ch06 - 1. 900,000 motorcycles 400,000 yen = 360,000,000,000...

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CHAPTER 6 MASTER BUDGET AND RESPONSIBILITY ACCOUNTING 6-1 The budgeting cycle includes the following elements: a. Planning the performance of the company as a whole as well as planning the performance of its subunits. Management agrees on what is expected. b. Providing a frame of reference, a set of specific expectations against which actual results can be compared. c. Investigating variations from plans. If necessary, corrective action follows investigation. d. Planning again, in light of feedback and changed conditions. 6-18 (5 min.) Direct materials purchases budget. Direct materials to be used in production (bottles) 2,500,000 Add target ending direct materials inventory (bottles) 80,000 Total requirements (bottles) 2,580,000 Deduct beginning direct materials inventory (bottles) 50,000 Direct materials to be purchased (bottles) 2,530,000 6-22 (15–20 min.) Revenues, production, and purchases budget.
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Unformatted text preview: 1. 900,000 motorcycles 400,000 yen = 360,000,000,000 yen 2. Budgeted sales (motorcycles) 900,000 Add target ending finished goods inventory 80,000 Total requirements 980,000 Deduct beginning finished goods inventory 100,000 Units to be produced 880,000 3. Direct materials to be used in production, 880,000 2 (wheels) 1,760,000 Add target ending direct materials inventory 60,000 Total requirements 1,820,000 Deduct beginning direct materials inventory 50,000 Direct materials to be purchased (wheels) 1,770,000 Cost per wheel in yen 16,000 Direct materials purchase cost in yen 28,320,000,000 Note the relatively small inventory of wheels. In Japan, suppliers tend to be located very close to the major manufacturer. Inventories are controlled by just-in-time and similar systems. Indeed, some direct materials inventories are almost nonexistent....
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