1)

Geneva Co. reports the following information for July:

Sales	$750,000
Variable costs	225,000
Fixed costs	100,000

Calculate the contribution margin for July.

$525,000

$425,000

$650,000

$750,000

2)

Assuming fixed costs remain constant, and a company produces more units than it sells, then income under absorption costing is less than income under variable costing. Answer:

True

False

3)

A plan that lists dollar amounts to be received from disposing of plant assets and dollar amounts to be spent on purchasing additional plant assets is called a:

Cash budget.

Capital expenditures budget.

Rolling budget.

Sales budget.

Production budget.

4)

The master budget process usually ends with:

The production budget.

The sales budget.

The selling expense budget.

The budgeted balance sheet.

The overhead budget.

5)

Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

	January	February	March
Material purchases	$12,040	14,150	10,970

Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 30 Accounts Payable balance is:

$6,500.

$7,075.

$12,040.

$6,020

$9,270.

6)

Zhang Industries budgets production of 300 units in June and 310 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate if $14 per hour. The indirect labor rate is $21.00 per hour. Compute the budgeted direct labor cost for July.

$6,300.

$6,510.

$9,450.

$9,765.

$16,275.

7)

A plan that states the number of units to be produced in a future period, based on the projected unit sales and inventory considerations, is the:

Sales budget.

Merchandise purchases budget.

Production budget.

Cash budget.

Manufacturing budget.

8)

Flagstaff Company has budgeted production units for July of 7,900 units. Variable factory overhead is $1.20 per unit. Budgeted fixed factory overhead is $19,000, which includes $3,000 of factory equipment depreciation. Compute the total budgeted overhead to be reported on the factory overhead budget for the month.

$25,480.

$19,000.

$23,900.

$28,480.

$9,480.