MANAGEMENTADVI

SORYSERVI
CES HI
LARI
OTAN

THEORY 4. Pr
ovi
desas en
seo fdi
rec
ti
onfort
hecomp a
nya ndenh
ancescoor
di
nati
onofbu
sin
ess
Budg
eti
ngcon
cept
s ac
ti
vi
ty
.
1. Whi
chofth
efol
l
owingobj
ect
i
vesisnotapri
marypur
poseofpr
epa
ri
ngab u
dget
? 5. El
i
minat
esortake
so ve
rtherol
eofad
minist
rat
i
onb ypr
ovi
di
ngdeta
il
edinf
or
mati
ontha
t
A.T omakesu
rethecompa
nyex p
andsit
sopera
ti
ons. al
l
owsexecu
ti
vestooper
at
etowar
dach
iev
e mentoft
heor
gani
zat
i
on’
so b
jec
ti
ves
.
B.T oco
ntr
oli
ncomeandexpe
nd i
t
urei
nag i
venperi
od. A.Stat
ements1,2
,3, a
nd4o n
ly
. C.St at
ement
s3,4,a
nd5o nl
y.
C.T opr
ovi
deabasisf
orc
omparis
ono f
act
ualper
for
ma n
ce B.Stat
ements1,3
,and4o nl
y. D.Al lfivest
at
ements
.
D.T oco
mmu ni
cat
etheco
mp a
ny ’
spl
ansthr
oughou
ttheent
i
rebusi
nes
sorga
niz
ati
on
6
.T h
esest
at
ementsarepro
p e
rtoth
eb u
dgeti
ngproc
essexce
pt:
2
.F o
rb e
tt
ermanag
ementacc
ept
anc
e,t
hefl
owofd
atatobeu s
edforbud
get
i
ngs
hou
ldb
egi
n A.Iti
satool
toorche
str
ateth
evari
ousfun
cti
onsofope
rat
ion
sinabu s
ine
ss.
wi
th B.Iti
sapartof
ma nagement
’sr
espons
ibi
l
it
ytopla
ntheuseofi
tsr
esourc
es.
A.Ac c
ount
i
ngdepar
tme
nt C.Lowerl
eve
lsofmanag
ement C.Actu
alres
ult
sn eednotbecomp a
redwit
hp l
an,si
ncethepro
cessendsaf
te
rbudgeti
s
B.Bu dg
etco
mmitt
ee D.Topmanagement a
ppr
oved.
D.Theinv
olv
emen to
fthevar
iou
slevel
sofi
ndi
vidu
alsi
nthecompanyi
sn e
ces
sar
ytog
ainit
s
3
.Ineffec
ti
vebudge
tsand/orc
ont
rol
syst
emsar
echar
act
er
iz
edbyt
heus
eof
a
ccept
anc
ea ndatt
ai
nitsgoa
ls.
A.budg
etsf
ormoti
vat
ion.
B.budg
etsf
orcoor
din
ati
on.
7
.Inbu
dget
in
g,whi
cho f
thefol
lo
wingst
ate
me nt
sisf
alse?
C.th
ebudget
forcommu n
ica
ti
on.
A.Pl
anni
ngandcont
rolar
etheessent
i
alfea
tur
esofthebudg
eti
ngpro
cess
D.budg
etsa
sap l
anningto
olonl
yanddi
sr
ega
rdi
ngt
hemforc
ont
ro
lpu
rpo
ses
.
B.Capi
t
alexpe
ndit
ur
e sbudge
tshowstheava
il
abi
li
tyofi
dl
ecashfo
rinve
stment
4
. Bu
dget
sla
c ki
sacondi
ti
oninwhich C.Budg
eti
ngprov
idesame as
uri
ngdevi
cetowhichsubse
quentp
erf
ormancesar
ecompar
ed
A.demandisl
owa tv
ari
ousti
me softh
eyear
. andev
alu
ated.
