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I-Rev7 - LESSON 7 Review material Review questions Question...

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LESSON 7 Review material Review questions Question 1 — Multiple choice a. Which of the following is not an advantage of budgets? 1) Budgets help communicate organizational goals since they reflect the forecast results of the strategic choices made by top management. 2) Budgets may be used as corporate models to forecast the results of proposed changes in strategy during the strategy formulation stage. 3) Budgets assist in coordinating the activities of the managers involved. 4) Budgets help to set the mission and define the scope of the business. b. The master budget measures the impact of which of the following? 1) Managerial and long term decisions 2) Operating and managerial decisions 3) Financing and managerial decisions 4) Operating and financial decisions c. A production budget expressed in units is equal to which of the following? 1) Sales (budget) + beginning inventory + desired ending inventory 2) Sales (budget) – beginning inventory – desired ending inventory 3) Sales (budget) + beginning inventory – desired ending inventory 4) Sales (budget) – beginning inventory + desired ending inventory d. Sky View has budgeted for the next year, sales of 100,000 units with a desired ending finished goods inventory of 10,000 units, and a beginning finished goods inventory of 6,000 units. Assume that all other inventories are zero. How many units should be produced? 1) 101,000 units 2) 102,000 units 3) 103,000 units 4) 104,000 units e. Sunshine Company has scheduled its production to 60,000 units and targeted a sales volume of 65,000 units for the next quarter. The company has 10,000 units of finished goods in the beginning inventory. What is the desired ending finished goods inventory? 1) 2,000 units 2) 3,000 units 3) 4,000 units 4) 5,000 units Management Accounting Fundamentals Review material 7 1
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Use the following information to answer questions (f) and (g): Surround Systems manufactures one model of powerful speakers. It expects to sell 10,000 speakers in 20X8. The company had enough beginning inventory of direct materials to produce 12,000 units. Beginning inventory of finished units totalled 500 with a desired ending inventory of 500 units. The speakers sell for €400 a unit and the company keeps no work-in-progress inventory. Direct materials costs for each speaker total €120 while direct labour is €50. Manufacturing overhead costs total €80 per unit.
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