(TCO 2) Benchmarking is

ACCT 434 Advanced Cost Management Quiz 2 Answers


  1. (TCO 2) Benchmarking is
  2. (TCO 2) To gain the benefits of budgeting, _____ must understand and support the budget.
  3. (TCO 2) Financial budgets include the
  4. (TCO 2) A flexible budget
  5. (TCO 2) A favorable variance indicates that
  6. (TCO 2) Performance evaluation using variance analysis should guard against
  7. (TCO 2) Overhead costs have been increasing due to all of the following except
  8. (TCO 2) Katie Enterprises reports the year-end information from 20X8 as follows: Sales (70,000 units) $560,000; Cost of goods sold 210,000; Gross margin 350,000; Operating expenses 200,000; Operating income $150,000. Katie is developing the 20X2 budget. In 20X2, the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold for 20X2?
  9. (TCO 2) Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 20x2, through June 30, 20x3. 
                                            July 1, 20x2                   June 30, 20x3
    Raw material (note)               40,000                          10,000
    Work in process                      8,000                            8,000
    Finished goods                       30,000                           5,000

    (note) Three units of raw material are needed to produce each unit of finished product.
    If Hester Company plans to sell 600,000 units during the 20x2-20x3 fiscal year, the number of units it would have to manufacture during the year would be
  10. (TCO 2) Information pertaining to Brenton Corporation's sales revenue is presented in the following table. 
                                             February              March               April
               Cash Sales             $160,000             $150,000           $120,000
               Credit Sales             300,000               400,000             280,000
                   Total Sales         $460,000             $550,000            $400,000
    Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month's projected total sales. 11 purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
    Brenton's budgeted total cash payments in March for inventory purchases are