Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134067254
Author: Braun
Publisher: PEARSON
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Chapter 10, Problem 10.13SE
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(Learning Objective 5: Use the COGS model to make management decisions)Spicer Industries prepares budgets to help manage the company. Spicer is budgeting forthe fiscal year ended January 31, 2018. During the preceding year ended January 31, 2017,sales totaled $9,700 million and cost of goods sold was $6,400 million. At January 31, 2017,inventory was $1,500 million. During the upcoming 2018 year, suppose Spicer expects costof goods sold to increase by 12%. The company budgets next year’s ending inventory at$1,800 million.Requirement1. One of the most important decisions a manager makes is how much inventory to buy. Howmuch inventory should Spicer purchase during the upcoming year to reach its budget?
Match the definitions 1 through 8 with the term or phrase a through h. a. Budget e. Master budget b. Top-down budgeting f. Budgetary slack c. Participatory budgeting g. Sales budget d. Cash budget h. Budgeted income statement 1. Shows expected cash inflows and outflows and helps determine financing needs. 2. A plan showing units to be sold; the usual starting point in the master budget process. 3. A report that shows predicted revenues and expenses for a budgeting period. 4. A formal statement of future plans, usually expressed in monetary terms. 5. Approach in which top management passes down a budget without employee input. 6. A budgetary cushion used to meet performance targets. 7. A comprehensive business plan that includes operating, investing, and financing budgets. 8. Employees affected by a budget help in preparing it.
I will be conducting and reporting on an interview with my school asst business administrator about the budget process. Please list a series of questions I should be asking when preparing for a school budget. Ty :)
Chapter 10 Solutions
Managerial Accounting (5th Edition)
Ch. 10 - (Learning Objective 1) Companies often...Ch. 10 - (Learning Objective 1) Which of the following is...Ch. 10 - (Learning Objective 1) In terms of responsibility...Ch. 10 - (Learning Objective 2) Which of the following is...Ch. 10 - (Learning Objective 2) A segment margin is the...Ch. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Prob. 8QCCh. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - Identify and understand responsibility centers...Ch. 10 - Identify types of responsibility centers (Learning...Ch. 10 - Identify centralized and decentralized...Ch. 10 - Prob. 10.4SECh. 10 - Prob. 10.5SECh. 10 - Prob. 10.6SECh. 10 - Calculate ROI (Learning Objective 3) Refer to Epic...Ch. 10 - Prob. 10.8SECh. 10 - Prob. 10.9SECh. 10 - Prob. 10.10SECh. 10 - Prob. 10.11SECh. 10 - Interpret a performance report (Learning Objective...Ch. 10 - Prob. 10.13SECh. 10 - Classify KPIs by balanced scorecard perspective...Ch. 10 - Use vocabulary terms (Learning Objectives 1, 2, 3,...Ch. 10 - Prob. 10.16SECh. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prepare a segment margin performance report...Ch. 10 - Compute and interpret the expanded ROI equation...Ch. 10 - Prob. 10.21AECh. 10 - Prob. 10.22AECh. 10 - Comparison of ROI and residual income (Learning...Ch. 10 - Prob. 10.24AECh. 10 - Comprehensive flexible budget problem (Learning...Ch. 10 - Prepare a flexible budget performance report...Ch. 10 - Work backward to find missing values (Learning...Ch. 10 - Construct a balanced scorecard (Learning Objective...Ch. 10 - Sustainability and the balanced scorecard...Ch. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prob. 10.32BECh. 10 - Prob. 10.33BECh. 10 - Prob. 10.34BECh. 10 - Prob. 10.35BECh. 10 - Prob. 10.36BECh. 10 - Prob. 10.37BECh. 10 - Prob. 10.38BECh. 10 - Prob. 10.39BECh. 10 - Prob. 10.40BECh. 10 - Prob. 10.41BECh. 10 - Sustainability and the balanced scorecard...Ch. 10 - Prepare a budget with different volumes for...Ch. 10 - Prepare and interpret a performance report...Ch. 10 - Prob. 10.45APCh. 10 - Prob. 10.46APCh. 10 - Prob. 10.47APCh. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.49BPCh. 10 - Prob. 10.50BPCh. 10 - Evaluate divisional performance (Learning...Ch. 10 - Prob. 10.52BPCh. 10 - Determine transfer price at a manufacturer under...Ch. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.55SC
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- Manny, a budget officer, conducted a class for non-accounting managers and program directors on the subject of budgets. Manny began the class discussion by asking, “What are some of the uses of a budget?” One manager replied, “Planning.” Another said, “Evaluating performance.” Still, another suggested “Coordinating activities.” “What about implementing plans?” inquired another. “Or communicating them?” added someone else. “Don’t forget motivation,” one manager warned from the rear of the room. “I’m on the school board,” commented another, “and we use it to authorize actions.” Finally, one manager asked, “Can budgets do all that?” Manny responded, “all that and more.” Select at least two of the uses suggested by the managers and explain how budgets accomplish those uses.arrow_forwardRoberds Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting: Fixed element per month Variable element per student Variable element per course Revenue $ 0 $ 298 $ 0 Faculty wages $ 0 $ 0 $ 3,100 Course supplies $ 0 $ 52 $ 40 Administrative expenses $ 26,500 $ 27 $ 52 In March, the school budgeted for 1,910 students and 88 courses. The school's income statement showing the actual results for the month appears below: Roberds Tech Income Statement For the Month Ended March 31 Actual students 1,810 Actual courses 91 Revenue $ 411,340 Expenses: Faculty wages 214,950 Course supplies 62,590 Administrative expenses 84,562 Total expense 362,102 Net operating income $ 49,238 Required: Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending…arrow_forwardPrepare a 12-month Master Budget for a company of your choosing. It can be a company that you are closely connect too or one randomly selected. COMPLETED IN EXCEL. As you are preparing the Master Budget, some information is NOT provided. You are required to decide or predict or forecast this information. Provide an introduction for the company you have chosen. The introduction should include the following: Name of company Location of company Name of owner Nature of the business. Type of product Fiscal period For the company that you have selected - Prepare a 12-month Master Budget. Your submission must show each month’s activities. Here are some considerations to include in preparing the budget: You must forecast your sales, purchases, direct labour and manufacturing overhead for each month and any other information as required All sales are on accounts Expected collections are to be 50% in the month of the sale, 30 % in the first month following the sale, and 20% in the second…arrow_forward
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