cost 3 (quizzes)

establishing organization goals as a management function is more important

at top management levels

a master budget:

indicates sales, production, and costs of the organization for the coming year

which of the following is not a component of an overall organization plan for an organization

profit plans of competitors

in developing a master budget for a manufacturing company, which one of the following items should be done first

development of a sales budget

the forecasting method in which the individual forecasts of group members are submitted anonymously and evaluated by the group as a whole is called

the delphi technique

the statistical method of forecasting that relies heavily on regression models is called

econometric models

which of the following budgets is not required in a service organization

cost of goods sold

the number of units required for production is equal to

budgeted sales plus units in the ending inventory minus the units in the beginning inventory

Oklahoma Telephone Company has been forced by competition to put much more emphasis on planning and controlling its costs. Accordingly, the company’s controller has suggested initiating a formal budgeting process. Which of the following steps will not help the company gain maximum acceptance by employees of the proposed budgeting system? (CMA adapted)

implementing the change quickly

which of the following statements regarding variances is false?

a favorable variance is always good

the basic difference between a master budget and a flexible budget is that a

master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range

the slope of the flexible budget line is the

variable cost per unit

the intercept of the flexible budget is

fixed costs

in the general model, a price variance is calculated as

(AP x AQ) - (SP x AQ)

price variance formula

AQ (AP - SP)

efficiency variance formula

SP (AQ - SQ)

FOH price variance formula

actual foh - budgeted foh

FOH production volume variance

applied foh - budgeted foh

variable production cost variances formula

units produced (actual variable cost - standard variable cost)

budget revenues formula

SP * SQ

Sales mix variance formula

SCM (AQ - ASQ)

sales quantity variance formula

SCM (ASQ - SQ)

industry volume variance

(AIV - BIV) x BMS x BCM

market share variance formula

(AMS - BMS) x AIV x BCM

Steps in master budgeting

1 sales budget

2 production budget

3 marketing & admin budget

4 income statement

5 cash budget

6 balance sheet

standards are estimates based upon ________

current conditions

What is vargas’ industry volume variance?

$42,331.28

what was the total actual cost of the direct materials purchased during may?

$11,270

what is the sales activity variance for the basic model?

$2,011,600