Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 7, Problem 11PA
Prepare a flexible budgeted income for 120,000 units using the following information from a static budget for 100,000 units:
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Use the given data shown in the graph.
A. What is the budgeted fixed cost per period?
B. What is the budgeted variance cost per unit?
C. What is the value of F (that is, the flexible budget for an activity of 8,000 units)?
D. What is the flexible budget cost amount if the actual activity had been 16,000 units?
On the production budget, the number of units to be produced is computed as
Select one:
a.
unit sales + desired end inventory + beginning inventory.
b. unit sales - desired end inventory - beginning inventory.
c. unit sales - desired end inventory + beginning inventory.
d. unit sales + desired end inventory - beginning inventory.
e. unit sales - cost of goods sold + beginning inventory.
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Prepare a flexible budget management report indicating the activity variance and revenue and spending variance using the given information. You may use the formula in excel file practice set.
Chapter 7 Solutions
Principles of Accounting Volume 2
Ch. 7 - Which of the following is not a part of budgeting?...Ch. 7 - Which of the following is an operating budget? A....Ch. 7 - Which of the following is a finance budget? A....Ch. 7 - Which approach is most likely to result in...Ch. 7 - Which approach requires management to justify all...Ch. 7 - Which of the following is true in a bottom-up...Ch. 7 - The most common budget is prepared for a...Ch. 7 - Which of the operating budgets is prepared first?...Ch. 7 - The direct materials budget is prepared using...Ch. 7 - Which of the following is not an operating budget?...
Ch. 7 - Which of the following statements is not correct?...Ch. 7 - The units required in production each period are...Ch. 7 - The cash budget is part of which category of...Ch. 7 - Which is not a section of the cash budget? cash...Ch. 7 - Which budget is the starting point in preparing...Ch. 7 - Which of the following includes only financial...Ch. 7 - Which budget evaluates the results of operations...Ch. 7 - What is the main difference between static and...Ch. 7 - What is a budget and what are the different types...Ch. 7 - What is the difference between budgeting and...Ch. 7 - What are the advantages and disadvantages of the...Ch. 7 - Why might a rolling budget require more management...Ch. 7 - What information is necessary for the operating...Ch. 7 - What operating budget exists for manufacturing but...Ch. 7 - What is the process for developing a budgeted...Ch. 7 - Which of the financial budgets is the most...Ch. 7 - A company has prepared the operating budget and...Ch. 7 - Fill in the blanks: A flexible budget summarizes...Ch. 7 - What information is included in the capital asset...Ch. 7 - Why does budget planning typically begin with the...Ch. 7 - What steps should be considered it a budget is to...Ch. 7 - Blue Book printing is budgeting sales of 25,000...Ch. 7 - How many units are in beginning inventory it...Ch. 7 - Navigator sells GPS trackers for $50 each. It...Ch. 7 - One Device makes universal remote controls and...Ch. 7 - Sunrise Poles manufactures hiking poles and is...Ch. 7 - Given the following information from Rowdy...Ch. 7 - Each unit requires direct labor of 2.2 hours. The...Ch. 7 - How many units are estimated to be sold it...Ch. 7 - Cash collections for Wax On Candles found that 60%...Ch. 7 - Nonnas Re-Appliance Store collects 55% of its...Ch. 7 - Dream Big Pillow Co. pays 65% of its purchases in...Ch. 7 - Desiccate purchases direct materials each month....Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Halifax Shoes has 30% of its sales in cash and the...Ch. 7 - Cold X, Inc. uses this information when preparing...Ch. 7 - Using the provided budgeted information for...Ch. 7 - The production cost for a waterproof phone case is...Ch. 7 - Lovely Wedding printing is budgeting sales of...Ch. 7 - How many units are in beginning inventory if...Ch. 7 - Barnstormer sells airplane accessories for $20...Ch. 7 - Rehydrator makes a nutrition additive and expects...Ch. 7 - Cloud Shoes manufactures recovery sandals and is...Ch. 7 - Given the following information from Power...Ch. 7 - Each unit requires direct labor of 4.1 hours. The...Ch. 7 - How many units are estimated to be sold if Kino,...Ch. 7 - Cash collections for Renew Lights found that 65%...Ch. 7 - My Aunts Closet Store collects 60% of its accounts...Ch. 7 - Gear Up Co. pays 65% of its purchases in the month...Ch. 7 - Drainee purchases direct materials each month. Its...Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Earthies Shoes has 55% of its sales in cash and...Ch. 7 - Judges Gavel uses this information when preparing...Ch. 7 - Using the following budgeted information for...Ch. 7 - The production cost for UV protective sunglasses...Ch. 7 - Lens Junction sells lenses for $45 each and is...Ch. 7 - The data shown were obtained from the financial...Ch. 7 - Echo Amplifiers prepared the following sales...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Spree Party Lights overhead expenses are: Prepare...Ch. 7 - Relevant data from the Poster Companys operating...