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Jermaine Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012, is as follows: Jermaine Company is developing its budgets for 2013 and for the first time will use the Kaizen approach. The initial 2013 income statement, based on static data from 2012, is as follows: Selling prices for 2013 are expected to increase by 8 percent, and sales volume in units will decrease by 10 percent. The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit. Other than amortization, all other operating costs are expected to decline by 5 percent. Required: Prepare a Kaizen-based budgeted income statement for 2013. Selling prices for 2013 are expected to increase by 8 percent, and sales volume in units will decrease by 10 percent. The cost of goods sold as estimated by the Kaizen approach will decline by 10 percent per unit. Other than amortization, all other operating costs are expected to decline by 5 percent. Required: Prepare a Kaizen-based budgeted income statement for 2013.

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A budget is limited in that it can only cover financial aspects of plans.

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Mannock Company budgeted $400,000 for employee training, but actually spent only $300,000. Which of the following statements is the best course of action for management to take in this instance?


A) Because this $100,000 variance is favourable, management does not need to investigate further.
B) Management will investigate this $100,000 favourable variance to ensure that the cost savings do not reflect a reduction in programming.
C) Management will investigate this $100,000 favourable variance to try to identify and correct the problem with budgeting system.
D) Management should not investigate every variance, especially the favourable ones.
E) Management should hold a meeting with the budget department and the training department to ensure that next year's budget is more realistic.

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Activity-based budgeting is a strategy


A) used to determine production targets.
B) that requires budgeting each functional organizational unit.
C) that requires determining the budgetary slack for the activity being measured.
D) that does not require an understanding of value added activities.
E) that focuses on the cost of activities necessary to produce and sell products and services.

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Describe the concept of kaizen budgeting.

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Kaizen budgeting explicitly incorporates...

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What will be Country Heather's cost of goods sold?


A) $122,400
B) $136,000
C) $139,400
D) $149,600
E) $101,500

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What will be Berry's Boxes budgeted revenue?


A) $54,000
B) $60,000
C) $78,000
D) $79,500
E) $72,000

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What will be Berry's Boxes cost of goods sold in 2012?


A) $42,000
B) $24,000
C) $38,000
D) $30,000
E) $34,000

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Budgeting is done in place of "strategic analysis."

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Clare's Bears manufactures stuffed bears. The company updates it annual budget every month in order to force management to think about the forthcoming 12 months and not just the current budget. This is an example of a


A) master budget.
B) moving budget.
C) target budget.
D) timing budget.
E) rolling budget.

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For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units. All other inventories are zero. How many units should be produced?


A) 39,200 units
B) 40,000 units
C) 41,800 units
D) 42,800 units
E) 40,800 units

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Use the information below to answer the following question(s) . Layne Cedar manufactures cedar chests. The estimated number of chests for the first three months of 2012 is as follows: Use the information below to answer the following question(s) . Layne Cedar manufactures cedar chests. The estimated number of chests for the first three months of 2012 is as follows: Finished goods inventory at the end of December is 3,000 units. Ending finished goods are equal to 30 percent of next month's sales. April 2012 sales are expected to total 16,000 units. -How many chests should be budgeted to be produced in the first quarter of 2012? A) 37,000 chests B) 44,800 chests C) 41,800 chests D) 38,800 chests E) 48,400 chests Finished goods inventory at the end of December is 3,000 units. Ending finished goods are equal to 30 percent of next month's sales. April 2012 sales are expected to total 16,000 units. -How many chests should be budgeted to be produced in the first quarter of 2012?


A) 37,000 chests
B) 44,800 chests
C) 41,800 chests
D) 38,800 chests
E) 48,400 chests

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Manufacturing overhead costs for the budget include


A) factory utility costs.
B) direct materials and supervision.
C) direct labour and direct materials.
D) sales supervisors' salaries.
E) direct labour and indirect labour.

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Barrieland Merchandising Firm is developing its budgets for 2012. The 2011 income statement is as follows: Barrieland Merchandising Firm is developing its budgets for 2012. The 2011 income statement is as follows: Operating expenses (includes Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent. The cost of goods sold as a percent of sales will increase to 62 percent. Other than amortization, all operating costs are variable. Required: Prepare a budgeted income statement for 2012. Operating expenses (includes Barrieland Merchandising Firm is developing its budgets for 2012. The 2011 income statement is as follows: Operating expenses (includes Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent. The cost of goods sold as a percent of sales will increase to 62 percent. Other than amortization, all operating costs are variable. Required: Prepare a budgeted income statement for 2012. Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent. The cost of goods sold as a percent of sales will increase to 62 percent. Other than amortization, all operating costs are variable. Required: Prepare a budgeted income statement for 2012.

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Answer the following question(s) using the information below. Furniture Inc. estimates the following number of mattress sales for the first four months of 2013: Answer the following question(s) using the information below. Furniture Inc. estimates the following number of mattress sales for the first four months of 2013: Finished goods inventory at the end of December 2012 is 1,500 units. Target ending finished goods inventory is 30% of the next month's sales. -How many mattresses need to be produced in January 2013? A) 4,400 mattresses B) 5,000 mattresses C) 6,500 mattresses D) 7,100 mattresses E) 5,600 mattresses Finished goods inventory at the end of December 2012 is 1,500 units. Target ending finished goods inventory is 30% of the next month's sales. -How many mattresses need to be produced in January 2013?


A) 4,400 mattresses
B) 5,000 mattresses
C) 6,500 mattresses
D) 7,100 mattresses
E) 5,600 mattresses

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The major types of responsibility centres are


A) profit, non-profit, and governmental.
B) profit, sales, and direct cost.
C) revenue, profit, income, and cost.
D) revenue, profit, cost, and investment.
E) profit, indirect cost, and investment.

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D

Use the information below to answer the following question(s) . Copper Corporation has the following sales budget for the last six months of 2012: Use the information below to answer the following question(s) . Copper Corporation has the following sales budget for the last six months of 2012: Historically, the cash collection of sales has been as follows: -Cash collections for October are A) $117,000. B) $184,800. C) $199,000. D) $176,400. E) $174,000. Historically, the cash collection of sales has been as follows: Use the information below to answer the following question(s) . Copper Corporation has the following sales budget for the last six months of 2012: Historically, the cash collection of sales has been as follows: -Cash collections for October are A) $117,000. B) $184,800. C) $199,000. D) $176,400. E) $174,000. -Cash collections for October are


A) $117,000.
B) $184,800.
C) $199,000.
D) $176,400.
E) $174,000.

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The budgeting process generally concludes with the preparation of the


A) cash budget.
B) selling expense budget.
C) budgeted financial statements.
D) research and development budget.
E) production budget.

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Use the information below to answer the following question(s) . Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2012 is as follows: Use the information below to answer the following question(s) . Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2012 is as follows: Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales. January and February 2013 sales are anticipated to be 15,000 futons in each month. The cost to produce a futon is $125. -What should be the number of futons Contempo Futon budgets to be produced in November? A) 34,000 futons B) 32,500 futons C) 26,200 futons D) 25,000 futons E) 23,000 futons Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales. January and February 2013 sales are anticipated to be 15,000 futons in each month. The cost to produce a futon is $125. -What should be the number of futons Contempo Futon budgets to be produced in November?


A) 34,000 futons
B) 32,500 futons
C) 26,200 futons
D) 25,000 futons
E) 23,000 futons

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The value of budgets to managers in their strategic analysis and planning is enhanced by


A) value based budgeting.
B) conducting sensitivity analysis.
C) the lines of responsibility in the value chain.
D) the current organizational structure.
E) the operating plan.

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