Barnes Corporation expected to sell 150,000 board games during the month of November, and the company’s master budget contained the following data related to the sale and production of these games:

Revenue $ 2,400,000
Cost of goods sold
Direct materials 675,000
Direct labor 300,000
Variable overhead 450,000
Contribution $ 975,000
Fixed overhead 250,000
Fixed selling and administration 500,000
Operating income $ 225,000

Actual sales during November were 180,000 games. Using a flexible budget, the company expects the operating income for the month of November to be

The master budget process usually begins with the

For the month of June, Wilder Cherry Company expects to sell 12,500 cases of small cherries at $25 per case and 33,000 cases of large cherries at $32 per case. Sales personnel receive a 6% commission on each case of small cherries and an 8% commission on each case of large cherries. To receive a commission on a product, the sales personnel team must meet the individual product revenue quota. The sales quotas for small cherries and large cherries are $500,000 and $1 million respectively. What are the sales commissions budgeted for June?

Which changes in costs are most conducive to switching from a traditional inventory system to a just-in-time ordering system

Tocon Company Produces Two Components: A-1 and A-2. The unit throughput contribution margins for A-1 and A-2 are $250 and $300, respectively. Each component must proceed through two processes. Operation 1 and operation 2. The capacity of operation 1 is 180 machine hours, with A-1 and A-2 requiring 1 hour and 3 hours respectively. Furthermore, Tocon can sell only 45 units of A-1 and 100 units of A-2. However, Tocon is considering expanding operation 1’s capacity by 90 machine hours at a cost of $80 per hour. Assuming that operation 2 has sufficient capacity to handle any additional output from operation 1, Tocon should produce

Mountain Corporation manufacturers cabinets but outsources the handles. Eight handles are needed for a cabinet, with assembly requiring 30 minutes of direct labor per unit. Ending finished goods inventory is planned to consist of 50% of projected unit sales for the next month, and ending handles inventory is planned to be 80% of the requirement for the next month’s projected unit output of finished goods.

Mountain’s projected unit sales:
October 4,600
November 5,000
December 4,200
January 6,000

Mountain’s ending inventories in units at September 30:
Finished goods 3,800
Handles 16,000

The number of units that Mountain finished during December is:

Baxter Corporation’s master budget calls for the production of 5,000 units of product monthly. The master budget includes indirect labor of $144,000 annually; Baxter considers indirect labor to be a variable cost. During the month of April, 4,500 units of product were produces, and indirect labor costs of $10,100 were incurred. A performance report utilizing flexible budgeting would report a budget variance for indirect labor of

When budgeting, the items to be considered by a manufacturing firm in going from a sales quantity budget to a production budget would be the

The Alsner Company budgeted sales of $220,000 for June, $200,000 for July, $280,000 for August, $264,000 for September, $244,000 for October, and $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 collected the month after the sale, 36% the second month, and 4% will be collectible. Which month has the highest budgeted cash receipts?

Which of the following is normally included in the financial budget of a firm

Capital budgeting techniques are least likely to be used in evaluating the

The Jung Corporation’s budget calls for the following production:

Qtr 1 – 45,000 units
Qtr 2 – 38,000 units
Qtr 3 – 34,000 units
Qtr 4 – 48,000 units

Each unit of product requires three pounds of direct material. The company’s policy is to begin each quarter with an inventory of direct materials equal to 30% of that quarter’s direct material requirements. Budgeted direct materials purchases for the third quarter would be

Brogan Co. operated four sales offices last year. Brogan’s costs were $400,000, of which $60,000 were fixed. Brogan’s total costs are significantly influenced by the number of sales offices it operates. Using last year’s costs as the basis for predicting annual costs, what would the budgeted costs be if Brogan operated six sales offices?

The benefits of a just-in-time system for raw materials usually include

Trumbull Company budgeted sales on account of $120,000 for July, $211,000 for August, and $198,000 for September. Collection experience indicates that 60% of the budgeted sales will be collected the month after the sale, 36% will be collected the second month and 4% will be uncollectible. The cash receipts from the accounts receivable that should be budgeted for September would be

Simpson Company’s master budget shows straight-line depreciation on factory equipment of $258,000. The master budget was prepared at an annual production volume of 103,200 units of product. The production volume is expected to occur uniformly throughout the year. During September, Simpson produces 8,170 units of product, and the accounts reflected actual depreciation on factory machinery of $20,500. Simpson controls manufacturing costs with a flexible budget. The flexible budget amount for depreciation on factory machinery for September would be

A firm develops an annual cash budgets in order to