Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 7, Problem 6EB
Given the following information from Power Enterprises’ direct materials budget, how much direct materials needs to be purchased?
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Which of the following budgets for a manufacturing firm indicates the quantity ( and costs ) of raw materials that must be acquired to meet production needs and ending inventory requirements ?
The capital expenditures budget
The manufacturing disbursements budget
The production budget
The sales budget
The direct materials purchases budget
What are the benefits of preparing a production and direct materials budget?
Production budgets are used as a basis for the preparation of which of the following budgets?
a. Operating expensesb. Direct materials purchases, direct labour cost, and factory overhead cost
c. Sales in poundsd. Sales in units
Chapter 7 Solutions
Principles of Accounting Volume 2
Ch. 7 - Which of the following is not a part of budgeting?...Ch. 7 - Which of the following is an operating budget? A....Ch. 7 - Which of the following is a finance budget? A....Ch. 7 - Which approach is most likely to result in...Ch. 7 - Which approach requires management to justify all...Ch. 7 - Which of the following is true in a bottom-up...Ch. 7 - The most common budget is prepared for a...Ch. 7 - Which of the operating budgets is prepared first?...Ch. 7 - The direct materials budget is prepared using...Ch. 7 - Which of the following is not an operating budget?...
Ch. 7 - Which of the following statements is not correct?...Ch. 7 - The units required in production each period are...Ch. 7 - The cash budget is part of which category of...Ch. 7 - Which is not a section of the cash budget? cash...Ch. 7 - Which budget is the starting point in preparing...Ch. 7 - Which of the following includes only financial...Ch. 7 - Which budget evaluates the results of operations...Ch. 7 - What is the main difference between static and...Ch. 7 - What is a budget and what are the different types...Ch. 7 - What is the difference between budgeting and...Ch. 7 - What are the advantages and disadvantages of the...Ch. 7 - Why might a rolling budget require more management...Ch. 7 - What information is necessary for the operating...Ch. 7 - What operating budget exists for manufacturing but...Ch. 7 - What is the process for developing a budgeted...Ch. 7 - Which of the financial budgets is the most...Ch. 7 - A company has prepared the operating budget and...Ch. 7 - Fill in the blanks: A flexible budget summarizes...Ch. 7 - What information is included in the capital asset...Ch. 7 - Why does budget planning typically begin with the...Ch. 7 - What steps should be considered it a budget is to...Ch. 7 - Blue Book printing is budgeting sales of 25,000...Ch. 7 - How many units are in beginning inventory it...Ch. 7 - Navigator sells GPS trackers for $50 each. It...Ch. 7 - One Device makes universal remote controls and...Ch. 7 - Sunrise Poles manufactures hiking poles and is...Ch. 7 - Given the following information from Rowdy...Ch. 7 - Each unit requires direct labor of 2.2 hours. The...Ch. 7 - How many units are estimated to be sold it...Ch. 7 - Cash collections for Wax On Candles found that 60%...Ch. 7 - Nonnas Re-Appliance Store collects 55% of its...Ch. 7 - Dream Big Pillow Co. pays 65% of its purchases in...Ch. 7 - Desiccate purchases direct materials each month....Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Halifax Shoes has 30% of its sales in cash and the...Ch. 7 - Cold X, Inc. uses this information when preparing...Ch. 7 - Using the provided budgeted information for...Ch. 7 - The production cost for a waterproof phone case is...Ch. 7 - Lovely Wedding printing is budgeting sales of...Ch. 7 - How many units are in beginning inventory if...Ch. 7 - Barnstormer sells airplane accessories for $20...Ch. 7 - Rehydrator makes a nutrition additive and expects...Ch. 7 - Cloud Shoes manufactures recovery sandals and is...Ch. 7 - Given the following information from Power...Ch. 7 - Each unit requires direct labor of 4.1 hours. The...Ch. 7 - How many units are estimated to be sold if Kino,...Ch. 7 - Cash collections for Renew Lights found that 65%...Ch. 7 - My Aunts Closet Store collects 60% of its accounts...Ch. 7 - Gear Up Co. pays 65% of its purchases in the month...Ch. 7 - Drainee purchases direct materials each month. Its...Ch. 7 - What is the amount of budgeted cash payments if...Ch. 7 - Earthies Shoes has 55% of its sales in cash and...Ch. 7 - Judges Gavel uses this information when preparing...Ch. 7 - Using the following budgeted information for...Ch. 7 - The production cost for UV protective sunglasses...Ch. 7 - Lens Junction sells lenses for $45 each and is...Ch. 7 - The data shown were obtained from the financial...Ch. 7 - Echo Amplifiers prepared the following sales...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Spree Party Lights overhead expenses are: Prepare...Ch. 7 - Relevant data from the Poster Companys operating...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Direct labor hours are estimated as 2,000 in...Ch. 7 - Fitbands estimated sales are: What are the...Ch. 7 - Sports Socks has a policy of always paying within...Ch. 7 - Prepare a flexible budgeted income for 120,000...