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Question 1The ideal financial planning process would beTop-down planning Bottom-up planning A combination of top-down and bottom-up planningNone of the given choicesQuestion 2The most important budget in the master budget is likely theCash budget Capital budget Personnel budget Purchases budgetQuest...

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Question 1

Question 5

The ideal financial planning process would be

A budget that identifies revenues and cost with an individual controlling their incurrence is

Top-down planning Bottom-up planning A combination of top-down and bottom-up planning None of the given choices

Master budget Product budget Responsibility budget None of the above

Question 2

Question 6

The most important budget in the master budget is likely the

REB Service Co. is a computer service center. For the month, REB had the following operating statistics:

Cash budget Capital budget

Sales

₱450,000

Operating income

25,000

Net profit after taxes

8,000

Total assets

500,000

Shareholders’ equity

200,000

Cost of capital

6%

Personnel budget Purchases budget

Question 3 If a company wishes to establish a factory overhead budget system in which estimated costs can be derived directly from estimates of activity level, it should prepare a Flexible budget Program budget Discretionary budget Manufacturing budget

Question 4 An overly optimistic sales budget may result in Increases in selling prices late in the year Insufficient inventories

Based on the above information, which of the following statements is true? REB has a Residual income of (₱22,000). Residual income of (₱5,000). Return on investment of 1.6%. Return on investment of 4%.

Increased sales during the year Excessive inventories

Question 7

Waterfall Industries is located in Kansas and has four branch offices throughout the state. The following are the operating results from last year:

likely subject to the control of the profit center’s manager? ₱33,000 ₱37,000 ₱50,000 ₱70,000

Question 9 The following information pertains to Wildflower Company for the year ended December 31, 2017:

Which branch had the highest return on investment? Garden City

Sales

₱600,000

Income

100,000

Capital Investment

400,000

Which of the following equations should be used to complete Eagle Company’s return on investment (ROI)?

Kansas City Salina Wichita

(6/4) x (1/6) = ROI (4/6) x (1/6) = ROI

Question 8 The following is the summarized income statement of Brave Company’s profit center for May:

(4/6) x (6/1) = ROI (6/4) x (6/1) = ROI

Question 10 If Division A has a 10% return on sales, income of ₱5,000, and an investment turnover of 4 times, divisional investment is ₱5,000. ₱12,500 Whi ch of the following amounts is most

₱20,000

₱50,000

Question 11 The following information pertains to Black Widow Company’s Gold Division for the current year:

If Jaguar Company treats the Silver Division as an investment center for performance measurement purposes, what is the before-tax return on investment for 2016? 16.67% 19.79%

Sales

₱311,000

Variable cost

250,000

22.54% 34.78%

Question 13 Traceable fixed cost

50,000

Average invested capital

40,000

Imputed interest rate

10%

What was Gold Division’s return on investment? 10% 13.33% 27.50% 30%

Question 12 Listed below is selected financial information for Silver Division of Jaguar Company for 2017:

Fairmount, Inc. uses an accounting system that charges costs to the manager who has been delegated the authority to make the decisions incurring the costs. For example, if the sales manager accepts a rush order that will result in higher-than-normal manufacturing 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 Responsibility accounting. Functional accounting Reciprocal allocation. Transfer price accounting.

Question 14 In responsibility accounting, a center’s performance is measured by controllable costs. Controllable costs are best described as including Direct material and direct labor only. Only those costs that the manager can influence in the current time period. Only discretionary costs.

Those costs about which the manager is knowledgeable and informed.

Question 15 A segment of an organization is referred to as a service center if it has Authority to make decisions affecting the major determinants of profit including the power to choose its markets and sources of supply. Authority to provide specialized support to other units within the organization. Responsibility for combining the raw materials, direct labor, and other factors of production into a final output. Responsibility for developing markets and selling the output of the organization

Question 16 A successful responsibility accounting reporting system is dependent upon A reasonable separation of costs into their fixed and variable components since fixed costs are not controllable and must be eliminated from the responsibility report. Identification of the management level at which all costs are controllable. The correct allocation of controllable variable costs. The proper delegation of responsibility and authority.

performance of sub-units is the establishment of Cost centers. Marketing centers Product centers. Revenue centers.

