PREPREV-MAS FS, Shor term decision, BS, Flexible Budgeting

Budgeting is

• used to compare actual costs with standards costs

• used to determine the cost of manufactured products

• a detailed plan that translates objectives or goals into financial terms

• A means of product costing that emphasizes activities as basic cost objects

Which one of the following best describes the role o top management in the budgeting process? Top management

• Should be involved only in the approval process

• Needs to be involved, including using the budget process to communicate goals

• Lacks detailed knowledge of the daily operations and should limit their involvement

• needs to separate the budgeting process and the business planning process into two separate process.

Bucks Company desires and ending inventory of P 62,000 and a beginning inventory of P 55,000. Gross Profit is estimated to be 25% of sales. The expected sales amounted to P 320,000. Budgeted purchases would amount to

• P 230,000

• P 240,000

• P 247,000

• P 370,000

ABC COmpany budgeted sales of P 220,000 for June, P 200,000 for July, P 280,000 for August, P 264,000 for September, P 244,000 for October and P 300,000 for November. Approximately 75% of sales are on credit; the remainder are cash sales. Collection experience indicates that 60% of the budgeted credit sales will be colelcted the month after sales, 36% on the second month, and 4% will be uncollectible. Which month has the highest cash receipts?

• August

• September

• October

• November

Which of the following is true regarding variances?

• Favorable variances are always debits

• Unfavorable variances are always creditS

• Favorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage

• Unfavorable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage

A company hired workers with less skill than those already working. Which variance would least likely be affected?

• Material use variance

• Labor rate variance

• Material price variance

• Variable overhead efficiency variance

One way of analyzing the variable factory overhead variance is breaking it down into

• variable overhead spending and rate variance.

• variable overhead efficiency and volume variance

• variable overhead spending and capacity variance

• variable overhead spending and efficiency

LJ Company has the following information for the third quarter 2018:

Actual total VR OH(Fx and Vr) P 374,850

Budget Formula P 231,000 plus P 1.20 per hour

Spending Variance (3-way analysis) P 16,800 UF

Volume Variance(2way analysis) P 10,500 F

Overall factory overhead variance P 12,600 UF

Determine the efficiency variance

• P 6,300 F

• P 6,300 UF

• P 18,900 F

• P 18,900 UF

What is the most important purpose of a balanced scorecard?

• To develop strategies

• To set prices for products

• To begin the budgeting process

• To properly measure performances

Yello Company is evaluating performance using delivery performance measures. The production manager provided the following data which is the usual time involved to complete the orders:

Waiting time from orders being places to start of production 2 days

Waiting time from the start of production to completion 1 day

Process time 4 days

move time 2 days

Inspection time 1 day

The Company operates 7 days a week. The delivery cycle time is

• 4 days

• 7 days

• 8 days

• 10 days