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At January 1, 2012, Bella Company has beginning inventory of 2,000 DVD players. Bella estimates it will sell 10,000 units during the first quarter of 2012 with a 12% increase in sales each quarter. Bella’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each DVD player costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2012?

2,If a company plans to sell 48,000 units of product but sells 60,000, the most appropriate comparison of the cost data associated with the sales will be by a budget based on
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Management by exception

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means that only unfavorable differences will be investigated.

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means that all differences will be investigated.

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causes managers to be buried under voluminous paperwork.

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means that material differences will be investigated.

4An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000. The center's average operating assets were $800,000. How much is the return on investment?
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Alma Manufacturing recorded operating data for its auto accessories division for the year.

Sales		$750,000
Contribution margin		150,000
Total direct fixed costs		90,000
Average total operating assets		400,000

How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

To develop the flexible budget, management takes all of the following steps except identify the

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activity index and the relevant range of activity.

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variable costs and determine the budgeted variable cost per unit.

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fixed costs and determine the budgeted fixed cost per unit.

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All of these options are steps in developing the flexible budget.

A flexible budget is appropriate for

Direct Labor Costs

Manufacturing Overhead Costs