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Acc650 Module 4 Budgeting and Performance Measures

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1. A formal budget program will almost always result in:
a. higher sales. more cash inflows than cash outflows.
b. decreased expenses. improved profits. a detailed plan against which actual results can be compared.
2. Darling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $730,000
Actual machine hours worked: 60,000
Budgeted fixed overhead $72,000
Planned level of machine-hour activity 50,000
If Darling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be:
a. $12.00. $14.40. $14.60. $15.00. some other amount.

Standard fixed overhead rate per machine hour = Budgeted fixed overhead/Planned level of machine hour activity  $720,000/50,000 machine hours  $14.40 per machine hour

3. Wilson Corporation is budgeting its equipment needs on an ongoing basis, with a new quarter being added to the budget as the current quarter is completed. This type of budget is most commonly known as a:
a. capital budget. rolling budget. revised budget. pro-forma budget. financial budget.

4. Bird plans to sell 5,000 units each quarter next year. During the first two quarters each unit will sell for $12; during the last two quarters the sales price will increase $1.50 per unit. What is Bird's estimated sales revenue for next year?
a. $240,000. $255,000. $270,000. $244,000. Some other amount.

5. Generally speaking, budgets are not used to:
a. identify a company's most profitable products. evaluate performance. create a plan of action. assist in the…...

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