Questions on Operating and Financial Budget

Questions on Operating and Financial Budget in $15

E22-24 Preparing an operating budget

Dunbar Company manufactures drinking glasses. One unit is a package of 8 glasses, which sells for $20. Dunbar projects sales for April will be 3,000 packages, with sales increasing by 100 packages per month for May, June, and July. On April 1, Dunbar has 250 packages on hand but desires to maintain an ending inventory of 10% of the next month’s sales. Prepare a sales budget and a production budget for Dunbar for April, May, and June.

E22-27 Preparing a  budget

Cramer Company projects the following sales for the first three months of the year: $12,500 in January; $13,240 in February; and $14,600 in March. The company expects 70% of the sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar.

ACC 300 Entire Course 2015

ACC 300 Entire Course 2015 

ACC300 Entire Course 2015

ACC/300 Complete Course 2015

Following files are available with the answer:

  1. Week 2 – Accounting Equation Paper (500 Words)
  2. Week 3 – P1-3A and P3-5A Solutions
  3. Week 3 – Accounting Terms Paper and P4-2A Solutions
  4. Week 4 – P2-6A and P13-2A Solutions
  5. Week 5 – Publicly Traded Corporation Paper
  6. Week 5 – PE-2, E7-5, E7-6 and E7-9 Solutions
  7. Week 5 Final Exam Answer Guide – 30 Questions

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ACC 423 FINAL EXAM

ACC 423 FINAL EXAM in $24 only

ACC 423

1) Proceeds from an issue of debt securities having stock warrants should NOT be allocated between debt and equity features when
A. the allocation would result in a discount on the debt security
B. the warrants issued with the debt securities are nondetachable
C. exercise of the warrants within the next few fiscal periods seems remote
D. the market value of the warrants is NOT readily available

2) The conversion of preferred stock may be recorded by the

A. market value method
B. par value method
C. book value method
D. incremental method

Evaluating a Company’s Budget Procedures of Springfield Corporation

Budgeting

Evaluating a Company’s Budget Procedures of Springfield Corporation        in $9 only (Instant Download)

Source: Managerial Accounting by Garrison  11E  Chapter 9: Profit Planning

Springfield Corporation operates on a calendar-year basis.  It begins the annual budgeting process in late August, when the president establishes targets for the total dollar sales and the net income before taxes for the next year. The sales target is given to the Marketing Department, where the marketing manager formulates a sales budget by product line in both units and dollars.  From this budget, sales quotas by product line in units and dollars are established for each of the corporation’s sales districts. The marketing manager also estimates the cost of the marketing activities required to support the target sales volume and prepares a tentative marketing expense budget. The executive vice president uses the sales and profit targets, the sales budget by product line, and the tentative marketing expense budget to determine the dollar amount that can be devoted to manufacturing and corporate expenses, and then forwards to the Production Department the product-line sales budget in units and the total dollar amount that can be devoted to manufacturing. The production manager meets with the factory managers to develop a manufacturing plan that will produce the required units when needed within the cost constraints set by the executive vice president.

The budgeting process usually comes to a halt at this point because the Production Department does not consider the financial resources allocated to be adequate. When this standstill occurs, the vice president of finance, the executive vice president, the marketing manager, and the production manager meet to determine the final budgets for each of the areas.  This normally results in a modest increase in the total amount available for manufacturing costs, while the marketing expense and corporate office expense budgets are cut.  The total sales and net income figures proposed by the president are seldom changed.  Although the participants are seldom pleased with the compromise, these budgets are final.  Each executive then develops a new detailed budget for the operations in his or her area.

None of the areas has achieved its budget in recent years.  Sales often run below the target.  When budgeted sales are not achieved, each area is expected to cut costs so that the president’s profit target can still be met.  However, the profit target is seldom met because costs are not cut enough.  In fact, costs often run above the original budget in all functional areas.

The president is disturbed that Springfield has not been able to meet the sales and profit targets.  He hired a consultant with considerable experience with companies in Springfield’s industry.  The consultant reviewed the budgets for the past four years.  He concluded that the product-line sales budgets were reasonable and that the cost and expense budgets were adequate for the budgeted sales and production levels.

1. Discuss how the budgeting process as employed by Springfield contributes to the failure to achieve the president’s sales and profit targets.

Sample Answer:

The budgeting process as employed by Springfield contributes to the failure to achieve the president’s sales and profit targets. The root cause of failure lies in the budgeting of the Marketing Department where targets (sales quotas and budget is distributed at the same time. The marketing expense budget is bound to fail because the allotment of budget does not automatically lead to sales and profit targets. Further, the sales and profit targets cannot be used to set manufacturing and corporate expenses…..

2. How would you change the cost measurements?

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Managerial Accounting: Objective Type Questions

Willard Manufacturing Company building, St. Al...

Managerial Accounting: Objective Type Questions in $2.50
1.Stevens Manufacturing Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $516,000; beginning finished goods inventory, $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Stevens Manufacturing Company’s cost of goods sold for the year isa. $504,000.b. $528,000.c. $476,000.d. $252,000.2. Nolte Manufacturing Company reported the following year-end information:Beginning work in process inventory             $360,000Beginning raw materials inventory                  $100,000Ending work in process inventory                   $300,000Ending raw materials inventory                       $160,000Raw materials purchased                                $320,000Direct labor                                                     $300,000

Manufacturing overhead                                 $200,000