Question 18 Montalba Company’s sales budget shows the following expected sales for the following year: The inventory at December 31 of the prior year was budgeted at 36,000 units. The quantity of finished goods inventory at the end of each quarter is to equal 30% of the next quarter’s budgeted unit sales. How many units should be produced during the first quarter? 48,000 132,000 96,000 144,000

Question 19 Guitar Company manufactures a single product. It keeps its inventory of finished goods at twice the coming month’s budgeted sales and inventory of raw materials at 150% of the coming month’s budgeted production requirements. Each unit of product requires two pounds of materials. The production budgets in units consists of the following:

Question 17

May

1,000

In a highly decentralized organization, the best option for measuring the

June

1,200

July

1,300

August

1,600

Raw material purchases in June would be: 2,600 pounds 2,400 pounds 1,800 pounds 2,700 pounds

P 322,200

Question 21 If there were 30,000 pounds of raw materials on hand on January 1. 60,000 pounds are desired for inventory at December 31, and 180,000 pounds are required for annual production, how many pounds of raw materials should be purchased during the year?

Question 20

150,000 pounds

Mark Spender Manufacturing Company sells birdhouses. The company has prepared the following forecast for the third quarter of 2018:

240,000 pounds

June

5,000 units

August

6,000 units

September

10,000 units

Inventory of finished goods in June 30, 2018 is budgeted at 1,000 units. Management would like the desired quantity of finished goods inventory at the end of each month to equal 20 percent of next month’s budgeted sales. October’s projected sales are 12,000 units. Each completed units of finished product requires 3 square feet of cedar at a cost of P15 per square foot. The company has determined that it needs 10 percent of next month’s raw material needs on hand at the end of each month. The cost of the direct material that should be purchased in August is P 329,400 P 306,000 P 214,000

120,000 pounds 210,000 pounds

Question 22 If the required direct materials purchases are 8,000 pounds and the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct material in pounds? 20,000 4,000 12,000 32,000

Question 23 Florence Company plans to sell 400,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month’s estimated sales. There are 300,000 finished units in the inventory on June 30. Each unit of

finished product requires four pounds of direct materials at a cost of P 2.50 per pound. There are 800,000 pounds of direct materials in the inventory on June 30. How many units should be produced for the three-month period ending September 30? 1,260,000 1,328,000 1,331,440 1,424,050

Question 24 Lida Company has the following sales forecasts for the selected three-month period in 2018: Month

Sales

April

P 12,000

May

7,000

June

8,000

Aloha Company expect its June sales to be P 300,000, which is 25% higher than its May sales. Purchases were P 200,000 in May and are expected to be P 240,000 in June. All sales are on credit and are collected as follows: 80% in the month of sales and 20% in the following month. All payments in the month of sales are given 2% discount. Sixty percent of purchases are paid in the month of purchase to take advantage of purchase term of 1/10, n/40. The remaining amount is paid in the following month. The beginning cash balance on June 1 is P 20,000. The ending cash balance on June 30 would be:

P 80,640

5,000

Minimum cash balance is P5,000. Cash can be borrowed on P 1,000 increments from the local bank (assume no interest charges) How much cash would be collected in June from sales?

P 8,500

Question 25

P 73,000

Accounts receivable balance (April 1, 2018) P 10,000

P 7,700

P 10,000

P 64,160

Seventy percent of sales are collected in the month of the sales and the remainder is collected in the following month.

Cash balance (April 1, 2018)

P 8,000

P 85,440

Question 26 Aviva Company has the following historical pattern on its credit sales 70 percent collected in month of sale 15 percent collected in the first month after sale 10 percent collected in the second month after sale 4 percent collected in the third month after sale 2 percent uncollectible

The sales on open account have been budgeted for the last six months of 2018 are shown below: July

P 60,000

August

P 70,000

September

P 80,000

October

P 90,000

November

P100,000

December

P 85,000

The estimated cash collection during the fourth calendar quarter from sales made on open account during fourth calendar quarter would be: P 172,500 P 230,000 P 265,400 P 251,400...