Certified Management Accountants must understand budgeting. Access the Institute of Management Accountants website (imanet.org), click on the “CMA Certification” tab, and select “Taking the Exam.” Scroll down and select “Review the Most Recent Content Specifications Outline.” Search for “budgeting methodologies.” (a) List the budgeting methodologies that are covered on the CMA exam. Search for “annual profit plan.” (b) List the types of budgets covered on the CMA exam.
> How does Tesla Motor’s strategy fit with the various strategy definitions in Figure 1.1?
> Which leaders are more transformational, which more transactional and which situational (see Section 9.4)?
> What reforms to these systems would you recommend? What downsides to these reforms might there be?
> Compare the different views of leadership, particularly with regard to knowledge, courage and people. What are the commonalities and differences?
> How are flexible budget reports useful in management by exception?
> What is the standard overhead rate? How is it computed?
> In an analysis of overhead cost variances, what is the controllable variance and what causes it?
> In an analysis of fixed overhead cost variances, what is the volume variance?
> Each member of the team is to assume responsibility for one of the following tasks. a. Journalizing in the purchases journal. b. Journalizing in the cash payments journal. c. Maintaining and verifying the accounts payable ledger. d. Journalizing in the s
> Assume an airline is considering an investment in a new baggage handling system. Separate into teams and identify at least three qualitative factors that should be considered in this investment decision.
> The following calendar-year information is taken from the adjusted trial balance and other records of Dahlia Company. Required 1. Each team member is to be responsible for computing one of the following amounts. Do not duplicate your teammatesâ
> This activity requires teamwork to reinforce understanding of accounting for treasury stock. 1. Write a brief team statement (a) generalizing what happens to a corporation’s financial position when it engages in a stock buyback and (b) identifying reason
> Each team member is to become an expert on one depreciation method to facilitate teammates’ understanding of that method. Follow these procedures: a. Each team member is to select an area of expertise from one of the following depreciation methods: strai
> Santana Rey receives the March bank statement for Business Solutions on April 11, 2022. The March 31 bank statement shows an ending cash balance of $67,566. The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,057 as o
> Assume that Santana Rey expands Business Solutions’ system to include special journals. Required 1. Locate the transactions related to January through March 2022 for Business Solutions in Chapter 5. 2. Enter the Business Solutions transactions for Janua
> Santana Rey of Business Solutions is evaluating her inventory to determine whether it must be adjusted based on lower of cost or market rules. Business Solutions has three different types of software in its inventory, and the following information is ava
> Describe the concept of management by exception and explain how standard costs help managers apply this concept to control costs.
> Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following cha
> The December 31, 2021, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2021) follows. Required 1. Prepare an income statement for the three months ended December 31, 2021. 2. Prepare a statement
> After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. (Transactions for the first two months are described in the Chapter 2 serial problem.) The November 30, 2021, unadjusted trial ba
> On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The company’s initial chart of accounts
> On October 1, 2021, Santana Rey launched a computer services company, Business Solutions that is organized as a proprietorship and provides consulting services, computer system installations, and custom program development. Required Create a table like
> This serial problem began in Chapter 1 and continues through most of the book. If previous chapter segments were not completed, the serial problem can begin at this point. SP 25 Santana Rey sees that Business Solutions’ line of computer
> SP 26 Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $300,000 and to have a six-year life and no salvage valu
> Santana Rey, owner of Business Solutions, diversifies her business by also manufacturing computer workstation furniture. Required 1. Classify the following manufacturing costs of Business Solutions as either direct (D) or indirect (I). 2. Prepare a sche
> Use the following selected data from Business Solutions’ income statement for the three months ended March 31, 2022, and from its March 31, 2022, balance sheet to complete the requirements. Required 1. Compute the gross margin ratio (b
> Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business. (Although the serial problem allowed for various ownership changes in earlier chapters, we will prepare the statement of cash flows using the followi
> What formula can be used to compute total budgeted costs at any activity level?
> While reviewing the March 31, 2022, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market statement shows that the funds are earning an annualized return of 0
> Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources. a. Santana’s sister Cicely
> Serial problem began in Chapter 1. If previous chapter segments were not completed, the serial problem can begin at this point. It is available in Connect with an algorithmic option. At the start of 2022, Santana Rey is considering adding a partner to he
> Selected ledger account balances for Business Solutions follow. Required 1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2022. Compute amounts for the year ended December 31, 2022, for Depreciation
> Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $44,000 during the first three months of 2022 and that the Accounts Receivable balance on Ma
> Home Demo reports the following results. (a) Compute Home Demo’s return on assets. (b) Is Home Demo’s return on assets better than the 11% return of Lows Hardware (a competitor)?
> Identify the following cash flows as reported under either operating activities, investing activities, or financing activities. 1. Cash purchase of equipment 2. Cash paid for land 3. Cash paid for advertising 4. Cash paid for wages 5. Cash paid on accoun
> Use the information in QS 1-15 to prepare a December 31 balance sheet for Hawking. Hint: Hawking, Capital, December 31, equals $15,700.