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Caribbean Hammocks currently sells 75.000 units at...Ch. 7 - Total Pops data show the following information:...Ch. 7 - Identify the document that contains the...Ch. 7 - Titanium Blades refines titanium for use in all...Ch. 7 - Lens & Shades sells sunglasses for $37 each and is...Ch. 7 - The following data were obtained from the...Ch. 7 - TIB makes custom guitars and prepared the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Prepare a budgeted income statement using the...Ch. 7 - Relevant data from the operating budget of The...Ch. 7 - Fill in the missing information from the following...Ch. 7 - Mesa Aquatics, Inc. estimated direct labor hours...Ch. 7 - Amusement tickets estimated sales are: What are...Ch. 7 - All Temps has a policy of always paying within the...Ch. 7 - Prepare a flexible budgeted income statement for...Ch. 7 - Before the year began, the following static budget...Ch. 7 - Artic Camping Gears currently sells 35,000 units...Ch. 7 - Prob. 14PBCh. 7 - Identify the document that contains the...Ch. 7 - Replenish sells shampoo that removes chlorine from...Ch. 7 - Why is a clear understanding of managements goals...Ch. 7 - It is proper budgeting procedure to begin with...Ch. 7 - How would a human resources department use...Ch. 7 - How would maintenance departments use information...Ch. 7 - How might service industries predict revenue?Ch. 7 - The management of Hess, Inc., is developing a...Ch. 7 - When would a static budget be effective in...Ch. 7 - If management is being evaluated on their ability...Ch. 7 - If management is being evaluated on their ability...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What operating budget exists for manufacturing but not for a retail company?arrow_forwardWhy should the timing of direct materials purchases be closely coordinated with the production budget?arrow_forwardThe direct materials budget is prepared using which budgets information? A. cash payments budget B. cash receipts budget C. production budget D. raw materials budgetarrow_forward
- Prepare a flexible budget for overhead based on the following data:arrow_forwardBefore a direct materials purchases budget can be prepared, you should first a. prepare a sales budget. b. prepare a production budget. c. decide on the desired ending inventory of materials. d. obtain the expected price of each type of material. e. All of these.arrow_forwardThe actions listed next are associated with either an activity-based operational control system or a traditional operational control system: a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department. b. The maintenance department manager receives a bonus for beating budget. c. The costs of resources are traced to activities and then to products. d. The purchasing department is set up as a responsibility center. e. Activities are identified and listed. f. Activities are categorized as adding or not adding value to the organization. g. A standard for a products material usage cost is set and compared against the products actual materials usage cost. h. The cost of performing an activity is tracked over time. i. The distance between moves is identified as the cause of materials handling cost. j. A purchasing agent is rewarded for buying parts below the standard price set by the company. k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout. l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed. m. The percentage of defective units is calculated and tracked over time. n. Engineering has been given the charge to find a way to reduce setup time by 75 percent. o. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter budget can be met. Required: Classify the preceding actions as belonging to either an activity-based operational control system or a traditional control system. Explain why you classified each action as you did.arrow_forward
- Explain how a budgeted income statement for a service business may be used for both planning and control purposes.arrow_forwardThe budget that adjusts unit sales for beginning and ending inventories of finished goods is the: a. production budget b. purchases budget c. ending inventory of finished goods budget d. cost of goods sold budgetarrow_forwardWhat is a standard cost? Group of answer choices The total number of units times the budgeted amount expected Any amount that appears on a budget The total amount that appears on the budget for product costs The amount management thinks should be incurred to produce a good or servicearrow_forward
- Prepare a direct materials budget for silicon and solution, and a direct labor budget.arrow_forwardSuggest an appropriate ‘Activity Level’ for the following budgets: (a) Manufacturing Overhead budget(b) Selling Expense Budget(c) Manufacturing Cost Budgetarrow_forwardWhat number does the direct materials budget take directly from the production budget? Multiple choice question. Beginning raw materials inventory Budgeted sales Ending inventory of finished goods Required productionarrow_forward
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