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Direct labor hours are estimated as 2,000 in...Ch. 7 - Fitbands estimated sales are: What are the...Ch. 7 - Sports Socks has a policy of always paying within...Ch. 7 - Prepare a flexible budgeted income for 120,000...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Caribbean Hammocks currently sells 75.000 units at...Ch. 7 - Total Pops data show the following information:...Ch. 7 - Identify the document that contains the...Ch. 7 - Titanium Blades refines titanium for use in all...Ch. 7 - Lens & Shades sells sunglasses for $37 each and is...Ch. 7 - The following data were obtained from the...Ch. 7 - TIB makes custom guitars and prepared the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Relevant data from the operating budget of The...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Mesa Aquatics, Inc. estimated direct labor hours...Ch. 7 - Amusement tickets estimated sales are: What are...Ch. 7 - All Temps has a policy of always paying within the...Ch. 7 - Prepare a flexible budgeted income statement for...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Artic Camping Gears currently sells 35,000 units...Ch. 7 - Prob. 14PBCh. 7 - Identify the document that contains the...Ch. 7 - Replenish sells shampoo that removes chlorine from...Ch. 7 - Why is a clear understanding of managements goals...Ch. 7 - It is proper budgeting procedure to begin with...Ch. 7 - How would a human resources department use...Ch. 7 - How would maintenance departments use information...Ch. 7 - How might service industries predict revenue?Ch. 7 - The management of Hess, Inc., is developing a...Ch. 7 - When would a static budget be effective in...Ch. 7 - If management is being evaluated on their ability...Ch. 7 - If management is being evaluated on their ability...
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- Prepare a flexible budgeted income statement for 47,000 units using the following information from a static budget for 45,000 units:arrow_forwardUsing the following per-unit and total amounts, prepare a flexible budget at the 14,000-, 15,000-, and 16,000-unit levels of production and sales for Natural Products Inc.:arrow_forwardUsing the following budgeted information for production of 5,000 and 12,000 units, prepare a flexible budget for 9,000 units.arrow_forward
- Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for the upcoming year. Past trends have indicated the following dollars were spent at three different levels of output: In establishing a budget for 14,000 units, Taylor should treat A, B, and C costs as: a. semivariable, fixed, and variable, respectively. b. variable, fixed, and variable, respectively. c. semivariable, semivariable, and semivariable, respectively. d. variable, semivariable, and semivariable, respectively.arrow_forwardJudges Gavel uses this information when preparing their flexible budget: direct materials of $3 per unit, direct labor of $2.50 per unit, and manufacturing overhead of $1.25 per unit. Fixed costs are $49,000. What would be the budgeted amounts for 33,000 and 35,000 units?arrow_forwardCold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per unit, direct labor of $3 per unit, and manufacturing overhead of $1 per unit. Fixed costs are $35,000. What would be the budgeted amounts for 20,000 and 25,000 units?arrow_forward
- Given the following information from Power Enterprises direct materials budget, how much direct materials needs to be purchased?arrow_forwardFinch Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Number of units Finch planned to make and sell 31,000 copies of the book. Required: a.-d. Prepare the pro forma Income statement that would appear in the master budget and also flexible budget Income statements. assuming production volumes of 30,000 and 32,000 units. Determine the sales and variable cost volume variances, assuming volume Is actually 32.000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (1.e.. zero varlance).) Variable manufacturing costs $36.30 8.40 3.88 5.70 6.50 Fixed costs $127,000 49,000 Master Budget 31,000 $ 0 0 $ Flexible Budgets 30,000 0 $ 32,000 Volume Variancesarrow_forwardWhat is the basic difference between a master budget and a flexible budget? Master budget is for five year period and flexible budget is for one year period. Master budget is on financial terms and flexible budget is on quantitative terms. Master budget is for specific capacity and flexible budget is for multiple capacity. Master budget is prepared on actuals and flexible budget is based on standards. Submit You have used 0 of 2 Save attemptsarrow_forward
- Ghuarrow_forwardThe standard labour budget for CTF of 800 units with detail information as follows: 3hours/unit and $12 per labour hour. The actual labour budget of 1,000 units with detail information as follows: 2,6hours/unit and 13$/labour hour. Analyse the direct labour costs variance → Do we need to set up a flexible budget in this case? Why?arrow_forwardUsing the incomplete Flexible Budget Performance Report below, calculate the total fixed costs on the Flexible Budget (at 120 hours). Master Budget (100 hours) Flexible Budget (120 hours) Sales Revenue $2,000 ? Total Variable Costs $200 ? Total Fixed Costs $600 ? Total Fixed Costs at 120 hours =arrow_forward
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