> Complete the following table with either a yes or no regarding the attributes of a sole proprietorship, partnership, corporation, and limited liability company (LLC).
> Identify the following users as either External users or internal users. a. Customers b. Suppliers c. External auditors d. Business press e. Managers f. District attorney g. Shareholders h. Lenders i. Controllers j. FBI and IRS k. Consumer group l. Vot
> Coca-Cola redesigned its bottle to reduce its use of glass, thus lowering its bottle’s weight and CO2 emissions. Which budgets in the company’s master budget will this redesign impact?
> Choose the term or phrase below that best completes each statement. a. Accounting c. recording e. Governmental g. Language of business b. Identifying d. Communicating f. Artificial intelligence h. Recordkeeping (bookkeeping) 1. Helps accountants by perf
> Use the information below to prepare (a) departmental income statements and (b) the departmental contribution to overhead. Salaries are direct expenses, and all other expenses are indirect expenses.
> A retailer pays $130,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. The company allocates $84,500 of total rent expense to the first floor and $45,500 to the second floor. It then allo
> Sierra Company has two operating departments: Mixing and Bottling. Mixing occupies 22,000 square feet. Bottling occupies 18,000 square feet. Maintenance costs of $200,000 are allocated to operating departments based on square feet occupied. Determine the
> Soda Pop Company has two operating departments: Mixing and Bottling. Mixing has 300 employees and Bottling has 200 employees. Office costs of $160,000 are allocated to operating departments based on the number of employees. Determine the office costs all
> For each of the following expenses, select the best allocation basis.
> The plant manager of the Ohio factory is responsible for two cost centers: Clothing and Shoes. Responsibility accounting reports for the Ohio factory (incomplete) and for the Shoes department (complete) follow. Finish the report for the Ohio factory by d
> A partial responsibility accounting report for a cost center follows. Complete the report by determining the missing items a, b, and c.
> Jose Ruiz manages a construction firm’s equipment repair department. His department is a cost center. Costs for a recent period follow. Jose cannot control his salary, rent, or insurance. Compute total controllable costs that would appe
> (1) Use the information below to compute the days in the cash conversion cycle for each company. (2) Which company is more effective at managing cash based on this measure?
> A hotel reports the following for its two divisions. The company uses a balanced scorecard and sets a goal of 85% occupancy in its hotels. 1. Which division(s) exceeded the occupancy goal for the current year? 2. Which division(s) improved its occupancy
> Classify each of the performance measures below into the most likely of four balanced scorecard perspectives it relates to: Customer, Internal process, Innovation & learning, or Financial.
> A company’s division has sales of $2,000,000, income of $80,000, and average assets of $1,600,000. Compute the division’s profit margin, return on investment, and investment turnover.
> For each of the following, select its best description.
> AirPro Corp. reports the following for this period. Compute the (a) total overhead variance and (b) controllable variance and identify each variance as favorable or unfavorable.
> Derr Co. reports the following. Compute (a) controllable variance, (b) volume variance, and (c) total overhead variance.
> A company shows a $20,000 unfavorable direct labor rate variance and a $10,000 unfavorable direct labor efficiency variance. The company’s standard cost of direct labor is $400,000. What is the actual cost of direct labor?
> A company reports the following for its direct labor. Compute the direct labor rate and efficiency variances and identify each as favorable or unfavorable.
> For the current period, Juan Company’s standard cost of direct materials is $150,000. The direct materials variances consist of a $12,000 favorable price variance and a $2,000 favorable quantity variance. What is the actual cost of direct materials?
> A company reports the following for one of its products. Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.
> Explain how the budgeting process for service companies differs from that for manufacturers.
> A company reports the following for one of its products. Compute the total direct materials variance and identify it as favorable or unfavorable.
> The fixed budget for 20,000 units of production shows sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. The company’s actual sales were 26,000 units at $480,000. Actual variable costs were $112,000 and actual fixed costs were $14
> A company’s returns department incurs annual overhead costs of $72,000 and budgets 2,000 returns per year. Management believes it has found a better way to package its products. As a result, the company expects to reduce the number of shipments that are
> Management believes it has found a more efficient way to package its products and use less cardboard. This new approach will reduce shipping costs from $10.00 per shipment to $9.25 per shipment. (1) If the company budgets 1,200 shipments this year, what
> In a recent year a car manufacturer sold 182,158 cars. The company budgeted to sell 191,158 cars during the year. The budgeted sales price for each car was $30,000 and the actual sales price for each car was $30,200. Compute the sales price variance and
> Refer to the information in QS 23-19. Compute the variable overhead spending variance and the variable overhead efficiency variance and identify each as favorable or unfavorable.
> Refer to the information in QS 23-17. Alvarez records standard costs in its accounts. Prepare the journal entry to charge overhead costs to the Work in Process Inventory account and to record any variances.
> Alvarez Company for the current period shows a $20,000 favorable volume variance and a $60,400 unfavorable controllable variance. Standard overhead applied for the period is $225,000. (a) What is the actual total overhead for the period? (b) What is the
> Refer to the information in QS 23-15. Compute the volume variance and identify it as favorable or unfavorable.
