At January 1, 2012, Bella Company has beginning inventory of 2,000 DVD players. Bella estimates it will sell 10,000 units during the first quarter of 2012 with a 12% increase in sales each quarter. Bella s policy is to maintain an ending inventory equal to 25% of the next quarter s sales. Each DVD player costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2012?
2,If a company plans to sell 48,000 units of product but sells 60,000, the most appropriate comparison of the cost data associated with the sales will be by a budget based on
3
Management by exception
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means that only unfavorable differences will be investigated. |
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means that all differences will be investigated. |
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causes managers to be buried under voluminous paperwork. |
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means that material differences will be investigated. |
4An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000. The center’s average operating assets were $800,000. How much is the return on investment?
5
Alma Manufacturing recorded operating data for its auto accessories division for the year.
| Sales | $750,000 | |
| Contribution margin | 150,000 | |
| Total direct fixed costs | 90,000 | |
| Average total operating assets | 400,000 |
How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?
6,
To develop the flexible budget, management takes all of the following steps except identify the
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activity index and the relevant range of activity. |
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variable costs and determine the budgeted variable cost per unit. |
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fixed costs and determine the budgeted fixed cost per unit. |
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All of these options are steps in developing the flexible budget. |
7,
A flexible budget is appropriate for
| Direct Labor Costs | Manufacturing Overhead Costs |
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| Question 7 |
At January 1, 2012, Bella Company has beginning inventory of 2,000 DVD players. Bella estimates it will sell 10,000 units during the first quarter of 2012 with a 12% increase in sales each quarter. Bella s policy is to maintain an ending inventory equal to 25% of the next quarter s sales. Each DVD player costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2012?
| $1,881,600 |
| $1,950,000 |
| $450,000 |
| $12,544 |