Chapter 07 … Master Budgets and Performance Planning 1. A budget is a formal statement of future plans‚ usually expressed in monetary terms. 2. Continuous budgeting is the practice of preparing a new budget for a selected number of future periods and revising those budgets as each period is completed. 3. Budget preparation is best determined in a top-down managerial approach. 4. The master budget consists of three major groups of budget components: the operating budgets
Premium Cash flow Internal rate of return Net present value
acquisition‚ it was a family business. Problem: Sharon Michaels‚ who happened to be appointed as division controller for the company was concerned about the financial report of May‚ 2004‚ given to her by the plant accountant. The report indicated huge variance discrepancies between the budgeted profit ($91‚200) and the actual outcome of the company’s performance‚ which was a loss of $7‚200 for the month of May‚ 2004. Questions: 1. Using the budget data‚ how many motors would have to be sold for Waltham
Premium Variable cost Costs Fixed cost
1. The Xavier Company‚ a merchandising firm‚ has planned the following sales for the next four months: | | |March |April |May |June | | |Total budgeted sales |$70‚000 |$50‚000 |$80‚000 |$60‚000 | Sales are made 40% for cash and 60% on account. From experience‚ the company has learned that a month’s sales on account are collected according to the following pattern:
Premium Direct material price variance Material Wage
budget show that Danshui has unfavorable variance in the assembly the flash memory part‚ variable tools and supplies‚ assembly and packing‚ shipping nad the last one on the supervision. As for the flash memory it has been stated that Samsung had raised the price by $2.00 which had been cover by the Apple as their neutralized the profit which supposedly to give a favorable variance. But for the budget it can seen that the flash memory is showing an unfavorable variance. This is due to lack of skills
Premium Variable cost Costs Fixed cost
Use the following information for questions 1--10. Top That manufactures baseball-style hats. Material is introduced at the beginning of the process in the Cutting Department. Conversion costs are incurred (and allocated) uniformly throughout the process. As the cutting of material is completed‚ the pieces are immediately transferred to the Sewing Department. Data for the Cutting Department for the month of February 2005 follow: Work in process‚ January 31-- 50‚000 units 100%
Premium FIFO and LIFO accounting Units of measurement Inventory
Importance of nonfinancial measures offer four advantages based on financial date. First‚ the long term organization strategies they do not deal with profitability‚ competitive‚ strength and longer term strategic goals. They only do their job of new product development and expand organizational capabilities which are important for strategic goals. Second‚ intangible assets which is intellectual capital and customer loyalty of company rather than balance sheet. Third non financial measures help us
Premium Finance Economics Term
production? What was the actual cost per unit of production and shipping. 3. Prepare a flexible budget for 180‚000 iPhone 4’s and calculate flexible budget variances using actual costs for August. 4. Estimate material price and usage for flash memories‚ labor rate and usage (efficiency) variances‚ and the overhead spending variance for August. 5. What are some strategies or decisions that Wentao Chen should consider in trying to solve the problems with the apple iPhone 4 contract in the
Premium Variable cost Costs Fixed cost
around favorable variances. Managers are awarded bonuses for favorable variances and the computer software only notifies departments when there is an unfavorable variance. The department managers are the ones that determine these rates and are also the ones along with employees that are rewarded bonuses if favorable variances occur. The incentive program is a good way to motivate employees and managers to be more efficient. Although‚ along with this advantage come some disadvantages. Favorable variances
Premium Price Inventory Cost
accounting tool that companies use to outline future cash expenditures. Managerial accounting not only focuses on overall company budgets‚ but also on specific variances relating to the production process. Accountants attempt to trace every budget variance to determine whether variances are favorable or unfavorable. Unfavorable variances are not necessarily bad if the company needs to produce more items to meet demand. Instructors often create exercises in which students complete individual budgets
Premium Process management Cost accounting Management
down the volume changes by quality variance‚ price variance‚ fuel efficiency variance‚ and fuel cost variance to most accurately explain the losses. Tan would also propose that he formula for fixed costs be revised to help close the large gap between standard and actual costs. Not only should his presentation prove that his team performed well and that he is worthy of a promotion‚ but it should help guide HT Power on future power plant investments. Variance Evaluation The Summary of Recent Operating
Premium Costs Variable cost Cost