The following information pertains to the October operating budget for Flockhart Corporation. Budgeted sales for October $100,000 and November $200,000. Collections for sales are 60% in the month of sale and 40% the next month. Gross margin is 30% of sales. Administrative costs are $10,000 each month. Beginning accounts receivable (October 1) $20,000. Beginning inventory (October 1) $14,000. Beginning accounts payable (October 1) $60,000. (All from inventory purchases.) Purchases are paid in full the following month. Desired ending inventory is 20% of next month's cost of goods sold (COGS). No loans are outstanding on October 1 At the end of October, budgeted accounts receivable is: Answers: a.$20,000 A b.$40,000 B c. $60,000 C d. None of the above is correct D -------------------------------------------------------------------------------- Question #2 (18040) In a centralized organization: Answers: a.local-division managers do not need higher approval for most business decisions. A b.company-wide standard operating procedures are common. B c. local-division managers have an opportunity to gain decision-making experience. C d. decisions are made by local division managers. D -------------------------------------------------------------------------------- Question #3 (18042) Managers of profit centers are responsible for: Answers: a.costs and investments A b.revenues and costs B c. costs, revenues, and investments C d. costs D -------------------------------------------------------------------------------- Question #4 (18044) Human resources costs might be allocated to individual cost centers: Answers: a.based on the square footage each cost center uses. A b.based on the number of employees utilized by each individual center. B c. only if the allocation serves some decision-making purpose. C d. never, because it is a non-cash cost that should not be allocated. D -------------------------------------------------------------------------------- Question #5 (18047) The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. Assume that the Sundries department has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of: Answers: a.$40,000 A b.$32,000 B c. $29,000 C d. $22,000 D -------------------------------------------------------------------------------- Question #6 (18031) ________ specifies when items such as acquisitions for buildings and special-purpose equipment must be made to meet activity level objectives. Answers: a.The capital-spending plan A b.The production plan B c. The materials purchasing plan C d. The administrative and discretionary spending plan D -------------------------------------------------------------------------------- Question #7 (18046) The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. If the Fish & Meat department had been discontinued, the short-term effect on corporate profits would be a decrease of: Answers: a.$55,000 A b.$34,000 B c. $31,000 C d. $24,000 D -------------------------------------------------------------------------------- Question #8 (18027) Operating budgets and financial budgets: Answers: a.combined form the master budget. A b.are prepared before the master budget. B c. are prepared after the master budget. C d. have nothing to do with the master budget. D -------------------------------------------------------------------------------- Question #9 (18032) The sales plan and inventory plan is compared to available productive capacity levels and ________ is determined. Answers: a.an aggregate plan A b.a new sales plan B c. a materials purchasing plan C d. an administrative and discretionary spending plan D -------------------------------------------------------------------------------- Question #10 (18048) The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. Assume an advertising campaign could increase revenues for any of the products by $15,000. To maximize corporate profits, the ________ department should receive the advertising dollars. Assume the cost of the advertising campaign is less than the revenues it generates. Answers: a.Sundries A b.Fish & Meat B c. Produce C d. From the information given, the correct product line cannot be determined. D -------------------------------------------------------------------------------- Question #11 (18033) The following information pertains to the October operating budget for Flockhart Corporation. Budgeted sales for October $100,000 and November $200,000. Collections for sales are 60% in the month of sale and 40% the next month. Gross margin is 30% of sales. Administrative costs are $10,000 each month. Beginning accounts receivable (October 1) $20,000. Beginning inventory (October 1) $14,000. Beginning accounts payable (October 1) $60,000. (All from inventory purchases.) Purchases are paid in full the following month. Desired ending inventory is 20% of next month's cost of goods sold (COGS). No loans are outstanding on October 1 For October, budgeted cash collections are: Answers: a.$20,000 A b.$60,000 B c. $80,000 C d. None of the above is correct D -------------------------------------------------------------------------------- Question #12 (18043) Segment margin is calculated as follows: Answers: a.Revenues less flexible costs. A b.Revenues less expenses. B c. Revenues less direct costs. C d. Revenues less variable costs. D -------------------------------------------------------------------------------- Question #13 (18049) The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. If a company subscribes to the controllability principle, then it would be best to evaluate product line management on: Answers: a.contribution margin A b.corporate profit B c. segment income C d. segment margin D -------------------------------------------------------------------------------- Question #14 (18045) The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. If the Produce department had been eliminated prior to this year, the company would have reported: Answers: a.greater corporate profits. A b.the same amount of corporate profits. B c. less corporate profits. C d. resulting profits cannot be determined. D -------------------------------------------------------------------------------- Question #15 (18038) The following information pertains to the October operating budget for Flockhart Corporation. Budgeted sales for October $100,000 and November $200,000. Collections for sales are 60% in the month of sale and 40% the next month. Gross margin is 30% of sales. Administrative costs are $10,000 each month. Beginning accounts receivable (October 1) $20,000. Beginning inventory (October 1) $14,000. Beginning accounts payable (October 1) $60,000. (All from inventory purchases.) Purchases are paid in full the following month. Desired ending inventory is 20% of next month's cost of goods sold (COGS). No loans are outstanding on October 1 At the end of October, budgeted ending inventory is: Answers: a.$20,000 A b.$28,000 B c. $40,000 C d. None of the above is correct D