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Montgomery Company has developed the following flexible budget formulas for its four overhead items: Montgomery Company has developed the following flexible budget formulas for its four overhead items: Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours) ; however, this year 19,000 units were produced with the following actual costs: - Calculate the variance for maintenance using an after-the-fact flexible budget. A) $13,000 U B) $13,100 F C) $11,000 U D) $1,000 F E) None of these. Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours) ; however, this year 19,000 units were produced with the following actual costs: Montgomery Company has developed the following flexible budget formulas for its four overhead items: Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours) ; however, this year 19,000 units were produced with the following actual costs: - Calculate the variance for maintenance using an after-the-fact flexible budget. A) $13,000 U B) $13,100 F C) $11,000 U D) $1,000 F E) None of these. - Calculate the variance for maintenance using an after-the-fact flexible budget.


A) $13,000 U
B) $13,100 F
C) $11,000 U
D) $1,000 F
E) None of these.

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Which of the following is true of a static budget?


A) A static budget represents certain goals that a firm wants to achieve.
B) It divides costs into those that vary with units of production and those that are fixed with respect to unit-level drivers.
C) It ascertains how well costs were controlled during a year.
D) It is best used to create a meaningful performance report.
E) None of these is correct.

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Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October.Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month. Every month, Lambert must make the following payments: Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October.Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month. Every month, Lambert must make the following payments: In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card.Typically, the credit card bill is paid in full in the following month.September credit card purchases totaled $6,000. - In mid-October, Lambert expects to buy a new What are the total cash disbursements expected by Lambert during the month of October? A) $167,600 B) $172,100 C) $161,600 D) $55,600 E) $60,100 In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card.Typically, the credit card bill is paid in full in the following month.September credit card purchases totaled $6,000. - In mid-October, Lambert expects to buy a new What are the total cash disbursements expected by Lambert during the month of October?


A) $167,600
B) $172,100
C) $161,600
D) $55,600
E) $60,100

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Rocha & Noel Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows. Rocha & Noel Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows. Actual sales for June and budgeted sales for July, August, and September are given below. Sales are 30% for cash and 70% on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 45% of sales.The desired ending inventory is equal to 30% of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $45,000, and the monthly depreciation expenses are $7,500. What is the balance of the accounts receivable at the end of July? A) $110,000 B) $259,000 C) $360,000 D) $398,000 Actual sales for June and budgeted sales for July, August, and September are given below. Rocha & Noel Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows. Actual sales for June and budgeted sales for July, August, and September are given below. Sales are 30% for cash and 70% on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 45% of sales.The desired ending inventory is equal to 30% of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $45,000, and the monthly depreciation expenses are $7,500. What is the balance of the accounts receivable at the end of July? A) $110,000 B) $259,000 C) $360,000 D) $398,000 Sales are 30% for cash and 70% on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 45% of sales.The desired ending inventory is equal to 30% of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $45,000, and the monthly depreciation expenses are $7,500. What is the balance of the accounts receivable at the end of July?


A) $110,000
B) $259,000
C) $360,000
D) $398,000

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Identify each item as either part of the operating budget or the financial budget. -budgeted balance sheet


A) Operating Budget
B) Financial Budget

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Unique Company provided the following budgeted data for July: Unique Company provided the following budgeted data for July: What is the budgeted cost of goods sold? A) $165,000 B) $179,000 C) $214,000 D) $184,000 E) $75,000 What is the budgeted cost of goods sold?


A) $165,000
B) $179,000
C) $214,000
D) $184,000
E) $75,000

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Cash budgeting is important to which of the following?


A) retail stores
B) manufacturing firms
C) not-for-profit agencies
D) local government agencies
E) all of these

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A company plans on selling 500 units.The selling price per unit is $10.There are 60 units in beginning inventory, and the company would like to have 100 units in ending inventory.How many units should be produced for the coming period?


A) 540 units
B) 400 units
C) 365 units
D) 2,000 units
E) 2,035 units

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A company expects the following sales for the coming year: A company expects the following sales for the coming year: Budgeted sales revenue for the year is: A) $1,050,000. B) $1,260,000. C) $1,155,000. D) $1,680,000. E) It is impossible to tell from this information. Budgeted sales revenue for the year is:


A) $1,050,000.
B) $1,260,000.
C) $1,155,000.
D) $1,680,000.
E) It is impossible to tell from this information.

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Unicorn Corporation manufactures boxes.The estimated numbers of boxes sold for the first three months of the current year are as follows: Unicorn Corporation manufactures boxes.The estimated numbers of boxes sold for the first three months of the current year are as follows: Finished goods inventory at the end of December was 800 units.Ending finished goods inventory is equal to 25% of the next month's sales.Unicorn Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February? A) 4,900 boxes B) 4,200 boxes C) 4,260 boxes D) 3,900 boxes Finished goods inventory at the end of December was 800 units.Ending finished goods inventory is equal to 25% of the next month's sales.Unicorn Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February?


A) 4,900 boxes
B) 4,200 boxes
C) 4,260 boxes
D) 3,900 boxes

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In preparing the overhead budget, many companies use


A) activity-based costing.
B) multiple drivers for a simple budget.
C) participative costing.
D) a unit-based driver such as direct labor hours.
E) none of these.

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Which of the following is true of participative budgeting?


A) It always reflects operating realities such as actual levels of activity and seasonal variances.
B) It gives an opportunity to build slack into the budgets.
C) It results in achieving maximum organizational efficiency.
D) It is only in use by large firms that need to prepare cash budgets.
E) It can only be used by small firms.

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Match the following terms with the items below: -Static budget


A) Difference between the actual amount and the flexible budget amount
B) A budget that specifies costs for a range of activity
C) A budget for a particular level of activity
D) A report that compares actual with planned costs
E) ​Actual variable overhead − (SVOR × Actual hours)

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Sleepgood Company produces and sells pillows.It expects to sell 15,000 pillows in the next year and will have 1,500 pillows in finished goods inventory at the end of the current year.Sleepgood would like to complete operations next year with at least 1,350 completed pillows in inventory.There is no ending work-in-process inventory.The pillows sell for $6 each.How many pillows would be produced in the next year?


A) 10,000 pillows
B) 16,500 pillows
C) 11,250 pillows
D) 14,850 pillows

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The planned ending cash balance for the year appears on which of the following statements?


A) Budgeted income statement
B) Budgeted balance sheet
C) Production budget
D) Budgeted cash receipts
E) Budgeted cash disbursements

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Which of the following is true of a performance report?


A) In preparing a performance report, static budgets are usually a good choice for benchmarks.
B) It compares actual costs with budgeted costs from the master budget.
C) It is prepared only if the top management has only superficial participation in the budgeting process.
D) To create a meaningful performance report, a static budget should be used.
E) To create a meaningful performance report, actual costs and expected costs should be compared at different levels of activity.

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Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: - How much of June's credit sales is expected to be collected in the month of July? A) $30,000 B) $60,000 C) $36,000 D) $67,500 E) $80,000 Alpha provided information on sales as follows: Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: - How much of June's credit sales is expected to be collected in the month of July? A) $30,000 B) $60,000 C) $36,000 D) $67,500 E) $80,000 - How much of June's credit sales is expected to be collected in the month of July?


A) $30,000
B) $60,000
C) $36,000
D) $67,500
E) $80,000

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Static budgets are the best benchmarks for preparing a performance report.

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_________________ are used to ensure that budgeted costs can be realistically compared with costs for actual levels of activity.

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The basic structure of a ______________ includes cash receipts, cash disbursements, any excess or deficiency of cash, and financing.

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