B.managersgr
antf
avor
ede mpl
o y
eesext
rat
imeoff . D.Budg
etpr
eparat
i
oni sn
ottheso
lerespo
nsi
bil
i
tyofanyonedepa
rt
me ntan
dispre
par
edby
C.exce
ssma c
hinecapa
cit
ye x
is
tsinsomear
e a
so f
thepl
ant
. combi
ni
ngtheeff ort
sofmanyin
divi
dual
s
D.th
ereisani
ntent
i
onalove
rest
imateofe
xpense
so ra
nunder
est
i
mat
eof
rev
enu
es.
Bud
g e
tmetho
dolo
gies
5
. Whi
chofth
esest
atement
sareadvan
tagesofpr
ofi t
pla
nnin
g? 8. Abudgett
hati
ncl
udesa12-
mont
hpl
ann
ingp
eri
oda
tal
lti
mesi
scal
leda____
___
___b
udg
et.
1. Dev
elop
sp r
ofi t
-mind
edness
,e n
co u
rage
sc os
tconsci
ousnes
sa ndres
our
cesuti
l
iz
ati
on A.c on
ti
nuous C.mast
er
t
hro
ughout
thecompany. B.fl ex
ibl
e D.p r
ofor
ma
2. Pr
ovi
desvehic
letoc ommuni
cat
eo b
jec
ti
ves
,g ai
ns u
pportfort
hep la
n,ofwhatis
ex
pect
ed,t
her
ebyd e
vel
opi
ngas en
seo fc
ommit
me n
ttoach
ieveest
abl
is
hedgo
als
. 9. Budg
eti
ngexpendi
t
uresbyp
urp
osei
scal
l
ed
3. Pr
ovi
desyards
ti
cktoe val
uat
ea c
tualper
for
mance;enco
uragi
nge ffic i
ency
,incr
easi
ng A.F l
exi
bl
eb ud
geti
ng. C.Pro
grambud
geti
ng.
ou
tputa
ndreduci
ngcost
. B.L i
nebudget
in
g. D.Zer
o-b
asedbud
geti
ng.
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06MAST
ERBUDGET Pa
ge1o
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MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

anymo neywh e
therorn otther
ewa ss pe
ndinginthep rev
iousperi
od. Diff er
entwayso f
1
0.Abudgett
h atident
i
fi esre venuesandc os
tswithanindi
vi
du a
lco ntr
oll
i
ngthei
rinc
urr
e n
ceis perf
or
mingthes amea ct
i
v i
t
ya ndd i
ff er
entleve
lsofeff or
tfortheact
ivi
tyiseval
uat
ed.T hi
s
A.Ma sterb u
d get C.Re spons
ibi
li
tyb udget syst
emiscall
ed
B.Pr oductbudget D.No neoftheab ove A.Bu dgeti
ngbya l
ter
nat
ives. C.Sc enar
iobudgeti
ng.
1
1.Theprocedu r
ef o
rs et
ti
ngp r
ofi tobject
ive
si nwh ic
hma n a
ge me ntspeci
fi esag iv
e nrat
eof B.Bu dgeti
ngbyresponsi
bil
i
tyanda ut
hor
it
y.D.Z ero-
basedbudgeti
ng.
re
tur
nthatitseekstorea
li
zei nth
el o
ngru nbyme anso f
planni
ngto wardth
a t
endist
h e:
A.ap osteri
orimethod D.p r
agmati
cme tho d 16
.Inz er
o-
basedb u
d get
i
ng,wh i
chofthefol
l
owin
gs t
ate
me nt
sa r
eT r
ue?
B.ap ri
orime thod E.t heoret
i
calme thod 1. Alla
cti
vit
i
esinthecomp anyareorg
aniz
edint
ob r
eak-u
pu ni
tscal
ledpackages.
C.a dhocme tho
d 2. Allc
ostshavetobejust
ifi edever
yb u
dgeti
ngp e
ri
od.
3.T hep r
ocessisnotti
mec o n
sumingsin
cejusti
fi cat
i
o nofcost
sc anbed oneasar o
uti
ne
1
2.Act
iv
it
y-ba
s edb udget
in
ginc l
udesa l
lt
hefoll
owings t
epsEXCEPT ma t
t
er.
A.c ompu t
ingthecostofpe r
for
mingactivi
t
ies. A.St at
eme nt
1o nl
y. C.St at
eme nt
2a nd3o n
ly.
