Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 7CE
Refer to Cornerstone Exercise 8.6.
Required:
- 1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead.
- 2. Prepare a cost of goods sold budget for Play-Disc for the year.
- 3. What if the beginning inventory of finished goods was $75,200 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.)
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following
For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of $4.75. (There are no beginning or ending inventories of work in process.)
Required:
- 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year.
- 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
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Students have asked these similar questions
1) The sales budget is based on assumptions about the ___________.
a) Number of units to be sold and selling price per unit.
b) Timing of cash receipts.
c) Contribution margin per unit and the number of units to be sold.
d) Costs of the units produced and the total fixed costs.
2) When constructing the production budget, the desired ending inventory for the period is determined based on:
a) Next period sales
b) Next period production
c) Last period production and sales
d) Credit period
3)Standard time allowed to complete one unit is 2 hours. A worker during a week (48 hours) completed 20 units and drawn a salary of Rs. 6000. The standard rate per day of 8 hours shift is Rs. 1000. Which one of the following is true?
a)Labour efficiency variance is Zero
b)Labour rate variance is zero
c)Labour cost variance is zero
d)None of the above
The controller of the
Stump
Company is preparing the budget for
2021
and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior 2 months are:
LOADING...
(Click
the icon to view the information.)
Requirements
1. Estimate the cost function for delivery.
2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain.
Requirement 1. Estimate the cost function for delivery.
Delivery costs =
+ (
×
)
Delivery costs =
+ (
×
)
Requirement 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain.
The cost function in requirement 1 is an estimate of how costs behave
▼
outside of
within
the relevant range, not at cost levels
▼
outside
within
the relevant range. If there are no months with zero miles driven represented in the delivery cost…
2. Prepare a cost of goods sold budget for Play-Disc for the year.
3. What if the beginning inventory of finished goods was $80,900 (for 17,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.)
Chapter 8 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 8 - Define budget. How are budgets used in planning?Ch. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is the master budget? An operating budget? A...Ch. 8 - Explain the role of a sales forecast in budgeting....Ch. 8 - All budgets depend on the sales budget. Is this...Ch. 8 - What is an accounts receivable aging schedule? Why...Ch. 8 - Suppose that the vice president of sales is a...Ch. 8 - Suppose that the controller of your companys...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Discuss the shortcomings of the traditional master...Ch. 8 - Define static budget. Give an example that shows...Ch. 8 - What are the two meanings of a flexible budget?...Ch. 8 - What are the steps involved in building an...Ch. 8 - FlashKick Company manufactures and sells soccer...Ch. 8 - Refer to Cornerstone Exercise 8.1, through...Ch. 8 - Refer to Cornerstone Exercise 8.2 for the...Ch. 8 - Prob. 4CECh. 8 - Johnston Company cleans and applies powder coat...Ch. 8 - Play-Disc makes Frisbee-type plastic discs. Each...Ch. 8 - Refer to Cornerstone Exercise 8.6. Required: 1....Ch. 8 - Timothy Donaghy has developed a unique formula for...Ch. 8 - Green Earth Landscaping Company provides monthly...Ch. 8 - Coral Seas Jewelry Company makes and sells costume...Ch. 8 - Shalimar Company manufactures and sells industrial...Ch. 8 - Khloe Company imports gift items from overseas and...Ch. 8 - Nashler Company has the following budgeted...Ch. 8 - Refer to Cornerstone Exercise 8.13. In March,...Ch. 8 - Palmgren Company produces consumer products. The...Ch. 8 - Prob. 16ECh. 8 - Crescent Company produces stuffed toy animals; one...Ch. 8 - Audio-2-Go, Inc., manufactures MP3 players. Models...Ch. 8 - Tiger Drug Store carries a variety of health and...Ch. 8 - Rosita Flores owns Rositas Mexican Restaurant in...Ch. 8 - Prob. 21ECh. 8 - Janet Wooster owns a retail store that sells new...Ch. 8 - Historically, Ragman Company has had no...Ch. 8 - Del Spencer is the owner and founder of Del...Ch. 8 - Refer to Exercise 8.24. Del Spencers purchases...Ch. 8 - Ingles Corporation is a manufacturer of tables...Ch. 8 - In an attempt to improve budgeting, the controller...Ch. 8 - Refer to Exercise 8.27. At the end of the year,...Ch. 8 - Olympus, Inc., manufactures three models of...Ch. 8 - Refer to Exercise 8.29. Suppose Gene determines...Ch. 8 - Trumbull Co. plans to produce 100,000 toy cars...Ch. 8 - Which of the following describes the order in...Ch. 8 - A companys controller is adjusting next years...Ch. 8 - A companys sales for the coming months are as...Ch. 8 - The budget that adjusts unit sales for beginning...Ch. 8 - Ponderosa, Inc., produces wiring harness...Ch. 8 - Bernard Creighton is the controller for Creighton...Ch. 8 - Greiner Company makes and sells high-quality glare...Ch. 8 - Prob. 39PCh. 8 - The controller for Muir Companys Salem plant is...Ch. 8 - Refer to Problem 8.40 for data. Required: 1. Run a...Ch. 8 - Norton Company, a manufacturer of infant furniture...
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