13) Never Ending Battle for Truth Justice and the American Way LLC makes one product and it provided the following information to help prepare the master budget for the next four months of operations:

a.The budgeted selling price per unit is $100. Budgeted unit sales for April, May, June, and July are 7,000, 11,000, 13,000, and 14,000 units, respectively. All sales are on credit. b.Regarding credit sales, 40% are collected in the month of the sale and 50% in the following month and the remaining 9 % in second month following sales, 1 % likely uncollectible .

c.The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct

labor-hours. d.Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead

1s ZerO. The budgeted accounts receivable balance at the end of June is closest to:

A) $747,000 B) $866,000 C) $767,000 D) $780,000

14) Odell Beckham Corporation is a small wholesaler of helmets. Data regarding the store's operations follow:

Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for

January. Collections are expected to be 80% in the month of sale and 20% in the month following the

sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes.

The cost of December merchandise purchases would be:

A) $255,000 B) $139,500 C) $235,500 D) $240,000

15) Verlander Cy Young LLC has provided the following data concerning one of the products in its standard cost system.

Inputs Standard Quantity or Standard Price per Unit of Output Standard input Direct materials 6.6 grams per unit Standard cost $7.70 per gram

The company has reported the following actual results for the product for June:

Actual output 1000 units Raw materials purchased =6700 grams Actual cost of raw materials= $ 52,260

Raw materials used in production =6700 grams

The raw materials price variance for the month is closest to:

A) $770 U B) $770 F C) $670 U D) $670 F

16) Same set of data as #15 (Verlander) , the materials quantity variance is closest to: A) $670F B) $770U C) $770F

D) $670U

17) Willie Wonka makes a product whose direct labor standards are 0.5 hours per unit and $20.00 per hour. In November the company produced 1920 units using 950 direct labor- hours. The actual direct labor cost was $18,525.

The labor rate variance for November is: A) $200F B) $200U C) $475F

D) $ 4 75 U

18) Same set of data from #17 on Willie Wonka. The labor efficiency variance for November is: A) $200F B) $200U

C) $475F D) $475U

19) Which of the following statements is true? l .The direct labor budget begins with the required production in units from the production budget. 2.The direct labor budget shows the direct labor-hours required to satisfy the materials purchases budget.

A) Only statement I is true. B) Only statement II is true. C) Both statements are true. D) Neither statement is true.

20) Which of the following budgets are prepared after the sales budget?

Budgeted Income Statement A) Yes B) Yes C)No Yes D)No No

Direct Labor Budget Yes No

21) Which of the following statements is correct concerning the Cash Budget?

A) It is not necessary to prepare any other budgets before preparing the Cash Budget.

B) The Cash Budget should be prepared after the Budgeted Income Statement.

C) The Cash Budget should be prepared after the Budgeted Balance Sheet.

D) The Cash Budget builds on earlier budgets and schedules as well as additional data.

22) Which of the following statements is true? I.To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity. 2.Fixed costs should be ignored when evaluating how well a manager has controlled costs.

A) Only statement I is true. B) Only statement II is true. C) Both statements are true. D) Neither statement is true.

23) Which of the following statements is true?

I.Waste on the production line will result in an unfavorable materials price variance. 2.A favorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period

A) Only statement I is true. B) Only statement II is true. C) Both statements are true. D) Neither statement is true.

24) Which of the following statements is true? l.A revenue variance is favorable if the revenue in the static planning budget is less than the revenue in the flexible budget. 2.A favorable spending variance occurs when the actual cost is less than the amount of the cost in the static planning budget. 3.A revenue variance is favorable if the actual revenue is greater than the revenue in the flexible budget.

A) Only statement I is true. B) Only statement III is true. C) All of the statements are true. D) None of the statements are true.

25) When using a flexible budget, a increase in activity within the relevant range: A) decreases variable cost per unit. B) increases variable cost per unit. C) decreases total costs.

D) increases total costs.