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Exam 19: Introduction to Managerial Accounting and the Master Budget

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Question 91

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Which of the following BEST describes the value chain?

A) The minimising of inventory levels to reduce storage, insurance and finance costs
B) All activities that contribute to the continuous improvement of business operations
C) A management information system which tracks the costs of products through the manufacturing process
D) The whole sequence of activities that adds value to a company's products and services

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Question 92

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All of the following are examples of manufacturing overhead,EXCEPT for:

A) electricity and gas incurred in the factory.
B) indirect materials.
C) wages of assembly line workers.
D) insurance on factory equipment.

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Question 93

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Diemans Ltd has provided a part of its budget for the second quarter: $\begin{array} { | l | l | l | l | } \hline & { \text { Apr } } & { \text { May } } &{ \text { June } } \\\hline \text { Cash collections } & \$ 42,000 & \$ 45,000 & \$ 43,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of inventory } & 7200 & 5000 & 5000 \\\hline \text { Operating expenses } & 7000 & 6400 & 5200 \\\hline \text { Capital expenditures } & 4600 & 0 & 4600 \\\hline\end{array}$ The cash balance on 1 April is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the cash balance at the end of June.

Jasper Ltd reports the following cost information for March: $\begin{array} { | l | l | } \hline \text { Cost of goods manufactured } & \$ 74,000 \\\hline \text { Manufacturing overhead } & 19,000 \\\hline \text { Finished goods inventory, 1 March } & 6000 \\\hline \text { Finished goods inventory, 31 March } & 3000 \\\hline \text { Work in process inventory, 1 March } & 9620 \\\hline \text { Work in process inventory, 31 March } & 1180 \\\hline \text { Direct materials used } & 25,250 \\\hline\end{array}$ What is the amount of direct labour incurred by Jasper in March?

Which of the following is NOT an objective of management accounting?

The master budget includes three components-the operating budget,the capital expenditures budget and the financial budget.

Inventoriable product costs are expensed in the period in which they are incurred.

Budgets provide benchmarks that help managers evaluate performance.

Nobell Ltd has a cash balance of $22,000 on 1 April 2017.It is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: $\begin{array} { | l | l | l | l | } \hline & \text { Apr } & \text { May } & \text { June } \\\hline \text { Cash collections } & \$ 25,000 & \$ 22,000 & \$ 24,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of inventory } & \$ 300 & 4600 & 4000 \\\hline \text { Operating expenses } & \$ 000 & 6000 & 5300 \\\hline\end{array}$ There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of May.

Which of the following is an example of the planning function of a budget?