Horngren's Accounting, The Financial Chapters, Student Value Edition (11th Edition)
11th Edition
ISBN: 9780133876352
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem S23.1SE
Matching terms
Learning Objective 1
Match each tern to the correct definition.
| Terms | Definitions |
| a. Flexible budget b. Flexible budgetvariance c. Sales volume variance d. Static budget e. Variance |
1. A summarized budget for several levels of volume that separates variable costs from fixed costs. 2. A budget prepared for only one level of sales. 3. The difference between an actual amount and the budgeted amount. 4. The difference arising because the company actually earned more or less revenue, or incurred more or less cost, than expected for the actual level ofoutput. 5. The difference arising only because the number of units actually sold differs from the static budget units. |
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Students have asked these similar questions
Match the definition the term.
Terms:
Cost variance
Overhead cost variance
Price variance
Quantity variance
Standard costs
Sales budget
Production Budget
Balanced scorecard
Profit center
Cost center
Definitions:
1. A plan showing the units of goods to be sold and sales to be derived; usually starting pointing the budgeting process.
2. A system of performance measures, including the nonfinancial measures, used to asses manager performance.
3. A department that incurs cost and genrate revenues, such as a selling department
4. The difference between actual and budgeted sales or cost caused by the difference between the actual per unit and the budgeted price per unit.
5. The difference between actual cost and standard cost, made up of a price variance and a quantity variance.
6. The difference between the total overhead cost actually incurred and the total overhead cost applied to products
7. The difference between the actual budgeted cost caused by…
Management Accounting
Question (Qualitative Short Answer)
a. Why is the sales forecast the starting point in budgeting?
b. What is a perpetual budget?
c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why?
d. The materials price variance can be computed at what two different points in time? Which point is better and why?
e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances?
f. Distinguish between ideal and practical standards.
g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ?
h. What is likely the most effective way to reduce a company's total quality costs?
i. What are the three main uses of quality cost reports?
Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,000 tires at a variable cost of $73 per tire and total fixed costs
of $57,000. The budgeted selling price was $111 per tire. Actual results in August 2020 were 2,700 tires manufactured and sold at a selling price of $113 per tire. The actual total variable costs were
$218,700, and the actual total fixed costs were $53,500.
Read the requirements
Requirement 1. Prepare a performance report with a flexible budget and a static budget
Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a 10 balance, make sure
to enter "0" in the appropriate field. If the variance is zero, do not select a label)
Units sold
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income
Actual
Results
Chapter 23 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition (11th Edition)
Ch. 23 - Prob. 1QCCh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - The person probably most responsible for the...
Ch. 23 - HajorNet System’s static budget predicted...Ch. 23 - What is a variance?Ch. 23 - Explain the difference between a favorable and an...Ch. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - How is a flexible budget used?Ch. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - What is a standard cost system?Ch. 23 - Explain the difference between a cost standard and...Ch. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - List the direct labor variances, and briefly...Ch. 23 - List the variable overhead variances, and briefly...Ch. 23 - List the fixed overhead variances, and briefly...Ch. 23 - How is the fixed overhead volume variance...Ch. 23 - What is management by exception?Ch. 23 - List the eight product variances and the manager...Ch. 23 - Briefly describe how journal entries differ in a...Ch. 23 - What is a standard cost income statement?Ch. 23 - Matching terms Learning Objective 1 Match each...Ch. 23 - Prob. S23.2SECh. 23 - Prob. S23.3SECh. 23 - Matching terms Learning Objective 2 Match each...Ch. 23 - Identifying the benefits of standard costs...Ch. 23 - Prob. S23.6SECh. 23 - Prob. S23.7SECh. 23 - Interpreting material and labor variances Learning...Ch. 23 - Prob. S23.9SECh. 23 - Prob. S23.10SECh. 23 - Prob. S23.11SECh. 23 - Prob. S23.12SECh. 23 - Prob. S23.13SECh. 23 - Prob. S23.14SECh. 23 - Prob. E23.15ECh. 23 - Prob. E23.16ECh. 23 - Prob. E23.17ECh. 23 - Prob. E23.18ECh. 23 - Prob. E23.19ECh. 23 - Prob. E23.20ECh. 23 - Prob. E23.21ECh. 23 - Prob. E23.22ECh. 23 - Preparing journal entries Hayesvillc Company uses...Ch. 23 - Prob. E23.24ECh. 23 - Prob. P23.25APGACh. 23 - Preparing a flexible budget computing standard...Ch. 23 - Prob. P23.27APGACh. 23 - P23-28A Computing and journalizing standard cost...Ch. 23 - Prob. P23.29APGACh. 23 - Prob. P23.30BPGBCh. 23 - Preparing a flexible budget computing standard...Ch. 23 - P23-32B Computing standard cost variances and...Ch. 23 - P23-33B Computing and journalizing standard cost...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Prob. P23.35CPCh. 23 - Decision Case 23-1 Suppose you manage the local...Ch. 23 - Fraud Case 23-1 Drew Castello, general manager of...
