Week 8: Capital Budgeting Decisions and the Time Value of Money Let’s start with defining capital budgeting. What is capital budgeting? What are the differences between screening decisions and preference decisions? Additional Questions for Week #8: Capital Budgeting What is capital budgeting? What are the differences between screening decisions and preference decisions? What type of … Read more
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 936,000 $ 1,972,000 Average operating assets $ 520,000 $ 580,000 Net operating income $ 98,280 $ 147,900 Property, plant, and equipment (net) $ 249,000 $ 199,000 Required: Compute the rate … Read more
A manager of a profit center is most likely to be evaluated using a: Return on investment (ROI) could be calculated using which of the following formulas? Margin is calculated using which of the following formulas? Assume a company reported the following results: Sales $ 400,000 Variable expenses 260,000 Contribution margin 140,000 … Read more
Week 7: Responsibility Centers Compare and contrast the three types of responsibility centers. What is the best way to evaluate a manager’s performance in each type of center? What is the problem with using only financial measures of performance? Additional Questions for Week #7: Responsibility Accounting Why is there an inherent conflict between the … Read more
Which of the following statements is true? A revenue variance is calculated by comparing the: Which of the following statements is true? Assume that the amount of one of a company’s fixed expenses in its flexible budget is $46,000. The actual amount of the expense is $49,000 and the amount in the … Read more
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 300 Revenue ($460.00q) $ 138,000 Expenses: Wages and salaries … Read more
Week 6: Standards, Costs, and Variances Let’s start the week with a discussion on standards costs. What role do standard costs play in controlling the operations of a business? How are standard costs developed for direct materials, direct labor, and manufacturing overhead? Are there ever costs that we can’t develop standards for related to manufacturing … Read more
Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below: April May June Total Budgeted sales (all on account) $ 350,000 $ 550,000 $ 190,000 $ 1,090,000 The company estimates 25% of a month’s sales are collected in the month of … Read more
Which of the following statements is true? Which of the following estimates is notused in preparing a sales budget including a schedule of expected cash collections? Which of the following equations is used in a merchandise purchases budget? Assume a company is preparing a budget for its first two months of operations. During … Read more
Week 5: The Master Budget How does the master budget for a service company differ from a master budget for a manufacturing company? Which (if any) operating budgets differ and how, specifically, do they differ? Which (if any) financial budgets differ and how, specifically, do they differ? Additional Questions: What are the components of … Read more