. 21 - Prob. 21.7EXCh. 21 - Prob. 21.8EXCh. 21 - Direct materials purchases budget Romano's Frozen...Ch. 21 - Prob. 21.10EXCh. 21 - Prob. 21.11EXCh. 21 - Direct labor cost budget Ace Racket Company...Ch. 21 - Prob. 21.13EXCh. 21 - Production and direct labor cost budgets Levi...Ch. 21 - Prob. 21.15EXCh. 21 - Cost of goods sold budget Delaware Chemical...Ch. 21 - Cost of goods sold budget The controller of...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Capital expenditures budget On January 1, 2016,...Ch. 21 - Forecast sales volume and sales budget For 2016,...Ch. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Sonoma Housewares...Ch. 21 - Budgeted income statement and balance sheet As a...Ch. 21 - Prob. 21.1BPRCh. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Mercury Shoes Inc....Ch. 21 - Prob. 21.5BPRCh. 21 - Prob. 21.1CPCh. 21 - Prob. 21.2CPCh. 21 - Static budget for a service company A bank manager...Ch. 21 - Objectives of the master budget Dominos Pizza LLC....Ch. 21 - Integrity and evaluating budgeting systems The...
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- Mellow Clinic bases its budgets on patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgetir Variable element per Fixed element per month patient-visit $60.00 Revenues Personnel expenses Medical supplies $24,000 $6.60 $2.40 $6,000 $5,000 Occupancy expenses Administrative expenses The behaviour of the revenue and expenses is valid for between 1,500 and 4,000 patient-visits per month. Required: ) Prepare a flexible budget for 2,000 and 3,000 patient-visits in a month. (14 marks) You may not need to use all the cells. Patient -visits 10 The behaviour of the revenue and expenses is valid for between 1.500 and 4,.000 patient-visits per month 11 12 Required: 13 a) Prepare a flexible budget for 2,000 and 3,000 patient-visits in a month. (14 marks) You may not need to use all the cells. 14 is Patient -visits Variable element per month 2,000 3,000 Revenues Less: variable expenses Medical supplies Occupancy expenses Total variable expenses…arrow_forwardI need help with a few problems from the past chapters im still stuck with.arrow_forwardVipul karrow_forward
- Here are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars): Static Flexible Actual Number of Surgeries 1,200 1,300 1,300 $2,400 $2,600 $2,535 Patient Revenue Salary Expense Nonsalary Expense Profit 1,200 1,300 1,365 600 650 585 $ 600 $ 650 $ 585 The center assumes that all revenues and costs are variable and hence tied directly to patient volume. a. Explain how each amount in the flexible budget was calculated. (Hint: Examine the static budget to determine the relationship of each budget line to volume.) b. Determine the variances for each line of the profit and loss statement, both in dollar terms and in percentage terms. (Hint: Each line has a total variance, a volume variance, and a price variance [for revenues] and management variance [for expenses].) c. What do the Part b results tell Brandon's managers about the surgery center's operations for the quarter?arrow_forwardDo not give solution in imagearrow_forwardCapelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below: Budgeted number of patient-visits Budgeted variable costs: Supplies (@$5.00 per patient-visit) 8,300 $ 41,500 Laundry (@$7.30 per patient-visit) 60,590 Total variable cost 102,090 Budgeted fixed costs: Wages and salaries 60,590 Occupancy costs 73,040 Total fixed cost 133,630 Total cost $235,720 The total variable cost at the activity level of 9,300 patient-visits per month should be: Multiple Choice $133,630 $114,390 $149,730 $102,090arrow_forward
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