ACCT 434 Week 2 Quiz Answers (Source 2) Devry

1. Question :

(TCO 2) Benchmarking is

4.

Question :

(TCO 2) A flexible budget

5.

Question :

(TCO 2) An unfavorable variance indicates that

7.

Question :

(TCO 2) Overhead costs have been increasing due to all of the following except

9.

Question :

(TCO 2) Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 2008, through June 30, 2009.

July 1, 2008 June 30, 2009
Raw material (note) 40,000 10,000
Work in process 8,000 8,000 
Finished goods 30,000 5,000
(note) Three units of raw material are needed to produce each unit of finished product.

If Hester Company plans to sell 500,000 units during the 2008-2009 fiscal year, the number of units it would have to manufacture during the year would be

10.

Question :

(TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table:

February March April

Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000

Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. ll purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.

Brenton's budgeted total cash receipts in April are