> The fixed budget for 20,000 units of production shows sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. If the company actually produces and sells 26,000 units, calculate the flexible budget income.
> How can managers use the master budget in controlling operations?
> Data below are from recent annual reports for Samsung, Apple, and Google. Required 1. Compute revenue per employee for Samsung for the current year and the prior year. 2. Using revenue per employee, did Samsung’s workforce become more
> Music World reports the following budgeted sales: August, $150,000; and September, $170,000. Cash sales are 40% of total sales, and all credit sales are collected in the month following the sale. Prepare a schedule of cash receipts from sales for Septemb
> Hockey Pro budgets 320 hours of direct labor during May. The company applies variable overhead at the rate of $18 per direct labor hour. Budgeted fixed overhead equals $46,000 per month. Prepare a factory overhead budget for May.
> Miami Solar budgets production of 5,300 solar panels for August. Each unit requires 4 hours of direct labor at a rate of $16 per hour. The company applies variable overhead at the rate of $12 per direct labor hour. Budgeted fixed factory overhead is $180
> Atlantic Surf manufactures surfboards. The company’s budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods inventory equal (in units) to 40% of the next month’s uni
> Champ Inc. budgets the following sales in units for the coming two months. Each month’s ending inventory of finished units should be 60% of the next month’s sales. The April 30 finished goods inventory is 108 units. Pr
> Zahn Co. budgets sales of 220 units in May and 240 units in June. Each month’s ending inventory should be 25% of the next month’s sales. The April 30 ending finished goods inventory is 55 units. Prepare the production budget for May.
> Scora Inc. sells a single product for $50 per unit. Budgeted sales units for the next three months follow. Prepare a sales budget for the months of January, February, and March.
> For each of the following indicate yes if it describes a potential benefit of budgeting or no if it describes a potential negative outcome of budgeting. 1. Budgets help coordinate activities across departments. 2. A budget forces managers to spend time p
> Montel Company’s July sales budget shows sales of $600,000. The company budgets beginning merchandise inventory of $50,000 and ending merchandise inventory of $40,000 for July. Cost of goods sold is 60% of sales. Determine the budgeted cost of merchandis
> Raider-X Company budgets sales of 18,000 units for April and 20,000 units for May. Beginning inventory on April 1 is 3,600 units, and the company wants to have 20% of next month’s unit sales in inventory at the end of each month. The merchandise cost per
> Apple regularly uses budgets. What is the difference between a production budget and a manufacturing budget?
> Torres Co. budgets merchandise purchases of $15,800 in January, $18,600 in February, and $20,200 in March. For those purchases, 40% of purchases are paid in the month of purchase and 60% are paid in the month after the purchase. The company purchased $25
> Santos Co. is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and budgets $75,000 in cash receipts from sales and $100,250 in cash payments during February. Prepare the cash budget for February assuming the
> Kingston budgets total sales for June and July of $420,000 and $398,000, respectively. Cash sales are 60% of total sales. Of the credit sales, 20% are collected in the month of sale, 70% are collected during the first month after the sale, and the remain
> Wells Company reports the following budgeted sales: September, $55,000; October, $66,000; and November, $80,000. All sales are on credit, and 5% of those credit sales are budgeted as uncollectible. Collection of the remaining 95% of credit sales are budg
> The Guitar Shoppe reports the following budgeted sales: August, $150,000; and September, $170,000. For its total sales, 40% are immediately collected in cash, 55% are credit sales and collected in the month following sale, and the remaining 5% are writte
> For each of the following indicate yes if the item is an important budgeting guideline or no if it is not. 1. Employees should have the opportunity to explain differences from budgeted amounts. 2. Budgets should include budgetary slack. 3. Employees impa
> Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs are $116 per unit. Determine the break-even point in units.
> Viva sells its waterproof phone case for $90 per unit. Fixed costs total $162,000, and variable costs are $36 per unit. Determine the (1) contribution margin ratio and (2) break-even point in dollars.
> Viva sells its waterproof phone case for $90 per unit. Fixed costs total $162,000, and variable costs are $36 per unit. Determine the (1) contribution margin per unit and (2) break-even point in units.
> Solve for the missing amounts a through f for the following separate cases.
> Google prepares cash budgets. What is a cash budget? Why must operating budgets and the capital expenditures budget be prepared before the cash budget?
> Compute the contribution margin ratio and fixed costs using the following data.
> This scatter diagram shows past units produced and their corresponding maintenance costs. 1. Review the scatter diagram and classify maintenance costs as either fixed, variable, or mixed. 2. If 3,000 units are produced, are maintenance costs expected to
> Following are costs for eight different items. Costs are shown for three different levels of units produced and sold. Classify each of the eight cost items as either variable, fixed, or mixed.
> Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000 for the year, and fixed selling and administrative costs
> Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000 for the year, and fixed selling and administrative costs
> Determine whether each of the following is best described as a fixed, variable, or mixed cost with respect to product units.