B.d et
ermin i
ngas epar
atec ost
-d
riv
errateforeachdepart
me nt
. B.St at
eme nt
s1a nd2on l
y. D.Al lt
hr
ees t
atement
s.
C.d et
ermin i
ngdema ndsforacti
vi
ti
esfroms al
esa ndpro
ducti
onta rg
e t
s.
D.d escr
ibingthebudgeta scost
so f
activi
t
iesrat
h e
rthancost
so ffuncti
ons. 17
.Co nsi
deri
ngb udget
ingconceptsa ndpri
nci
ples
,wh ic
ho fthef ol
l
owings t
ate
me nt
sisn ot
appl
ic
abl
e?
1
3.Just
-
in-
ti
mema nufact
ure
rsa remoreli
kelythancon v
enti
onalmanufactur
ersto A.T hefl exi
bl
eb udgeti
so ft
enu s
eda sab asi
sforprepar
ingthepre-
deter
minedover
head
A.Ex per
ien cecashshort
a ges. rat
e.
B.Pr epareproducti
onbud get
swithou
t asalesfor
ecast
. B.Afl exi
bl
eb udgeti
sg eare
dt o
wardarangeo fact
i
vit
yrathert
hantowardas i
ngl
elevel
of
C.Bu dget mater
ial
spurcha s
eseq ua
ltothec ur
rentmonth
’sneed sforpro
d u
cti
on. act
ivi
t
y.
D.Bu dget uni
tproduct
i
onf ort
hemo ntha t
greatert
hanb u
dg e
tedu nitsa
lesfor
themo nt
h. C.Al t
houghiti
se ff ect
iveinme asu
ri
ngp r
oduct
ioncontr
ol
,as ta
ti
cb udg
etisnoteff ect
i
vein
me a
suri
ngco s
tcontr
ol.
1
4.Asyst
ematizeda p
proachkn ownasz er
o-basedbu dget
i
ng(ZBB) D.T heo nl
ydiff er
enceb et
weenafl exi
bl
eb udgetandas t
ati
cbudgeti
sthatafl exi
bl
eb udg
et
A.Co mme nceswit
hthec urr
entl
e v
elofspen di
ng. doesnotcontai
nfi xedco s
ts.
B.Pr ese
n tsplann
e dact
ivi
tie
sforap er
iodof t
i
meb ut
doesn o
tp r
e sentafi rmcommitment.
C.Di v
idest heact
ivi
ti
eso find
ivi
dualr
es ponsi
bi
li
tycenter
sint
oas eri
eso fpac
kagesthatar
e Annua
lprofit pl
an&s uppor
ti
ngsc h
ed u
les
pri
or
it
ized. 18
.F oracompa n
ythatdoesnothaveresour
celi
mita
ti
onsinwha t
sequencewouldthebudge
tsbe
D.Cl as
sifi e sthebudge tbythep r
ioryear’
sa ct
ivi
t
ya ndesti
ma t
estheb en
efi tsari
sin
gfrom pr
epared
?
eachac t
ivi
ty. 1.c ashb udget 4.p rodu
cti
onb udge
ts
2.s alesbudget 5.p urc
haseb udget
s
1
5.Thi
sbudgetingsyst
e mplacestheb ur
deno fproofonthema nagertojust
if
ya ut
hor
it
ytosp e
nd 3.i nvent
orybudget
s
MSQ-
06MAST
ERBUDGET Pa
ge2o
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MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

A.s
equ
enc
e2,
3,4
,1a
nd5 C.s
equ
enc
e2,
4,3
,5a
nd1 B.Ad
ecre
asei
nX’sb
udget
edpur
cha
ses
.
B.s
equ
enc
e2,
3,4
,5and1 D.s
equ
enc
e4,
3,2
,1a
nd5 C.Ad
ecre
asei
nX’sc
ost
-
of-
sal
esper
cen
tag
e.
D.Al
ong
ercol
l
ect
i
onper
i
odforX’
scr
edi
tsa
les
.
