accounting quiz with A+ answers

0. The document that charts a course of future action for a business by outlining the plans of the business in financial terms is the

1-3. The objectives of budgeting include:

1. It helps to plan for business’s growth and development over a given period of time.

2. It ensures coordination among employees.

3. It helps in efficient resource allocation.

4. Giving information to employees about their performance relative to the goals they helped establish is called

5. An organization’s budgetary unit led by a manager who has both authority over and responsibility for the unit’s performance is a

6. The budget becomes less effective as a tool for planning or controlling operations if employees view budget goals as unachievable. This occurs when the budget is set too

7. Goquik Taxi Co. establishes its budget at only one level of activity. This type of budget is called

8. The manager of the shipping department was directed to stay within the departmental budget. To accomplish this goal, the manager stopped shipping to customers for an entire month. This manager’s behavior is said to exhibit

9. A variation of fiscal-year budgeting that seeks to maintain a continuous twelve-month projection into the future is called a

10. When budgets establish lower goals than may be possible, they are said to be “padded” or contain

11. Parts Supply Co. prepares its budgets based on 23,000, 24,000, and 25,000 units of production. This type of budgeting is known as

12. Manufacturing operations require a series of budgets that are linked together in a

13–15. The production budgets are used to prepare the following budgets:

13.

14.

15.

16. The starting point in estimating the quantity of sales for each product in the sales budget is

17. The budgets that are used by managers to plan the financing, investing, and cash objectives for the firm are

18. The budget that allows management to assess the effects of the individual budgets on profits for the year is the

19. The budget that summarizes plans for acquiring fixed assets is the

20. The budget that shows expected receipts (inflows) and payments (outflows) of cash for a week, a month, or a longer period is the

PROBLEM 1—PROBLEMS

INSTRUCTIONS: Solve the following problems and record the answers in the Answers column.

0. Sales are expected to total 125,000 units, and no inventories are maintained. Production should total

1. Calculate the units to be produced, based on the following data:

Estimated units in beginning inventory 87,000

Estimated units in ending inventory 89,000

Expected units sold 750,000

2–3. Kian Inc. plans to manufacture 39,200 units of Product D. Product D is produced in Department 1, where 0.25 hour per unit is required for direct labor. Direct labor rates in Department 1 are $14 per hour

2. The hours required in Department 1 to manufacture Product D are

3. The total direct labor cost to manufacture Product D is

4–5. Sammie Co.’s accounts receivable on January 1, 2008, total $375,000.

Budgeted sales for the first three months of the year are:

January February March

$550,000 $850,000 $980,000

Lisa expects to sell 20% of its merchandise for cash. Of the

remaining 80% of the sales on account, 60% is expected to be

collected in the month of sale and the remainder in the following month.

4. Calculate Sammie’s estimated cash receipts for January

5. Calculate Sammie’s estimated cash receipts for February

6–7. Stewart Inc. uses a flexible budgeting system to plan for its manufacturing operations. The static budget for 10,000 units of production provides for direct labor at $10 per unit and variable electricity expense at $0.83 per unit. Fixed costs for the period are electric power $1,750 and supervisor salaries of $23,400.

6. Variable costs for 14,000 units of production are

7. Fixed costs for 14,000 units of production are

8. The total department costs for 15,000 units of production are