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ACCT 434 Week 2 Quiz – DeVry

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ACCT 434 Week 2 Quiz – DeVry

1. (TCO 2) Operating budgets and financial budgets (Points : 5)

2. (TCO 2) A budget can help implement (Points : 5)

3. (TCO 2) Financial budgets include the (Points : 5)

4. (TCO 2) A feature of a standard-costing system is that the costs of every product or service planned to be worked on during the period can be computed at the start of that period. This feature of standard costing makes it possible to (Points : 5)

5. (TCO 2) An unfavorable variance indicates that (Points : 5)

6. (TCO 2) When standards are used to develop a budget, (Points : 5)

7. (TCO 2) Overhead costs have been increasing due to all of the following except (Points : 5)

8. (TCO 2) Katie Enterprises reports the year-end information from 20X8 as follows: Sales (70,000 units) $560,000; Cost of goods sold 210,000; Gross margin 350,000; Operating expenses 200,000; Operating income $150,000. Katie is developing the 20X2 budget. In 20X2, the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold for 20X2? (Points : 5)

9.(TCO 2) Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 20×2, through June 30, 20×3.
July 1, 20×2                   June 30, 20×3
Raw material (note)               40,000                          10,000
Work in process                      8,000                            8,000
Finished goods                       30,000                           5,000

(note) Three units of raw material are needed to produce each unit of finished product.
If Hester Company plans to sell 600,000 units during the 20×2-20×3 fiscal year, the number of units it would have to manufacture during the year would be (Points : 5)

10. (TCO 2) Information pertaining to Brenton Corporation’s sales revenue is presented in the following table.
February              March               April
Cash Sales             $160,000             $150,000           $120,000
Credit Sales             300,000               400,000             280,000
Total Sales         $460,000             $550,000            $400,000

Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month’s projected total sales. 11 purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton’s budgeted total cash payments in March for inventory purchases are (Points : 5)