ARTS CPA REVIEW
0917-5723900
e-mail address:
4157 gatcn
MANAGEMENT ADVISORY SERVICTS ACCT. SAMUEL. U. ITCHON, JR.
FINANCIAL PLANNING AND BUDGET (1) M AS - ] O
TRUEFALSE
1
e A strategici plan
s identifres strategies
fom’e il for future activites and o perations generally covering at least five years.
3 The master budget 18 composed of operating budgets and financial budgets
4 Control ' achieved by comparing actual results with budqgeted results on a periodic basis.
5 Planning is looking ahead to see what actions should be taken to realize particular goals.
6. Budgets 'dentify objectives and the actions needed to achieve them because they are foresighted financial plans
;. fim should develop G‘S'Tfimflag‘ic plan before preparing a budget.
acquires mformttm‘ can be used to improve decision making from a bud stem.
13' gz::mg actual resufts with bu?ge\:c:flresueh: on a periodic basis provgides control %e:?u;ygetary system.
1; ; %""e""“' differenceandbetween NIRTK)
actual eand 98rved
planned by results
budgets.is feed| back that the system isi providing
idi adequate control.
1A master budget is s
typically ing
a comprehensive
12-momh Bugatfinancial p plan for the organization
izati for the past fiscal year. A
14 “" department manager reviews the budget. provides policy guidelines and budgetary goals, and resolves differences that
;: as the budget is prepared, approves the final budget. and monitors the actual performance of the organization as the
The budget director is the person responsible for directing and coordinating the organization’s overall budgeting process.
Baalian
The first budget to be prepared is the sales budget. ¢ o ® "
The pmdtmon budget is prepared in units and in dollars. :
The direct materials purchases budget is based on the sales budget. ‘
There are as many direct materials purchases budgets as there are products.
The direct tabor budget includes: units to be produced, direct labor time needed per unit, and total direct labor cost for the
The seffing and administrative expenses budget is part of the operating budgets.
The sales budget is used directly in the develnpment of the production budget.
BRIRRRENY
m prepanng the direct labor budget, the avarage wage rate is used to calculate total direct labor cost.
The cash budget includes the beginning balance of cash. cash receipts, cash disbursements, and the ending balance of cash.
¥ the intial cash budget indicates a cash deficiency, the company must go out of business.
Cash recemts must be at least as much as sales.
Cash buagets are often prepared monthly or even weeklv.
The outout of the cost of goods sold budget is entered into the pro forma balance sheet.
individual behavior that is in basic conflict with the goals of the organization is called goal congruence.
Pseudoparticipation is one of the potential problems with participative budgeting.
Budgets shouid be based on ideal standards to encourage everyone to reach for the highest level of performance.
ideally, managers are held accountable for controllable costs.
PRI
Myopic behavior is one of the advantages of participative budgeting.
Monetary incentives include salary increases, bonuses, and promotions.
PROBLEMS
1. Purchases and Cash Payments
A production plan by quarter for Danielle Company is:
First quarter 24,000 units Third quarter 32,000 units
Second quarter 30,000 Fourth quarter 42,000
Four units of materials are used in producing each unit of product. Each unit of material costs P .60. Ending
materials inventory is to be equal to 25 percent of production requirements for the next quarter. This requirement
was met at the beginning of the year. Production for the first quarter following the budget year is estimated at
28,000 units. Accounts payable for materials purchased is estimated at P 38,400 at the beginning of the current
budget year. Forecast accounts payable at the end of the quarter should equal 40 percent of the purchases
during the quarter,
Required;
(1) Determine the units of materials to be purchased each quarter.
(2) Determine the cost of materials purchases by quarter.
(3) Estimate the payments to be made each quarter for materials.
0917-5723900
e-mail address:
4157 gatcn
MANAGEMENT ADVISORY SERVICTS ACCT. SAMUEL. U. ITCHON, JR.
FINANCIAL PLANNING AND BUDGET (1) M AS - ] O
TRUEFALSE
1
e A strategici plan
s identifres strategies
fom’e il for future activites and o perations generally covering at least five years.
3 The master budget 18 composed of operating budgets and financial budgets
4 Control ' achieved by comparing actual results with budqgeted results on a periodic basis.
5 Planning is looking ahead to see what actions should be taken to realize particular goals.
6. Budgets 'dentify objectives and the actions needed to achieve them because they are foresighted financial plans
;. fim should develop G‘S'Tfimflag‘ic plan before preparing a budget.
acquires mformttm‘ can be used to improve decision making from a bud stem.
13' gz::mg actual resufts with bu?ge\:c:flresueh: on a periodic basis provgides control %e:?u;ygetary system.
1; ; %""e""“' differenceandbetween NIRTK)
actual eand 98rved
planned by results
budgets.is feed| back that the system isi providing
idi adequate control.
1A master budget is s
typically ing
a comprehensive
12-momh Bugatfinancial p plan for the organization
izati for the past fiscal year. A
14 “" department manager reviews the budget. provides policy guidelines and budgetary goals, and resolves differences that
;: as the budget is prepared, approves the final budget. and monitors the actual performance of the organization as the
The budget director is the person responsible for directing and coordinating the organization’s overall budgeting process.
Baalian
The first budget to be prepared is the sales budget. ¢ o ® "
The pmdtmon budget is prepared in units and in dollars. :
The direct materials purchases budget is based on the sales budget. ‘
There are as many direct materials purchases budgets as there are products.
The direct tabor budget includes: units to be produced, direct labor time needed per unit, and total direct labor cost for the
The seffing and administrative expenses budget is part of the operating budgets.
The sales budget is used directly in the develnpment of the production budget.
BRIRRRENY
m prepanng the direct labor budget, the avarage wage rate is used to calculate total direct labor cost.
The cash budget includes the beginning balance of cash. cash receipts, cash disbursements, and the ending balance of cash.
¥ the intial cash budget indicates a cash deficiency, the company must go out of business.
Cash recemts must be at least as much as sales.
Cash buagets are often prepared monthly or even weeklv.
The outout of the cost of goods sold budget is entered into the pro forma balance sheet.
individual behavior that is in basic conflict with the goals of the organization is called goal congruence.
Pseudoparticipation is one of the potential problems with participative budgeting.
Budgets shouid be based on ideal standards to encourage everyone to reach for the highest level of performance.
ideally, managers are held accountable for controllable costs.
PRI
Myopic behavior is one of the advantages of participative budgeting.
Monetary incentives include salary increases, bonuses, and promotions.
PROBLEMS
1. Purchases and Cash Payments
A production plan by quarter for Danielle Company is:
First quarter 24,000 units Third quarter 32,000 units
Second quarter 30,000 Fourth quarter 42,000
Four units of materials are used in producing each unit of product. Each unit of material costs P .60. Ending
materials inventory is to be equal to 25 percent of production requirements for the next quarter. This requirement
was met at the beginning of the year. Production for the first quarter following the budget year is estimated at
28,000 units. Accounts payable for materials purchased is estimated at P 38,400 at the beginning of the current
budget year. Forecast accounts payable at the end of the quarter should equal 40 percent of the purchases
during the quarter,
Required;
(1) Determine the units of materials to be purchased each quarter.
(2) Determine the cost of materials purchases by quarter.
(3) Estimate the payments to be made each quarter for materials.
