Principles of Accounting II- Please help me to answer these questions and explanation so I can re-read through the chapters and understand better.

Question 1

Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the following is not considered a human behavior problem?

	setting goals among managers that conflict with one another
	setting goals too tightly making it difficult to meet performance expectation
	allowing employees the opportunity to be a part of the budget process
	allowing goals to be so low that employees develop a “spend it or lose it” attitude

Explanation:

Question 2

A company’s history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000, and $95,000, respectively. The February expected cash receipts from all current and prior credit sales are

	$61,200
	$57,000
	$66,400
	$90,250

Explanation:

Question 3

The budgeted volume of production is normally computed as the sum of (1) the expected sales volume and (2) the desired ending inventory.

	True
	False

Explanation:

Question 4

The following data relate to direct materials costs for February:

Materials cost per yard: standard, $2.00; actual, $2.10

Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards

Units of production: 9,500

Calculate the total direct materials cost variance.

	$9,262.50 unfavorable
	$9,262.50 favorable
	$3,780.00 unfavorable
	$3,562.50 favorable

Explanation:

Question 5

If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is

	10,600
	8,200
	66,000
	6,800

Explanation:

Question 6

If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is

	6,700
	7,400
	7,100
	7,000

Explanation:

Question 7

Standards are more widely used for nonmanufacturing activities than for manufacturing activities.

	True
	False

Explanation:

Question 8

The budgeted balance sheet assumes that all operating and financing plans are met.

	True
	False

Explanation:

Question 9

The sales budget is derived from the production budget.

	True
	False

Explanation:

Question 10

Southern Company is preparing a cash budget for April. The company has $12,000 cash at the beginning of April and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during April. Southern Company has an agreement with its bank to maintain a minimum cash balance of $10,000. To maintain the required balance during April, the company must

	borrow $4,500
	borrow $2,500
	borrow $7,500
	borrow $5,000

Explanation:

Question 11

Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. What is the budgeted production (in units) for the year?

	78,500
	70,000
	77,500
	70,500

Explanation:

Question 12

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting?

	$288,000
	$305,000
	$350,000
	$378,000

Explanation:

Question 13

Tara Company’s budget shows the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash will Tara Company expect to collect in November as a result of current and past credit sales?

	$19,700
	$28,400
	$30,000
	$31,100

Explanation:

Question 14

The following data relate to direct labor costs for March:

Rate: standard, $12.00; actual, $12.25

Hours: standard, 18,500; actual, 17,955

Units of production: 9,450

Calculate the direct labor rate variance.

	$4,488.75 unfavorable
	$6,851.25 favorable
	$4,488.75 favorable
	$6,851.25 unfavorable

Explanation:

Question 15

Which of the following is not a reason standard costs are separated into two components?

	The price and quantity variances need to be identified separately to correct the actual major differences
	Identifying variances determines which manager must find a solution to major discrepancies
	If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections
	Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual results

Explanation:

Question 16

Budgets are normally used only by profit-making businesses.

	True
	False

Explanation:

Question 17

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

	True
	False

Explanation:

Question 18

Planning for capital expenditures is necessary for all of the following reasons except

	machinery and other fixed assets wear out
	expansion may be necessary to meet increased demand
	amounts spent for office equipment may be immaterial
	fixed assets may fall below minimum standards of efficiency

Explanation:

Question 19

Standard costs should always be revised when they differ from actual costs.

	True
	False

Explanation:

Question 20

Match the phrase that follows with the term (a-e) it describes.

	shows expected results at several activity levels
	shows expected results at only one activity level
	begins by estimating the quantity of sales
	estimates the number of units to be manufactured to meet sales and inventory levels
	integrated set of operating and financing budgets for a period of time

1.	static budget
2.	flexible budget
3.	master budget
4.	sales budget
5.	production budget

Explanation:

Question 21

Standard costs serve as a device for measuring efficiency.

	True
	False

Explanation:

Question 22

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.

	True
	False

Explanation:

Question 23

The total manufacturing cost variance consists of

	direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
	direct materials cost variance, direct labor rate variance, and factory overhead cost variance
	direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance
	direct materials cost variance, direct labor cost variance, and factory overhead cost variance

Explanation:

Question 24

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:

Standard Costs
Direct labor	7,500 hours @ $11.80

Actual Costs
Direct labor	7,400 hours @ $11.40

The direct labor rate variance is

	$2,960 unfavorable
	$4,500 favorable
	$2,960 favorable
	$4,500 unfavorable

Explanation:

Question 25

Variances from standard costs are reported to

	suppliers
	stockholders
	management
	creditors

Explanation:

Question 26

Match the following formulas or descriptions with the term (a-e) it defines.

	(Actual rate per hour – Standard rate per hour) × Actual hours
	(Actual price – Standard price) × Actual quantity
	Standard variable overhead for actual units produced
	(Actual quantity – Standard quantity) × Standard price
	(Actual direct hours – Standard direct hours) × Standard rate per hour

1.	Direct materials price variance
2.	Direct labor rate variance
3.	Direct labor time variance
4.	Direct materials quantity variance
5.	Budgeted variable factory overhead

Explanation:

Question 7

The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis.

	True
	False

Explanation:

Question 28

Motel Corporation is analyzing a capital expenditure that will involve a cash outlay of $208,240. Estimated cash flows are expected to be $40,000 annually for 7 years. The present value factors for an annuity of $1 for 7 years at interest of 6%, 8%, 10%, and 12% are 5.582, 5.206, 4.868, and 4.564, respectively. The internal rate of return for this investment is

	10%
	6%
	12%
	8%

Explanation:

Question 29

All of the following qualitative considerations may impact upon capital investment analysis except

	manufacturing productivity
	manufacturing sunk cost
	manufacturing flexibility
	market opportunities

Explanation:

Question 30

The methods of evaluating capital investment proposals can be grouped into two general categories that can be referred to as (1) average rate of return and (2) cash payback methods.

	True
	False