Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4.8Q
Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect-cost rates.
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Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect-cost rates.
In budgeting direct labor hours for the coming year, it is important to: *
A. multiply production in units by the direct labor hours per unit
B. divide production in units by the direct labor hours per unit
C. subtract production in units from the direct labor hours per unit
D. subtract direct labor hours per unit from production in units
When preparing the direct labor budget, ________.
A.
budgeted units to be produced are multiplied by direct labor cost per hour to determine budgeted direct labor cost
B.
the production manager projects the average direct labor costs
C.
direct labor hours needed for production are multiplied by the direct labor cost per hour
D.
the actual direct labor cost per hour must be known
Chapter 4 Solutions
Cost Accounting
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26ECh. 4 - Prob. 4.27ECh. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37PCh. 4 - Prob. 4.38PCh. 4 - Prob. 4.39PCh. 4 - Prob. 4.40PCh. 4 - Prob. 4.41P
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- Which approach is most likely to result in employee buy-in to the budget? A. top-down approach B. bottom-up approach C. total participation approach D. basing the budget on the prior yeararrow_forwardWhy might a rolling budget require more management participation than an annual budget?arrow_forwardGiven the following information from Power Enterprises direct materials budget, how much direct materials needs to be purchased?arrow_forward
- What is the main difference between static and flexible budgets? The fixed manufacturing overhead is adjusted for units sold in the flexible budget. The variable manufacturing overhead is adjusted in the static budget. There is no difference between the budgets. The variable costs are adjusted in a flexible budget.arrow_forwardCompute the budgeted overhead rate for the coming year, using direct labor dollars as the overhead allocation base.arrow_forwardExplain zero-based budgeting and how it differs from the traditional approach to preparing next years budget.arrow_forward
- Fill in the blanks: A flexible budget summarizes _____ and _____ for various volume levels by adjusting the _____ costs for the various levels of activities. The costs remain the same for all levels of activities.arrow_forwardUsing the following per-unit and total amounts, prepare a flexible budget at the 14,000-, 15,000-, and 16,000-unit levels of production and sales for Natural Products Inc.:arrow_forwardFill in the blanks in the following flexible budget:arrow_forward
- Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?arrow_forwardA Flexible Budget will show a. Budgeted Sales Volumes at the original Budgeted Unit Costs b. Actual Sales Volumes at the original Budgeted Unit Costs c. Actual Sales Volumes at the Actual Unit Costsarrow_forwardWhich of the following statements is not true? Budgeted sales volumes and terms of trade will enable monthly budgeted cash inflows from sales to be calculated. The budgeted direct costs of sales depend upon the volume of budgeted sales and production. Budgeted fixed costs in the budgeted statement of profit or loss are allocated to each month on the accruals basis, while payments for budgeted fixed costs in the cash budget are allocated to the months in which they are paid. Budgeted net cash flow for the month = the total budgeted monthly cash receipts + the total budgeted monthly cash paymentsarrow_forward
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