1 Pedgrift Company uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs. For example, if the sales manager accepts a rush order that will result in higher than normal shi
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| 1 |  | Pedgrift Company uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs. For example, if the sales manager accepts a rush order that will result in higher than normal shipping costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager. This type of accounting system is known as: | ||
| [removed]A) | absorption accounting. | ||
| [removed]B) | contribution accounting. | ||
| [removed]C) | operational budgeting. | ||
| [removed]D) | responsibility accounting. | ||
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| 2 | | Experience has shown that 50% of the Karaskiewicz Company's sales are for cash. The rest are on credit with 70% of the credit sales are collected in the month of sale, 20% in the month following sale, and 5% in the second month following sale. The remaining credit sales are expected to be uncollectible. The company's sales budget for the year included budgeted sales of $140,000 in January, $120,000 in February, and $160,000 in March. Total cash receipts in March would be budgeted to be: | ||
| [removed]A) | $56,000. | ||
| [removed]B) | $136,000. | ||
| [removed]C) | $151,500. | ||
| [removed]D) | $167,000. | ||
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| 3 | | Pluta Company plans the following beginning and ending inventory levels (in units) for January:
Two units of raw material are needed to produce each unit of finished product. If the company plans to sell 960,000 units during April, the number of units it would need to manufacture during April would be: | ||
| [removed]A) | 1,020,000 units. | ||
| [removed]B) | 960,000 units. | ||
| [removed]C) | 900,000 units. | ||
| [removed]D) | 880,000 units. | ||
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| 4 | | Liko Company plans to sell 48,000 units during the month. If the company has 10,000 units on hand at the start of the month, and plans to have 8,000 units on hand at the end of the month, how many units must be produced during the month? | ||
| [removed]A) | 46,000. | ||
| [removed]B) | 48,000. | ||
| [removed]C) | 50,000. | ||
| [removed]D) | 56,000. | ||
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| 5 | | The management of Nicto Company plans to have an inventory at the end of each month equal to 20% of the next month's sales. Budgeted sales in units over the next three months are 80,000 in October, 120,000 in November, and 100,000 in December. Budgeted production for November would be: | ||
| [removed]A) | 140,000 units. | ||
| [removed]B) | 124,000 units. | ||
| [removed]C) | 116,000 units. | ||
| [removed]D) | 100,000 units. | ||
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| 6 | | The budget or schedule that provides the required data for the preparation of the direct materials budget is the: | ||
| [removed]A) | schedule of cash collections. | ||
| [removed]B) | raw materials purchases budget. | ||
| [removed]C) | production budget. | ||
| [removed]D) | cash budget. | ||
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| 7 | | Schuetz Company has budgeted production for next year as follows.
| ||
| [removed]A) | 320,000 pounds. | ||
| [removed]B) | 248,000 pounds. | ||
| [removed]C) | 132,000 pounds. | ||
| [removed]D) | 49,600 pounds. | ||
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| 8 | | Vertovec Company makes and sells a single product. Each unit of product requires 5.2 hours of labor at a labor rate of $9.10 per hour. The company needs to prepare a Direct Labor Budget for the second quarter of next year. The budgeted direct labor cost per unit of product would be: | ||
| [removed]A) | $28.00. | ||
| [removed]B) | $37.40. | ||
| [removed]C) | $41.60. | ||
| [removed]D) | $47.32. | ||
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| 9 | | Waggoner Company has a cash balance of $36,000 on April 1. The company is required to maintain a minimum cash balance of $24,000. During April expected cash receipts are $180,000. Expected cash disbursements during the month total $208,000. During April the company will need to borrow: | ||
| [removed]A) | $8,000. | ||
| [removed]B) | $12,000. | ||
| [removed]C) | $16,000. | ||
| [removed]D) | $28,000. | ||
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| 10 | | Simpson Company makes and sells a single product. Budgeted sales for April are $1,200,000. Gross margin is budgeted at 30% of sales. If the net income for April is budgeted at $160,000, budgeted selling and administrative expenses must be: | ||
| [removed]A) | $533,332. | ||
| [removed]B) | $408,000. | ||
| [removed]C) | $312,000. | ||
| [removed]D) | $200,000. | ||
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