MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
7th Edition
ISBN: 9781118869765
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 9, Problem 9.1E
Trusler Company has always done some planning for the nature, but the company has never prepared a formal budget. Now that the company is growing larger, it is considering preparing a budget.
Instructions 
Write a memo to Jim Dixon, the president of Trusler Company, in which you define budgeting, identify the budgets that comprise the
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1. You are the senior accountant at Cannon Manufacturing and have been asked by the budget director to prepare the production budget for the upcoming quarter. The budget director stated that they chose you to prepare this budget because it is an important part of the overall operating budget and financial budget.
Explain what the production budget calculates and how the production budget would affect other operating budgets and the financial budget.
2. Which budget is the first one that must be completed in the master budgeting process and why?
For this assignment you are to assume that you are involved in the preparation of your company's master budget. The company's sales team provides information concerning expected unit sales and pricing for use in preparation of the sales budget. Further, you are aware that a portion of the sale team's compensation is based on their ability to meet the sales budget. What would the memorandum be to the vice president of finance outlining your concerns about this practice. Include any concerns that you have about potential bias in the information provided by the sales team.
Which of the following statements is True?
a. Budget data are generally prepared by top management and distributed downward in anorganization
b. The budget committee is responsible for preparing detailed budget figures in anorganization
c. The primary purpose of the cash budget is to show the expected cash balance at the endof the budget period.
d. Under zero-based budgeting, a manager is required to start at zero budget levels each period, as if the programs involved were being initiated for the first time
Chapter 9 Solutions
MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
Ch. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - (a) Accounting plays a relatively unimportant role...Ch. 9 - What criteria are helpful in determining the...Ch. 9 - Lori Wilkins maintains that the only difference...Ch. 9 - Prob. 7QCh. 9 - What is budgetary slack? What incentive do...Ch. 9 - Prob. 9QCh. 9 - What budget is the starting point in preparing the...
Ch. 9 - The production budget shows both unit production...Ch. 9 - Alou Company has 20,000 beginning finished goods...Ch. 9 - In preparing the direct materials budget for Quan...Ch. 9 - The production budget of Justus Company calls for...Ch. 9 - Ortiz Companys manufacturing overhead budget shows...Ch. 9 - Everly Companys variable selling and...Ch. 9 - For Goody Company, the budgeted cost for one unit...Ch. 9 - Indicate the supporting schedules used in...Ch. 9 - Identify the three sections of a cash budget. What...Ch. 9 - Noterman Company has credit sales of 600,000 in...Ch. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Maris Company uses the following budgets: balance...Ch. 9 - Paige Company estimates that unit sales will be...Ch. 9 - Sales budget data for Paige Company are given in...Ch. 9 - Perine Company has 2,000 pounds of raw materials...Ch. 9 - For Gundy Company, units to be produced are 5,000...Ch. 9 - For Roche Inc., variable manufacturing overhead...Ch. 9 - Elbert Company classifies its selling and...Ch. 9 - North Company has completed all of its operating...Ch. 9 - Kaspar Industries expects credit sales for...Ch. 9 - Moore Wholesalers is preparing its merchandise...Ch. 9 - Use this list of terms to complete the sentences...Ch. 9 - Pargo Company is preparing its master budget for...Ch. 9 - Pargo Company is preparing its budgeted income...Ch. 9 - Batista Company management wants to maintain a...Ch. 9 - Zeller Company estimates that 2017 sales will be...Ch. 9 - Trusler Company has always done some planning for...Ch. 9 - Edington Electronics Inc. produces and sells two...Ch. 9 - Thome and Crede, CPAs, are preparing their service...Ch. 9 - Turney Company produces and sells automobile...Ch. 9 - DeWitt Industries has adopted the following...Ch. 9 - On January 1, 2017, the Hardin Company budget...Ch. 9 - Rensing Ltd. estimates sales for the second...Ch. 9 - Fuqua Companys sales budget projects unit sales of...Ch. 9 - Rodriguez, Inc., is preparing its direct labor...Ch. 9 - Lowell Company makes and sells artistic frames for...Ch. 9 - Atlanta Company is preparing its manufacturing...Ch. 9 - Kirkland Company combines its operating expenses...Ch. 9 - Fultz Company has accumulated the following budget...Ch. 9 - Danner Company expects to have a cash balance of...Ch. 9 - Deitz Corporation is projecting a cash balance of...Ch. 9 - The controller of Trenshaw Company wants to...Ch. 9 - Nieto Companys budgeted sales and direct materials...Ch. 9 - Green Landscaping Inc. is preparing its budget for...Ch. 9 - Pletcher Denial Clinic is a medium-sized dental...Ch. 9 - In May 2017, the budget committee of Grand Stores...Ch. 9 - Emeric and Ellies Painting Service estimates that...Ch. 9 - PROBLEMS: SET A Cook Farm Supply Company...Ch. 9 - Deleon Inc. is preparing its annual budgets for...Ch. 9 - Hill Industries had sales in 2016 of 6,800,000 and...Ch. 9 - Colter Company prepares monthly cash budgets....Ch. 9 - The budget committee of Suppar Company collects...Ch. 9 - Prob. 9.6APCh. 9 - CURRENT DESIGNS Diane Buswell is preparing the...Ch. 9 - MANAGEMENT DECISION-MAKING Decision-Making Across...Ch. 9 - Elliot Hesse Inc. manufactures ergonomic devices...Ch. 9 - Real-World Focus Information regarding many...Ch. 9 - Prob. 9.4BYPCh. 9 - Broadening Your Ethics Case BYP9-5 You are an...Ch. 9 - All About You In order to get your personal...Ch. 9 - Prob. 9.7BYP
