University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

357

Pages:

2
Author:

stud_ice13

QS 20-1: Budget Motivation (C1) 1. Employees should have the opportunity to explain differences from budgeted amounts – Yes 2. Budgets should include budgetary slack – No 3. Employees impacted by a budget should be consulted when it is prepared – Yes 4. Goals in a budget should be set low so targets can always be reached – No 5. Budgetary goals should be attainable – Yes QS 20-2: Budgeting Benefits (C1) 1. 2. 3. 4. 5. Budgets help coordinate activities across departments – Yes A budget forces managers to spend time planning for the future – Yes Some employees might overstate expenses in budgets – No Budgets can lead to excessive pressure to meet budgeted results – No Budgets can provide incentives for good performance – Yes QS 20-3: Sales Budget (P1) • Given Information: o May Sales: 1,000 units o Price per Unit: $250 o Growth Rate: 4% per month (a) Budgeted sales units for June: 1,000×(1+0.04)=1,040 units (b) Sales Budget for June: 1,040 units×250=260,000 Sales Budget for June: o o Budgeted Sales Units: 1,040 Sales Revenue: $260,000 QS 20-4: Sales Budget (P1) • Given Information: o Selling Price: $50 per unit o Sales Units: January: 1,000; February: 1,200; March: 1,300 Month Budgeted Sales Units Price per Unit Sales Revenue January 1,000 February 1,200 March 1,300 $50 $50 $50 $50,000 $60,000 $65,000 QS 20-5: Production Budget (P1) • Given Information: o Sales Units: May: 220 units; June: 240 units o Ending Inventory: 25% of next month’s sales o April 30 Ending Inventory: 55 units Production Budget for May: Required Units for May=Sales Units for May+Desired Ending Inventory for May− Beginning Inventory Desired Ending Inventory for May=25%×240=60 Production for May=220+60−55=225