Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 7, Problem 6P
Preparing a flexible budget
Use the information in Figure 7-12 of the chapter.
Required:
Prepare flexible budgets for the production and sale of 29,000 units and 31,000 units, respectively.
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There are various budgets in the budgeting process. Once of these budgets is the production budget. Which of the following best describes the production budget?
Question 14 options:
It details the required direct labour hours
It details the required raw materials purchases
It is calculated based on the sales budget and the desired ending inventory
It summarizes the costs of producing units for the budget period.
Marigold manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets:
2,690 canoes, 3,340 canoes, and 3,880 canoes, Canoes sell for $950 each. The standard variable cost information for a canoe is as
follows.
Direct materials
Direct labor
Variable overhead
Utilities
Indirect material
Indirect labor
Total
Insurance
$264
Rent
110
Total
35
30
Annual fixed overhead cost is expected to be:
60
Maintenance $ 21,700
Depreciation
43,000
29,600
32,380
$ 126,680
$ 499
3. Using the format demonstrated in your textbook - Prepare the
following budgets (be sure to show/demonstrate ALL calculations
- include quarterly AND yearly totals) in excel or google drive:
a. production budget
b. direct materials budget
c. direct labor budget
d. manufacturing overhead budget
e. selling and administrative budget
Chapter 7 Solutions
Principles of Cost Accounting
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - Prob. 4QCh. 7 - Explain zero-based budgeting and how it differs...Ch. 7 - Prob. 6QCh. 7 - Which operating budget must be prepared before the...Ch. 7 - Prob. 8QCh. 7 - Why is it important to have front-line managers...Ch. 7 - If the sales forecast estimates that 50,000 units...
Ch. 7 - What are the advantages and disadvantages of each...Ch. 7 - What three operating budgets can be prepared...Ch. 7 - Prob. 13QCh. 7 - What are the three budgets that are needed in...Ch. 7 - Why might Web-based budgeting be more useful than...Ch. 7 - What is a flexible budget?Ch. 7 - Why is a flexible budget better than a master...Ch. 7 - Why is it important to distinguish between...Ch. 7 - Why is the concept of relevant range important...Ch. 7 - In comparing actual sales revenue to flexible...Ch. 7 - How would you define the following? a. Theoretical...Ch. 7 - Is it possible for a factory to operate at more...Ch. 7 - If a factory operates at 100% of capacity one...Ch. 7 - How is the standard cost per unit for factory...Ch. 7 - When allocating service department costs to...Ch. 7 - The sales department of Macro Manufacturing Co....Ch. 7 - The sales department of F. Pollard Manufacturing...Ch. 7 - Barnes Manufacturing Co. forecast October sales to...Ch. 7 - Prepare a cost of goods sold budget for the Crest...Ch. 7 - Prepare a cost of goods sold budget for MacLaren...Ch. 7 - Roman Inc. has the following totals from its...Ch. 7 - Starburst Inc. has the following items and amounts...Ch. 7 - Using the following per-unit and total amounts,...Ch. 7 - Cortez Manufacturing, Inc. has the following...Ch. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Calculating factory overhead The normal capacity...Ch. 7 - The Sales Department of Minimus Inc. has forecast...Ch. 7 - Sales, production, direct materials, direct labor,...Ch. 7 - Budgeted selling and administrative expenses for...Ch. 7 - Prob. 4PCh. 7 - Selling and administrative expense budget and...Ch. 7 - Preparing a flexible budget Use the information in...Ch. 7 - Preparing a performance report Use the flexible...Ch. 7 - Preparing a performance report Use the flexible...Ch. 7 - Flexible budget for factory overhead Presented...Ch. 7 - Prob. 10PCh. 7 - Overhead application rate Creole Manufacturing...Ch. 7 - Overhead application rate Roll Tide Manufacturing...Ch. 7 - Flexible budgeting, performance measurement, and...
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