Exam 2 review

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Unformatted text preview: udgeted income statement is part of ­­­­­ budget, while budgeted balance sheet is part of ­­­­­ budget. Chapter 6 Chapter 6 • You need to know: – Kaizen. – Kaizen budgeting. – What is wrong with comparing a company’s performance against actual results of last year. – That budgeted financial statements are some times called Pro forma statements. Chapter 6 Chapter 6 • You need to know: – Operating budget includes: ­­­­­­­­ – Financial budget includes:­­­­­­­­­­ Chapter 6 Chapter 6 • DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 900 units. How many units should be produced next year? 18,000 + 3,000 ­ 900 = 20,100 • units Chapter 6 Chapter 6 • What are the 20x4 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively? 20,500 x $2.00 = $41,000; 20,500 • x $4.00 = $82,000; 20,500 x $0.80 = $16,400 Chapter 6 Chapter 6 • The following information pertains to the January • • • • • • • operating budget for Casey Corporation, a retailer: Budgeted sales are $200,000 for January Collections of sales are 50% in the month of sale and 50% the next month Cost of goods sold averages 70% of sales Merchandise purchases total $150,000 in January Marketing costs are $3,000 each month Distribution costs are $5,000 each month Administrative costs are $10,000 each month Chapter 6 Chapter 6 • For January, budgeted gross margin is? • For January, the amount budgeted for the nonmanufacturing costs budget is? For January, budgeted net income is ? • Chapter 6 Chapter 6 • • • For January, budgeted gross margin is? $200,000 ­ $140,000 = $60,000 For January, the amount budgeted for the nonmanufacturing costs budget is? • $3,000 + $5,000 + $10,000 = $18,000 For January, budgeted net income is ? • • $200,000 ­ $140,000 ­ $3,000 ­ $5,000 ­ $10,000 = $42,000 Chapter 6 Chapter 6 • Fiscal Company has the following sales budget for the last six • • • months of 20x3: July August September 94,000 $100,000 80,000 110,000 October $ 90,000 November 100,000 December • Historically, the cash collection of sales has been as follows: 65% of sales collected in the month of sale, • 25% of sales collected in the month following the sale, •...
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This note was uploaded on 04/05/2010 for the course BUSINESS 11 taught by Professor 11 during the Spring '10 term at University of Hawaii, Manoa.

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