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- Which of the following budgets allows for adjustments in activity levels? a. flexible budgetb. zero-based budgetc. continuous budgetd. static budget Selected Answer: C. Carrow_forwardQ - 5: static budget? Also explain characteristics' of flexible budget. Q- 6: what is a flexible budget and how does it differ from a Distinguish between Traceable Cost and common Cost and give examples of each. Whot ig moont hy Trongfor prico ond why trongforarrow_forward1. Describe the difference between a static and a flexible budget 2. Outline how often businesses must report GST 3. Describe a method that can be used to evaluate a budget or financial plan.arrow_forward
- Distinguish among a budget, a performance report, and a variance. Question content area bottom Part 1 A. A budget measures the differences between a performance report and a variance; a performance report compares actual results with the budget; and a variance is a quantitative expression of a plan of action. B. A budget compares the performance report with variances; a performance report measures the differences between budget and actual; and a variance is a quantitative expression of a plan of action. C. A budget compares actual results with the performance report; a performance report is a quantitative expression of a plan of action; and a variance measures the differences between budget and actual. D. A budget is a quantitative expression of a plan of action; a performance report compares actual results with the budget; and a variance measures the differences between budget and actual.arrow_forwardSales budget is a forecast expressed in Select one: a. Quality and Money O b. None of the above c. Units and Money O d. Taxes to be paid on sales revenuearrow_forwardSelect - Paragraph Styles 8. Which of the following is the best way to compensate for inadequate segregation of duties? Editing a. Direct involvement of owners in key functions. b. Maintaining sound recruiting schemes. c. Giving chronological numbers for all source documents. d. Preparing budgets and performance reports. 9. Which of the following is an example of reducing uncertainty by which information improves decision making? a. A cost report with large variances. b. Setting prices and determining credit policies. c. Selecting a new marketing strategy due to the failure of a particular strategy. d. None of the above. 10. The proliferation of master files results in: a significant increase in the number of master files that organization created. b. the advantage to obtain an organization-wide view of the data. c. the advantage to effectively integrate data stored in different files. d. that different data were stored in two or more separate master file. a. 11. Which of the following…arrow_forward
- Matching terms Match each term to the correct definition.arrow_forward33)arrow_forwardEstimating the effects of changes in budget assumptions, such as determining the impact of an increase or decrease in sales, is called: Question 4 options: static budget analysis. sensitivity analysis. variance analysis, cost reduction analysis. (Ch 10) An advantage of a flexible budget is that it: Question 5 options: allows comparison of actual costs to master (static) budget costs. considers only variable costs. allows comparisons of actual costs to the costs that should have been incurred, given the level of sales. allows management freedom in meeting profitability goals.arrow_forward
- A flexible budget ( check all that apply): a. Separates variable costs from fixed costs b. Shows reevenues and expenses for varous levels of sales volume c. Reports variable costs on a per unit basis d. Reports fixed costs on a oer unit basisarrow_forwardIndicate whether the item below is used as key performance indicators for the areas of (A) Financial, (B) Customer, (C) Internal Process, or (D) Learning and Growth performance. Choose the one best choice. Quantity variance on a cost report *(A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.arrow_forwardIdentify if the following statements are TRUE or FALSE. 1. Operating budgets and financial budgets are prepared after the master budget. 2. In setting profit objectives, management must consider sales volume required to meet all costs, dividends, and retained earnings requirements 3. Zero-based budgeting includes variable costs only.arrow_forward
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