The controller of Digital Storage, Inc. instructs you to prepare a monthly cash budget for
the next three months. You are presented with the following budget information:
Selling and administrative expenses
Chapter 14: Managerial Accounting Concepts and Principles
Managerial and Financial Accounting
MA: financial and nonfinancial information to an organizations managers & other internal decision makers. FA: general purpose financial information to those wh
CVP analysis is used to answer questions such as: 1) What sales volume is needed to earn a target income? 2) What is the change in income if selling prices decline and sales volume increases? 3) How much
does income increase if we install a new machine t
Budget Process: Many companies use a continuous (rolling) budget that drops off the immediate past month or quarter and adds one future month or one future quarter as the year progresses. A rolling budget allows a
company to continuously work with a full
Practice questions for Ch14
1. Managerial accounting information:
A. Is used mainly by external users.
B. Involves gathering information about costs for planning and control decisions.
C. Is generally the only accounting information available to managers.
1. Answer: D
2. Answer: C
3. Answer: E
Old break-even point in units = $720,000/($30 - $18) = 60,000 units
New break-even point in units = $900,000/($30 - $15) = 60,000 units
4. Answer: E
5. Answer: D
Units required to earn target