Objective type question, Cost Accounting

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1. Pardee Company plans to sell 12,000 units during the month of August. If the company has 2,500 units
on hand at the start of the month, and plans to have 2,000 units on hand at the end of the month, how
many units must be produced during the month?
Answer ______________ units [5 Points]
2. Cider Company's sales are 30% in cash and 70% on credit. Sixty % of the credit sales are collected in the
month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder
is uncollectible. The following are budgeted sales data:


Total cash receipts in April would be budgeted to be: Answer: $ ________________ [5 Points]

3. Mary - Mary Inc., bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,400 direct labor-hours will be required in January. The variable overhead rate is $4.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $77,220 per month, which includes depreciation of $9,720. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer $______________ [5 Points]
1. The selling and administrative expense budget of Spurlock Corporation is based on budgeted unit sales, which are 6,300 units for February. The variable selling and administrative expense is $9.30 per unit. The budgeted fixed selling and administrative expense is $118,440 per month, which includes depreciation of $19,530 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the February selling and administrative expense budget should be:

A. $98,910
B. $157,500
C. $58,590
D. $177,030
2. ABC Company has a cash balance of $9,000 on April 1. The company must maintain a minimum cash
balance of $6,000. During April expected cash receipts are $45,000. Expected cash disbursements
during the month total $52,000. During April the company will need to borrow:

A. $2,000
B. $4,000
C. $6,000
D. $8,000
3. The materials purchase budget:

A. is the beginning point in the budget process.
B. must provide for desired ending inventory as well as for production.
C. is accompanied by a schedule of cash collections.
D. is completed after the cash budget.
4. The budget or schedule that provides necessary input data for the direct labor budget is the:
A. raw materials purchases budget.
B. production budget.
C. schedule of cash collections.
D. cash budget.
5. The master budget process usually begins with the:
A. production budget.
B. operating budget.
C. sales budget.
D. cash budget.
6. The cash budget must be prepared before you can complete the:
A. production budget.
B. budgeted balance sheet.
C. raw materials purchases budget.
D. schedule of cash disbursements.
7. Which of the following is not a benefit of budgeting?
A. It uncovers potential bottlenecks before they occur.
B. It coordinates the activities of the entire organization by integrating the plans and objectives of the various parts.
C. It ensures that accounting records comply with generally accepted accounting principles.
D. It provides benchmarks for evaluating subsequent performance.
8. The concept of responsibility accounting means that:
A. Budgetary data should be reviewed and approved by the budget committee.
B. Budgetary data should be reviewed and approved by all levels of management.
C. An employee's performance should be evaluated only on those items under his or her control.
D. An employee's performance should be evaluated only by his or her immediate supervisor.

 


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