11) The budget costs at companies are different for variable and fixed overhead costs.
12) Using activity-based cost drivers provide additional and detailed information that improves decision making compared with budgeting solely on output-based cost drivers.
13) Budgeting is a cross-functional activity.
14) How do sales managers and sales representatives build the revenue budget?
15) What is a bill of materials? Why do managers use it?
16) How do managers treat fixed overhead costs in the budget process?
17) Mountain Express, a clothing boutique chain has an operating income of $240,000. The sales revenue of the company was calculated to be $960,000.
Required
Compute the operating profit margin.
A) 32%
B) 25%
C) 17%
D) 46%
E) 12%
18) The managerial accountant at the Chesapeake Bay Circuit Manufacturing Company expects to sell 120,000 circuits in 2013 for $12 each. There are 5,000 circuits in beginning finished goods inventory with target ending inventory of $5,000 circuits. The company keeps no work-in-process inventory.
Required
Compute the amount of sales revenue reported on the 2013 budgeted income statement.
A) $1,000,000
B) $1,200,200
C) $1,440,000
D) $1,300,400
E) $1,600,200
19) The Sherry Point Light Foundation has budgeted sales of 45,000 units, target ending finished goods inventory of 8,000 units, and beginning finished goods inventory of 3,000 units.
Required
Compute the number of units that the manager expects to produce next year.
A) 25,000 units
B) 30,000 units
C) 35,000 units
D) 45,000 units
E) 50,000 units
20) The sales manager for the Tool Box, a fine and large tool and machinery outlet, wants to increase the company's operating profit margin from 20% to 30%. The operating income of the company is $180,000.
Required
Compute the amount of sales revenue needed to achieve the goal?
A) $600,000
B) $485,000
C) $525,000
D) $613,000
E) $500,000