1
9.Abudg
etthati
se x
pre
ssedi
nu n
it
sofmat
er
ial
s,n
umberofempl
oye
es,o
rnu
mbe
rofma
n-
ho
urso
rservi
ceuni
tsr
ath
ert
hani
npeso
sisk
nownas 2
4.Acompanyh asprepar
edac ashbudgetforJanu
arythr
oughJ u
neo f20x3
.Wh i
cho ft
he
A.Physi
calbud
get C.Pr o
gre
ssi
vebud
get f
ol
lo
wing,
discover
edinFebrua
ry20x3,
isLEASTlik
elyt
orequi
rere
vis
ingtheca
shbudg
et?
B.Plann
ingbudge
t D.T r
adi
ti
ona
lbud
get A.F e
bruarysal
esarelo
we rt
hanbudget
ed.
B.T h
ec ompanychangedinv
ento
ryme t
hodsfr
omL I
FOtoFIFO.
2
0.Whi
choft
hefol
l
owin
gisLEASTl
ik
el
ytob
eaffec
tedi
funi
tsa
lesf
ort
hi
smontha
rel
owe
rth
an C.T h
eintere
strat
eonshort-
t
ermborr
owingishi
ghert
hanbudget
ed.
bu
dget
ed? D.T h
ec ompanyincr
easedfr
om1 0
%t o20%t h
ed o
wnp ay
me nti
tr
equir
esfr
omcust
omers
.
A.Cashrec
eip
tsf
ornex
tmont
h. C.Prod
uct
i
onforne
xtmon
th. 2
5.Whi
chofth
ef ol
lo
wingisnotaf
unct
ion
albudget?
B.Inv
ent
oryatt
heendoft
hi
smont
h. D.Prod
uct
i
onfort
hi
smont
h. A.Ca s
hb udget C.Pu r
cha
singbudge
t
B.Direc
tlaborcos
t D.Re s
earc
ha nddev
elopment
bud
get
2
1.I
fac omp anyh asap oli
cyo fma i
nt
aini
nga ni nve
ntor
yo ffi ni
shedg o
odsatas peci
fie
d
pe
rce
ntageo fthen extmo n
th'
sb u
d g
etedsal
e s,budget
edp r
oduct
i
onforJanua
rywi
lle
xceed 2
6.Bytheendo fthi
sy earyoue xpectt
oh aveac ashb al
anceo fP5 00,
000.Wh ic
ho fth
e s
e
bu
dget
eds a l
e sforJanuarywhenbu dg
eted t
rans
act
ions
/i
nd i
cat
ors(notconsi
deredinyourest
i
ma t
e)wil
lreduc et
hisbal
ance?
A.Janu arys al
e sexceedbudgete
dF ebr
uarysa l
es. A.Amo di
fi cat
iononc redi
tt
ermstoc ust
omerswil
lre
duc ecredits
ale
s.
B.F e
bru arys al
e sexceedbudget
edJ a
nuarysa l
es. B.T herat
i
oo fcur
renttra
dereceiv
a bl
estotot
alr
ecei
vabl
e swilldecr
ease.
C.Janu arys al
e sexceedbudgete
dDe cembe rsal
es. C.Ad ial
oguewit
hk eys u
ppli
erswil
lal
lowdiscou
ntsonexten dedpaymentt
erms.
D.De cemb e rsalesexceedbudget
edJ anu
arys al
es. D.An ewma chi
newi llbeb o
u ghtwit
hp r
o c
eedsfrom ab a
nkl oantha
twillcar
rya1 7%
i
nter
estperannuma ndmo nth
lypayme n
tsover2years.
2
2.Acompan yth atma in
tai
nsar awma ter
ia
linvento
ry,whic
hisb ase
do nth
efoll
owi
ngmonth
's
pr
odu
cti
o nn eeds ,wil
lpur
chaseles
sma ter
ial
thanitusesinamo nt
hwhere 2
7.I
fcashrec
eipt
sfromc usto
me r
sa r
eg reat
erthansal
es,whicho fthefol
l
owingi
smo stl
ik
elyto
A.salese xcee dp r
oducti
on. betr
ue?
