Exam 3- Ch 20-21

Question 1

Budgeting process

Answer 1

Develop budget, compare to actual, take action, set new plans

Question 2

Master budget

Answer 2

1. Sales
2. Production
3. DM, DL, FO
4. Cap Ex, Cash, Selling & G/A
5. Budgeted financial statements

Question 3

Budget definition

Answer 3

Formal statement of a company’s plans in dollars

Question 4

Factory overhead budget

Answer 4

Variable + fixed overhead

Question 5

COGS budget

Answer 5

Budgeted sales units x Product cost per unit

Question 6

Operating budgets

Answer 6

Sales, production, DM, DL, FO, COGS, Selling and G/A

Question 7

Cash budget

Answer 7

Beg + receipts - payments = balance +- loans = end balance

Question 8

Budgeted Income Statement

Answer 8

Sales
-COGS
=GP
-Selling and G/A
Taxes
=net income

Question 9

Budgeted balance sheet

Answer 9

Assets: Cash, AR, RM inventory, FG inventory, equipment, less: acc depreciation
Liabilities: Acc payable, income tax payable
Equity: common stock, retained earnings

Question 10

Fixed budget

Answer 10

Based on one amount of sales

Question 11

Flexible budget

Answer 11

Based on more than one amount of sales or activity measure

Question 12

Fixed budget report

Answer 12

Fixed budget vs actual= variance

Question 13

Flexible budget report

Answer 13

Before period- what if analysis
After period- evaluate performance

Sales-var=CM-fixed=income

Question 14

Ideal standard

Answer 14

Quantity of DM required if process is 100% efficient

Question 15

Variance analysis types

Answer 15

DM: price and quantity
DL: rate and efficiency
OH: controllable and volume
Sales: price and volume