When a company is preparing a budgeted statement of cash flows

QUESTION

19) When a company
is preparing a budgeted statement of cash flows, the payments for selling and
administrative expenses can be obtained from the ________.

A)
budgeted payments for direct materials purchases
B)
sales budget
C)
cash budget
D)
budgeted balance sheet

20)
A company has prepared the operating budget, the cash budget, and the budgeted
income statement and is now preparing the budgeted balance sheet. The balance
of Retained Earnings can be taken from the ________.

A)
inventory, purchases, and cost of goods sold budget
B)
operating budget
C)
cash budget
D)
budgeted income statement and the balance sheet of the previous year

21) Kevin Couriers Company prepared the following static
budget for the year:

Static Budget

Units/Volume

5,000

Per Unit

Sales Revenue

$7.00

$35,000

Variable Costs

1.00

5,000

Contribution Margin

30,000

Fixed Costs

3,000

Operating Income/(Loss)

$27,000

If a flexible budget is prepared at a volume of 7,800,
calculate the amount of operating income. The production level is within the
relevant range.

A)
$43,800
B)
$27,000
C)
$7,800
D)
$3,000

22)
Underwater Sports Equipment Company projected sales of 79,000 units at a unit
sales price of $12 for the year. Actual sales for the year were 75,000 units at
$14 per unit. Variable costs were budgeted at $3 per unit, and the actual
amount was $5 per unit. Budgeted fixed costs totaled $387,000, while actual fixed
costs amounted to $450,000. What is the flexible budget variance for variable
costs?

A)
$158,000 unfavorable
B)
$150,000 unfavorable
C)
$150,000 favorable
D)
$158,000 favorable

23)
Which of the following best describes a standard?

A)
a sales price, cost, or quantity that is expected under normal conditions
B)
costs incurred to produce a product
C)
budgeted amount for total product cost
D)
actual sales price, cost, or quantity

24)
A company is setting its direct materials and direct labor standards for its
leading product. Direct materials cost from the supplier are $9 per square
foot, net of purchase discount. Freight-in amounts to $0.40 per square foot.
Basic wages of the assembly line personnel are $14 per hour. Payroll taxes are
approximately 21% of wages. Benefits amount to $2 per hour. How much is the
direct materials cost standard per square foot?

A)
$9.40
B)
$9.00
C)
$16.00
D)
$25.00

25)
Emerald Marine Stores Company manufactures special metallic materials and
decorative fittings for luxury yachts that require highly skilled labor.
Emerald uses standard costs to prepare its flexible budget. For the first
quarter of the year, direct materials and direct labor standards for one of
their popular products were as follows:

Direct
materials: 4 pounds per unit; $6 per pound
Direct
labor: 2 hours per unit; $17 per hour

During
the first quarter, Emerald produced 4,000 units of this product. Actual direct
materials and direct labor costs were $65,000 and $329,000, respectively.

For
the purpose of preparing the flexible budget, calculate the total standard
direct materials cost at a production volume of 4,000 units.

A)
$96,000
B)
$65,000
C)
$16,000
D)
$24,000

26)
What does a favorable direct materials cost variance indicate?

A)
The actual quantity of direct materials used was less than the standard
quantity.
B)
The actual cost of direct materials purchased was less than the standard cost
of direct materials purchased.
C)
The actual cost of direct materials purchased was greater than the standard
cost of direct materials purchased.
D)
The actual quantity of direct materials used was greater than the standard
quantity.

27)
Discount Sales Company uses a standard cost system. Variable overhead costs are
allocated based on direct labor hours. In the first quarter, Discount Sales had
a favorable cost variance for variable overhead costs. Which of the following
scenarios is a reasonable explanation for this variance?

A)
The actual number of direct labor hours was lower than the budgeted hours.
B)
The actual variable overhead costs were higher than the budgeted costs.
C)
The actual variable overhead costs were lower than the budgeted costs.
D)
The actual number of direct labor hours was higher than the budgeted hours.

28)
Zenith Fashions uses standard costs for their manufacturing division. From the
following data, calculate the fixed overhead cost variance.

Actual
fixed overhead $32,000
Budgeted
fixed overhead $24,000
Standard
overhead allocation rate $8
Standard
direct labor hours per unit 3 DLHr
Actual
output 2,500 units

A)
$36,000 F
B)
$36,000 U
C)
$8,000 F
D)
$8,000 U

29)
Which of the following is not a flexible budget variance?

A)
total fixed overhead variance
B)
total variable overhead variance
C)
total direct materials variance
D)
total direct labor variance

30)
The management of Chung Fire Alarms has calculated the following variances:

Direct
materials cost variance $8,000 U
Direct
materials efficiency variance 40,000 F
Direct
labor cost variance 15,000 F
Direct
labor efficiency variance 13,500
U
Total
variable overhead variance 8,500 F
Total
fixed overhead variance 3,500 F

What
is the total direct labor variance of the company?

A)
$15,000 F
B)
$12,000 F
C)
$28,500 F
D)
$1,500 F

Short answer problems 5 pts.each

31)
Complete the statement, using the following terms: increase, decrease, or have
no effect on.
Increases
in total fixed cost ________ contribution margin per unit and ________ the
breakeven point.

32)
List the three sections of the cash budget.

33)
List the direct materials variances, and briefly describe each.

34)
The following information relates to Regency Manufacturing’s overhead costs for
the month:

Static
budget variable overhead $14,200
Static
budget fixed overhead $5,600
Static
budget direct labor hours 1,000
hours
Static
budget number of units 5,000 units

Regency
allocates manufacturing overhead to production based on standard direct labor
hours.

Regency
reported the following actual results for last month: actual variable overhead,
$14,500; actual fixed overhead, $5,400; actual production of 4,700 units at
0.22 direct labor hours per unit. The
standard direct labor time is 0.20 direct labor hours per unit.

Compute
the variable overhead cost variance. (Round the answer to the nearest dollar.)

ANSWER

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