ACC650
Module 4 Budgeting and Performance Measures
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1. A formal
budget program will almost always result in:
a. higher
sales.
more cash inflows
than cash outflows.
b. decreased
expenses.
improved profits.
a detailed plan
against which actual results can be compared.
2. Darling
Company, which applies overhead to production on the basis of machine hours,
reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $730,000
Actual machine hours worked: 60,000
Budgeted fixed overhead $72,000
Planned level of machine-hour activity 50,000
If Darling estimates four hours to manufacture a completed
unit, the company's standard fixed overhead rate per machine hour would be:
a. $12.00.
$14.40.
$14.60.
$15.00.
some other amount.
Standard fixed overhead rate per machine hour = Budgeted
fixed overhead/Planned level of machine hour activity $720,000/50,000 machine
hours $14.40 per machine hour
3. Wilson
Corporation is budgeting its equipment needs on an ongoing basis, with a new
quarter being added to the budget as the current quarter is completed. This
type of budget is most commonly known as a:
a. capital
budget.
rolling budget.
revised budget.
pro-forma budget.
financial budget.
4. Bird plans
to sell 5,000 units each quarter next year. During the first two quarters each
unit will sell for $12; during the last two quarters the sales price will
increase $1.50 per unit. What is Bird's estimated sales revenue for next year?
a. $240,000.
$255,000.
$270,000.
$244,000.
Some other amount.
5. Generally
speaking, budgets are not used to:
a. identify a
company's most profitable products.
evaluate performance.
create a plan of
action.
assist in the control
of profit and operations.
facilitate
communication and coordinate activities.
6. Trois Elles
Corporation recently prepared a manufacturing cost budget for an output of
50,000 units, as follows:
Direct materials $100,000
Direct
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