Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 11, Problem 20RQ
Give one example of a plausible activity base to use in flexible budgeting for each of the following organizations: an insurance company, an express delivery service, a restaurant, and a state tax-collection agency.
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Give one example of a plausible activity base to use in flexible budgeting for each of the following organizations: an insurance company, an express delivery service, a restaurant, and a state tax-collection agency.
Which of the following is true in a bottom-up budgeting approach?
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a.Supervisors tell departments their budget amount and the departments are free to work within those amounts.
b.Departments determine their needs and relate them to the overall goals.
c.Every expense needs to be justified.
d.Departments budget their needs however they see fit.
Define the role of the budget in the public sector. Describe Performance Based Budgeting and give an example.
Chapter 11 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 11 - Distinguish between static and flexible budgets.Ch. 11 - Explain the advantage of using a flexible budget.Ch. 11 - Why are flexible overhead budgets based on...Ch. 11 - Distinguish between a columnar and a formula...Ch. 11 - Show, using T-accounts, how production overhead is...Ch. 11 - How have advances in manufacturing technology...Ch. 11 - What is the interpretation of the...Ch. 11 - Jeffries Companys only variable-overhead cost is...Ch. 11 - What is the interpretation of the...Ch. 11 - Distinguish between the interpretations of the...
Ch. 11 - What is the fixed-overhead budget variance?Ch. 11 - What is the correct interpretation of the...Ch. 11 - Describe a common but misleading interpretation of...Ch. 11 - Draw a graph showing budgeted and applied fixed...Ch. 11 - What types of organizations use flexible budgets?Ch. 11 - What is the conceptual problem of applying fixed...Ch. 11 - Distinguish between the control purpose and the...Ch. 11 - Why are fixed-overhead costs sometimes called...Ch. 11 - Draw a graph showing both budgeted and applied...Ch. 11 - Give one example of a plausible activity base to...Ch. 11 - Explain how an activity-based flexible budget...Ch. 11 - Crystal Glassware Company has the following...Ch. 11 - Refer to the data in the preceding exercise. Use...Ch. 11 - Crystal Glassware Company has the following...Ch. 11 - The following data are the actual results for...Ch. 11 - Evening Star, Inc. produces binoculars of two...Ch. 11 - The controller for Rainbow Childrens Hospital,...Ch. 11 - You recently received the following note from the...Ch. 11 - You brought your work home one evening, and your...Ch. 11 - Refer to DCdesserts.coms activity-based flexible...Ch. 11 - Montoursville Control Company, which manufactures...Ch. 11 - Prob. 33ECh. 11 - The following data pertain to Aurora Electronics...Ch. 11 - Calgary Paper Company produces paper for...Ch. 11 - Gibralter Insurance Company uses a flexible...Ch. 11 - Country time Studios is a recording studio in...Ch. 11 - Newark Plastics Corporation developed its overhead...Ch. 11 - Johnson Electrical produces industrial ventilation...Ch. 11 - Fall City Hospital has an outpatient clinic....Ch. 11 - Maxwell Company uses a standard cost accounting...Ch. 11 - Mark Fletcher, president of SoftGro, Inc., was...Ch. 11 - LawnMate Company manufactures power mowers that...Ch. 11 - For each of the following independent Cases A and...Ch. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - WoodCrafts, Inc. is a manufacturer of furniture...Ch. 11 - Rutherford Wheel and Axle, Inc. has an automated...Ch. 11 - Chillco Corporation produces containers of frozen...Ch. 11 - Montreal Scholastic Supply Company uses a...Ch. 11 - College Memories, Inc. publishes college...Ch. 11 - While Mountain Sled Company manufactures childrens...Ch. 11 - Cleveland Computer Accessory Company (CCAC)...Ch. 11 - Prob. 54CCh. 11 - Prob. 55C
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- Explain how a budgeted income statement for a service business may be used for both planning and control purposes.arrow_forwardSelect each of the terms with the best description of its purpose. 1. Helps determine financing needs. Definitions 2. The usual starting point in the master budget process. 3. A report that shows predicted revenues and expenses for a budgeting period. 4. A budgetary cushion used to meet performance targets. 5. A comprehensive plan that consists of several budgets that are linked. 6. Employees affected by a budget help in preparing it. Termsarrow_forwardExplain what you understand by Budgets, Fixed budgets and Flexible budgets in the context of control and performance evaluation of an ORGANIZATION OF YOUR CHOICE. Answer includes illustrations and detailed explanations using any organization.arrow_forward
- I have a hypothetical budget for a hypothetical public department that gains revenue from sources such as house mover permits fees, building permits fees, electrical permits fees, zoning fees, inspection fees, registration fees, etc. I am supposed to identify the key budget linkages for this department.arrow_forwardWhat are some characteristics of performance-based budgeting? What are some advantages and disadvantages of performance-based budgeting? How does the organization you selected incorporate performance-based budgeting? If the organization you selected does not incorporate performance-based budgeting, how does the organization reflect or incorporate program outcomes to the budget? When responding to classmates, compare the organization you chose to theirs. Is one organization more successful at describing their strategic plan and aligning their budget to reflect outcomes? Why or why not?arrow_forward5. When developing a budget, an EXTERNAL factor to consider in the planning process is - Group of answer choices - the activities of competitors - development of new product - implementation of employee's retirement planarrow_forward
- Discuss why budgets are so important for all organizations. Describe some advantages and disadvantages to budgeting.arrow_forwardEach of the following statements includes a pair of words within parenthesis. Indicate which of the words should be chosen to make the statement true. The first statement is done as an example. A ( loan application / budget ) is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources. Budgets ( should / should not ) be used to provide managers with "preapproval" for execution of spending plans. The (master budget / sales budget ) is a comprehensive document specifying sales targets, production activities, and financing actions. "Responsibility accounting" is a concept under which managers are held accountable for transactions and events ( beyond / under ) their direct influence and control. Some entities will follow a top-down( mandated / participative ) approach to budgeting. A deliberate effort to create "breathing room" within a budget is known as ("padding the budget" / "aerating" ). With ( incremental budgeting /…arrow_forwardDescribethe best practices you would implement when budgeting for an organization.arrow_forward
- Which of the following accounts would appear on a budgeted balance sheet? Multiple Cholce All of the choices are correct. Income tax expense. Accounts receivable. Sales commissions. Depreciation expense.arrow_forwardGive an example of how the capital expenditures budget affects other operating budgets.arrow_forwardWhich of the following is true in a bottom-up budgeting approach? Every expense needs to be justified. Supervisors tell departments their budget amount and the departments are free to work within those amounts. Departments budget their needs however they see fit. Departments determine their needs and relate them to the overall goals.arrow_forward
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