Financial and Managerial Accounting - With CengageNow
14th Edition
ISBN: 9781337577809
Author: WARREN
Publisher: CENGAGE L
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Chapter 21, Problem 21.1TIF
To determine
Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.
To Explain: The response of Mr. C to Mr. M’s request to expense the advanced payments for convention-related costs against July’s budget.
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Ethics in ActionThe director of marketing for Starr Computer Co., Megan Hewitt, hadthe following discussion with the company controller. Cam Morley, onJuly 26 of the current year:
Megan: Cam, it looks like I'm going to spend much less than indicated onmy July budget.Cam: I'm glad to hear it.
Megan: Well. I'm not so sure it's good news. I'm concerned that thepresident will see that I'm under budget and reduce my budget in thefuture. The only reason I look good is because we delayed an advertising
campaign. Once the campaign hits in September, I'm sure my actualexpenditures will go up. You see, we are also having our sales conventionin September. Having the advertising campaign and the convention atthe same time is going to kill my September numbers.
Cam: I don't think that's anything to worry about. We all expect somevariation in actual spending month to month. What's really important isstaying within the budgeted targets for the year. Does that look as if it'sgoing to be a problem?…
Is ABC Manufacturing is properly using the budget process to plan for next year's expenses?
You have just been hired at ABC Manufacturing, and your supervisor has invited you to sit in on today's budget meeting. You are given a copy of
the following proposed budget for next year to review. The budget is being used by ABC to plan for next year. Your supervisor tells you right before
the meeting, "We always overestimate because the president always makes us cut the budget by 20%, and besides, I really want to go to that
conference in Las Vegas next year." He continued," I have really worked hard this year and put in a lot of overtime so I deserve it."
ABC MANUFACTURING
Budgeted Income Statement // For the Year Ended Dec. 31, 20XX
REVENUE: Sales
COST OF GOODS SOLD: Cost of Goods Sold
GROSS PROFIT
EXPENSES:
Advertising
Cleaning
Insurance
Phone
Rent
Supplies
Taxes
Training/Education
Utilities
Wages
Total Expenses
NET INCOME
9,500
1,800
28,000
3,600
24,000
6,500
10,000
9,800
8,500
150,000…
Jane and Alex both work at Spartans Inc. Jane, the manger of a production department, buys lunch for
Alex, who works in Accounting. Alex is preparing the monthly projections for the various production
departments. At lunch, Jane asks Alex "to be conservative in his estimates" of variable costs in crafting
the budget.
Which, if any, ethical standards did Jane violate?
O Credibility - failure to provide all relevant information that could influence a decision.
O Competence - failure to maintain an appropriate level of expertise.
O Integrity - failure to abstain from activities that might discredit the profession.
Confidentiality - failure to refrain from using information for an unethical advantage.
O Integrity - failure to mitigate conflicts of interest.
O Confidentiality - disclosure of confidential information without authorization or legal requirement.
Chapter 21 Solutions
Financial and Managerial Accounting - With CengageNow
Ch. 21 - Prob. 1DQCh. 21 - Briefly describe the type of human behavior...Ch. 21 - What behavioral problems are associated with...Ch. 21 - What behavioral problems are associated with...Ch. 21 - Under what circumstances would a static budget be...Ch. 21 - How do computerized budgeting systems aid firms in...Ch. 21 - Why should the production requirements Set forth...Ch. 21 - Prob. 8DQCh. 21 - A. Discuss the purpose of the cash budget. B. If...Ch. 21 - Give an example of how the capital expenditures...
Ch. 21 - Flexible budgeting At the beginning of the period,...Ch. 21 - Production budget Pasadena Candle Inc. projected...Ch. 21 - Direct materials purchases budget Pasadena Candle...Ch. 21 - Direct labor cost budget Pasadena Candle Inc....Ch. 21 - Cost of goods sold budget Prepare a cost of goods...Ch. 21 - Prob. 21.6BECh. 21 - Personal budget At the beginning of the school...Ch. 21 - Flexible budget for selling and administrative...Ch. 21 - Static budget versus flexible budget The...Ch. 21 - Flexible budget for Assembly Department Steelcase...Ch. 21 - Production budget Weightless Inc. produces a Bath...Ch. 21 - Sales and production budgets Sonic Inc....Ch. 21 - Prob. 21.7EXCh. 21 - Prob. 21.8EXCh. 21 - Prob. 21.9EXCh. 21 - Prob. 21.10EXCh. 21 - Direct materials purchases budget Anticipated...Ch. 21 - Direct labor cost budget Ace Racket Company...Ch. 21 - Production and direct labor cost budgets Levi...Ch. 21 - Factory overhead cost budget Sweet Tooth Candy...Ch. 21 - Cost of goods sold budget Delaware Chemical...Ch. 21 - Cost of goods sold budget The controller of...Ch. 21 - Prob. 21.17EXCh. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Prob. 21.20EXCh. 21 - Capital expenditures budget On January 1, 20Y6,...Ch. 21 - Forecast sates volume and sales budget For 20Y8,...Ch. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Bridgeport...Ch. 21 - Budgeted income statement and balance sheet As a...Ch. 21 - Forecast sales volume and sales budget Sentinel...Ch. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Mercury Shoes Inc....Ch. 21 - Budgeted income statement and balance sheet As a...Ch. 21 - Nursing staff budget Mercy Hospital staffs its...Ch. 21 - Parking lot staff budget Adventure Park is a large...Ch. 21 - Prob. 3ADMCh. 21 - Prob. 21.1TIFCh. 21 - Communication The city of .Milton has an annual...
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