ACC 202 Princess Nourah University Managerial Accounting Worksheet

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ACC 202

Princess Nourah University

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choose the BEST answer: 1. Which schedule in a master budget is the key to completing all of the various schedules? a. Beginning Inventory Budget b. Production Budget © Sales Budget d. Cash Budget 2. What two aspects must a budget have in order to be effective? a. Planning and Consistency 6 Planning and Control C. Control and Flexibility d. Flexibility and Consistency What is the main principle of responsibility accounting? a. Encouraging cooperation between departments 6. Creating a flexible budget С. c. Holding managers responsible only for items under their control d. Maximizing net income 4. What type of budget is prepared via participation of members of all levels of the organization? a. Top-down b. Master Static d. Self-Imposed d 5. What is a disadvantage of participative budgets? a. Upper level executives may lack broad vision b. Budgetary slack b Motivation and morale are higher d. Estimates by lower level managers may be more accurate Page 1 of 6 mo account changes in the activity level? a. Planning Budget b. Cash Budget c. Static Budget Flexible Budget What should we use to evaluate how well costs were controlled? a. Activity variances b. Hours variances c. Spending variances d. Flexible variances 3. Which is true regarding the planning budget? a. Only valid for planned level of activity b. Should be used for performance evaluation c. Prepared subsequent to the period d. All of the above e. a & bonly f. b & conly 9. Which is an example of a favorable variance? a. Actual Revenues < Expected Revenues b) Actual Costs < Expected Costs C. Actual Costs > Expected Costs d. Expected Revenues > Actual Revenues 10. Why do we utilize standard cost variances to break out the spending variance? a. Different causes & people responsible b. To recalculate the spending variance c. Easy to do d. Tells us how the activity level affected costs 11. Which of the following is a price variance? a. Material quantity variance b. Product usage variance c. Variable overhead efficiency variance d. Labor rate variance 10 Page 2 of 6 Problems - Show your work for partial credit 12. Cooper-Hofstadter Consulting, LLP is having difficulty analyzing their performance for the third quarter of 2017 using the cost report below. Can you consult with the consultants to provide them better feedback? Cooper-Hofstadter Consulting, LLP Cost Report For the Quarter Ended September 30, 2017 Variances Planning Budget 950 $ 266,000.00 $ 6,000.00 U $ $ 23,750.00 475.00 $ $ 250.00 U 50.00 F Actual Results Consulting Hours (9) 905 Revenues ($280.00q) $ 260,000.00 Variable Expenses: Travel ($25.00q) $ 24,000.00 Supplies ($0.50q) $ 425.00 Fixed Expenses: Salaries $ 52,000.00 Depreciation $ 12,500.00 Total Expenses $ 88,925.00 Net Operating Income $ 171,075.00 $ $ $ $ 57,500.00 12,000.00 93,725.00 172,275.00 $ $ $ $ 5,500.00 F 500.00 U 4,800.00 F 1,200.00 U Required: 1. Utilizing a flexible budget, prepare a complete performance report with all necessary variances, including whether it is favorable or Unfavorable. Be sure to include appropriate column headings (15 points). 13 Vivnuto ces Sports Corp., an athletic apparel manufacturer, is currently completing its 2018 master budget. Below are meir current assumptions. Month Sales in Units January 20,000 February 17,500 March 19,000 April 21,500 May 20,000 a. One unit of apparel takes 5 yards of fabric to produce, which costs $0.75 per yard. The company pays its suppliers 40% in the month of purchase, 40% in the month following purchase, and 20% in the second month following purchase. b. The company must have on hand at the end of each month, finished goods equal to 20% of the following month's sales and raw materials equal to 15% of the following month's raw material production needs. Required: 1. Prepare the production budget (in units) for the first quarter of 2017 by month, no quarter total column necessary (6 points). 4 2. Prepare the raw material purchases budget (in units with total dollar cost, as well) for the first quarter of 2017 by month, no quarter total column necessary (12 points). 3 3. Prepare the schedule of cash disbursements for material purchases for March only (one column only) (4 points). 14. Aces Sports Corp. is an athletic apparel manufacturer. Aces is reviewing its performance during 2016 and wants to know if its spending variances were due to production or purchasing issues. The company's standard costs are outlined below, along with other information. Direct Materials Direct Labor Variable Mfg Overhead Standard Quantity/Hours 2.1 Yards 0.75 Hours 0.75 Hours Standard Price/Rate $2.25 per Yard $13.00 per Hour $3.50 per Hour Standard Cost $4.73 $9.75 $2.63 a. 50,000 yards of material were purchased during the quarter at a price of $2.15 per yard. b. 47,000 yards of material were used to produce 21,000 garments (units of finished goods). c. Variable manufacturing overhead is allocated based on direct labor hours. d. 15,000 direct labor hours were worked totaling $205,000. e. Total variable manufacturing overhead for the quarter was $60,000. Required: 1. Compute the price and quantity variances and overall spending variance for direct materials and label them correctly (8 points). 8 2. Compute the price and quantity variances and overall spending variance for variable manufacturing overhead and label them correctly (8 points). 5
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Question 1
c) sales budget
All the other parts of the master budget depend on the information from the sales budget
such as the sales units and sales price.
Question 2
b) planning and control
A master budget is used for planning and control. It should, thus, demonstrate those
aspects.
Question 3
c) Holding mangers responsible only for items under their control
Question 4
d) self-imposed
Question 5
b) budgetary slack
In participat...


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