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- A company has prepared the operating budget and the cash budget. It is now preparing the budgeted balance sheet. Identify the document that contains each of these balances. A. cash B. accounts receivable C. finished goods inventory D. accounts payable E. equipment purchasesarrow_forwardSuppose that the controller of your companys largest factory is a particularly optimistic individual. If you were in charge of developing the master budget, how, if at all, would you be influenced by this knowledge?arrow_forwardSuppose that the vice president of sales is a particularly pessimistic individual. If you were in charge of developing the master budget, how, if at all, would you be influenced by this knowledge?arrow_forward
- The management of Hess, Inc., is developing a flexible budget for the upcoming year. It was not pleased with the small amount of net income the budget showed at all sales levels and Is contemplating using a less expensive material. This action reduces direct material cost by $1 per unit. What would be the effects on financial statements and a flexible budget if management takes this approach? Are there other factors that need to be considered?arrow_forwardHackshaw Co. was formed three years ago by Glenn Holding. It started as a very small company but began to expand rapidly. With the growth in the company, the owner decided to implement a formal budgetary control process. Glenn Holding provided some data and projections to the company’s Accountant which the Accountant used to prepare the master budget for the company. The master budget was then broken down into departmental budgets. These departmental budgets were distributed to the department managers with a cover letter explaining the new budgeting system and requesting the support of everyone in achieving the targets. Most of the department managers were displeased with the budget. They felt that the targets were not realistically attainable. a. What type of budgeting approach was used? Explain. What are the advantages and the disadvantages of the approach used, Discuss. What approach would you recommend? Why? Using practical illustration from your organization.arrow_forwardHackshaw Co. was formed three years ago by Glenn Holding. It started as a very small company but began to expand rapidly. With the growth in the company, the owner decided to implement a formal budgetary control process. Glenn Holding provided some data and projections to the company’s Accountant which the Accountant used to prepare the master budget for the company. The master budget was then broken down into departmental budgets. These departmental budgets were distributed to the department managers with a cover letter explaining the new budgeting system and requesting the support of everyone in achieving the targets. Most of the department managers were displeased with the budget. They felt that the targets were not realistically attainable. a. Explain the behavioural implications of the manner in which Glenn Holding and the company’s accountant went about the budgeting process.arrow_forward
- Hackshaw Co. was formed three years ago by Glenn Holding. It started as a very small company but began to expand rapidly. With the growth in the company, the owner decided to implement a formal budgetary control process. Glenn Holding provided some data and projections to the company’s Accountant which the Accountant used to prepare the master budget for the company. The master budget was then broken down into departmental budgets. These departmental budgets were distributed to the department managers with a cover letter explaining the new budgeting system and requesting the support of everyone in achieving the targets. Most of the department managers were displeased with the budget. They felt that the targets were not realistically attainable. Outline to the Managers of Hackshaw what is Budgeting and why Budgetary Control is vital to the success of the organization.arrow_forwardBehavioral Aspects of Budgeting; Ethics and the Manager Norton Company, a manufacturer of infant furniture and carriages, is in the initial stages of preparing the annual budget for next year. Scott Ford has recently joined Norton’s accounting staff and wants to learn as much as possible about the company’s budgeting process. During a recent lunch with Marge Atkins, sales manager, and Pete Granger, production manager, Ford initiated the following conversation. Ford: Since I’m new around here and am going to be involved with the preparation of the annual budget, I’d be interested to learn how the two of you estimate sales and production numbers. Atkins: We start out very methodically by looking at recent history, discussing what we know about current accounts, potential customers, and the general state of consumer spending. Then, we add that usual dose of intuition to come up with the best forecast we can. Granger: I usually rake the sales projections as the basis for my projections. Of…arrow_forwardWhich of the following is a benefit of using budget-management software? (check all that apply). Allows companies to determine the exact amount of sales that will be achieved in the upcoming fiscal period. Allows companis with multiple business segments to comine financial data from each of its segments to prepare company-wide budgeted financial Allows managers to access the budget from several locations through the internet. Allows managers to perform sensitivity analysis on each individual business segment.arrow_forward
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