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Managerial Accounting Chapter 9

Managerial Accounting Chapter 9

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Published by: Anon121 on Nov 08, 2011
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Managerial Accounting Chapter 9Study Guide
1.Davie Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of theyear. The budgeted variable factory overhead rate is $6.00 per direct labor-hour; the budgetedfixed factory overhead is $92,000 per month, of which $16,000 is factory depreciationIf the budgeted direct labor time for November is 9,000 hours, then the total budgeted cashdisbursements for November must be:
$130,000
2.Davie Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of theyear. The budgeted variable factory overhead rate is $6.00 per direct labor-hour; the budgetedfixed factory overhead is $92,000 per month, of which $16,000 is factory depreciation. If the budgeted direct labor time for December is 4,000 hours, then the predetermined factoryoverhead per direct labor-hour for December would be:
$29
3.
Detmer Enterprises has budgeted sales for the next five months as follows:
 
 Past experience has shown that the ending inventory for each month should be equal to 10% of the next month's sales in units. The inventory on December 31 contained 400 units, which was inexcess of the desired level of inventory. The company needs to prepare a Production Budget for the first quarter of the year. The desired ending inventory for April is:
460
Desired ending inventory for April = 10% of May sales = 10% x 4,600 = 460 units
4.
Thiel Inc. is working on its cash budget for October. The budgeted beginning cash balance is$35,000. Budgeted cash receipts total $166,000 and budgeted cash disbursements total $162,000.The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for October will be:
$39,000
Excess cash available over disbursements = Beginning cash balance + Budgeted cash receipts -Budgeted cash disbursements = $35,000 + $166,000 - $162,000 = $39,000 
5.
Sarrazin Corporation is in the process of preparing its annual budget. The following beginningand ending inventory levels are planned for the year. Each unit of finished goods requires 8 grams of raw material. If the company plans to sell 640,000 units during the year, the number of units it would have tomanufacture during the year would be:
590,000
 
6.
Mouw Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The directlabor budget indicates that 5,400 direct labor-hours will be required in January. The variableoverhead rate is $4.40 per direct labor-hour. The company's budgeted fixed manufacturingoverhead is $77,220 per month, which includes depreciation of $9,720. All other fixedmanufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
$91,260
Variable overhead = 5,400 direct labor-hours x $4.40 = $23,760Cash portion of fixed manufacturing overhead = $77,220 - $9,720 = $67,500Total cash disbursement for overhead in January = $23,760 + $67,500 = $91,260
7.
Hardin, Inc, has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 contained 1,020 units. The companyneeds to prepare a production budget for the next five months. The total number of units produced in July should be:
5,660
Units produced = Ending inventory + Units sold - Beginning inventory=(6,000 x 15%) + 5,600 - (5,600 x 15%) = 5,660
8.
The cash budget must be prepared before you can complete the:
budgeted balance sheet
9.
A self-imposed budget can be a very effective control device in an organization.
True

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