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Exam 19: Introduction to Managerial Accounting and the Master Budget

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Question 71

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Advertising and marketing costs are included in manufacturing overhead.

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Question 72

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A retailing company's budgeted income statement includes the following data: $\begin{array}{|l|l|l|l|l|}\hline \begin{array}{l}\text { Data extracted from budgeted } \\\text { Income statement }\end{array} & \text { Mar } & \text { Apr } & \text { May } & \text { Jun } \\\hline \text { Sales } & \$ 140,000 & \$ 100,000 & \$ 130,000 & \$ 95,000 \\\hline \begin{array}{l}\text { Commission expense }(20 \% \text { of } \\\text { sale) }\end{array} &28,000 & 20,000 & 26,000 & 19,000 \\\hline \text { Salaries expense } & 32,000& 32,000& 32,000& 32,000 \\\hline \text { Miscellaneous expense }-6 \% \text { of } \\ \text { sales } & 8400 & 6000 & 7800 & 5700 \\\hline \text { Rent expense } & 3700 & 3700 & 3700 & 3700 \\\hline \text { Electricity and gas expense } & 2200 & 2200 & 2200 & 2200 \\\hline \text { Insurance expense } & 2400 & 2400 & 2400 & 2400 \\\hline \text { Depreciation expense } & 4200 & 4200 & 4200 & 4200\\\hline \end{array}$ The budget assumes that 40% of commission expenses are paid in the month they are incurred and the remaining 60% are paid one month later.In addition,50% of salary expenses are paid in the same month and the remaining 50% are paid one month later.Miscellaneous expenses,rent expense and electricity and gas expenses are assumed to be paid in the same month in which they are incurred.Insurance has been paid in advance for the year on 1 January. Calculate total budgeted cash payments for selling and administrative expenses for the month of April.

A) $75,300
B) $62,800
C) $71,100
D) $68,700

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Question 73

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Which of the following applies to the raw materials used by a manufacturing company?

A budgeted income statement is based on estimated amounts and not actual amounts.

Manufacturing overhead includes which of the following?

Which of the following is NOT an inventoriable product cost?

The capital expenditures budget stands alone and is not part of either the operating budget or the financial budget.

Nurix Ltd is a business consulting firm.During the month of February,Nurix earned $56,400 of revenues by providing services to 46 clients.Operating expenses for February were $11,500 and non-operating expenses were $4000. What is the cost per service?

The cash budget can be prepared before the sales budget.

Evanston Manufacturing Company reported the following information for the year 2017: $\begin{array} { | l | l | } \hline \text { Number of units produced } & 6000 \\\hline \text { Number of units sold } & 6200 \\\hline \text { Cost of goods manufactured } & \$ 402,000 \\\hline \text { Cost of sales } & \$ 525,500 \\\hline \text { Sales revenue } & \$ 1,360,000 \\\hline \text { Gross profit } & \$ 742,000 \\\hline \text { Operating expense } & \$ 728,000 \\\hline\end{array}$ What was the unit product cost?

What is total quality management?

Which of the following is NOT a characteristic of the budgeting process?

The wages and benefits of the factory manager are inventoriable product costs.

Which of the following costs do NOT go directly into the work in process account?

Retailing businesses resell goods which they purchase from a producer.

The following information relates to Webster Ltd: $\begin{array} { | l | l | } \hline \text { Advertising costs } & \$ 13,200 \\\hline \text { Sales salary } & 13,400 \\\hline \text { Sales revenue } & 470,000 \\\hline \text { President's salary } & 60,000 \\\hline \text { Office rent } & 53,500 \\\hline \text { Manufacturing equipment depreciation } & 3000 \\\hline \text { Indirect materials } & 3600 \\\hline \text { Indirect labour } & 12,800 \\\hline \text { Factory repair and maintenance } & 840 \\\hline \text { Direct materials } & 30,870 \\\hline \text { Direct labour } & 31,400 \\\hline \text { Delivery vehicle depreciation } & 910 \\\hline \text { Administrative salaries } & 30,100 \\\hline\end{array}$ How much was Webster's manufacturing overhead?

The capital expenditures budget is part of the operating budget.

Management is accountable to communities in which of the following ways?

When the different business units at a company use differently structured reporting formats for their business unit budgets,it is more difficult for the company to consolidate the business unit data into a company-wide budget.

Which of the following are period costs?