B.produ c
tione xceedss al
es. A.Ac cou
ntsrecei
vabl
ewi l
ldecre
as e
. C.Ou ts
tandingde b
twil
ldecr
ease.
C.plannedp roducti
onexceedsthenextmonth'
sp l
annedprodu
cti
on. B.Ca shbal
an c
ewilli
nc r
ease. D.T hecomp anywills
howap r
o fit.
D.plannedp roducti
onisles
sthanthenextmo nt
h'spl
annedproduc
ti
on.
2
8.Thecas
hb udgetf
or20x2wo ul
db ea ff e
ctedinsomewa yb yalloft
hefol
l
owingEXCEPT
2
3.Whi
cho fthef oll
owingismo stli
kel
ytore s
ulti
fX’sma nagersdeci
detoredu
ceinv
ent
oryto A.T hesal
esforec
a s
tforthefi rstmonthin20x3.
al
l
evi
at
eac as hd efi ci
encyshowninit
sini
ti
a l
c a
shb udget
? B.Ac ashdivi
dendd e
c l
aredi
n2 0x1forpaymenti
n20 x
2.
A.Alo weringo fX’scredi
trat
i
n g
. C.Ac ashdivi
dendd e
c l
aredi
n2 0x2forpaymenti
n20 x
3.
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06MAST
ERBUDGET Pa
ge3o
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MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

D.I
nt
er
est
exp
ens
eonl
oan
sta
keno
uta
ndr
epa
idd
uri
ng2
0x2
. 3
3.Onb
udget
ing,a
llof
thefo
ll
owingar
en o
tvali
d,ex
cept
A.Asal
e sbudge
tandas al
esfo
recas
tarethesamethi
ng.
2
9.Netc
ashin
fl owisgiv
entoomu chemphasi
sbyma n
agerst
oday,f
ort
heyknowtha
tcashisth
e B.Respons
ibi
l
it
yb u
dgeti
d e
nti
fi esrev
enuean dcost
swi
thth
eindi
vi
dual
resp
onsi
bl
efort
hei
r
co
mmo ncaus
eofb u
sin
essfai
lur
es.Netcas
hinfl o
wise qu
alto i
ncur
rence.
A.Ca shbal
anc
ea tt
hebeginn
ing+cashrec
eip
ts–cashdis
burs
eme n
ts C.Thepri
marypurpos
eo ft
hecashbudgeti
stos ho
wtheexpec
tedc
ashbal
anceatt
heend
B.Ca shr
ecei
vedduri
ngtheperi
odminusca
shdis
burse
me nt
sduri
ngth
ep e
ri
od oft
heb u
dgetper
iod.
C.Ca shbal
anceattheen doflas
tmo nt
h+c as
hf r
oma l
lsourc
eso fr
even
ue–r eve
nu e D.Thebestwaytoest
abli
shbudgetfig u
resistousel
asty
ear’
sac
tual
costanda
cti
vi
tyd
ata
pay
ments asth
isyear
’sbudge
testi
mate
s.
D.Ca shs
alesandcol
lec
ti
onsofaccou
ntsre
cei
vabl
eminusrev
enueandcapi
tal
expen
dit
ures
3
4.Whi
choft
hefol
lowi
ngs t
at
emen t
sisTr
ue?
A.Budgetdataaregener
all
yprepar
edbytopmanagementa
ndd i
st
ri
but
edd o
wn war
di nan
3
0.I
nf
ormat
io
nn otsh
ownint
hec
ashb
udg
etb
utne
ede
dinthep
rep
ara
ti
ono
fth
est
at
eme
nto
f org
ani
z a
tio
n .
op
erat
i
onsfo
rtheper
io
d B.Theb udgetc ommit
te
ei sr es
pons
ibl
efo rpr
epar
ingdet
a i
l
edb udg
etfi gur
e sinan
A.Divi
dends C.Sal
es org
ani
z a
tio
n .
B.Inven
tor
ylev
els D.TaxPa
ymen
ts C.Thepri
ma r
yp ur
p o
seofthecashbud
geti
stoshowtheexp
ec t
edca
shb a
lanceatt
h een
d
oft
heb udgetper
io
d.
3
1.Afin
anci
nggapoccur
swhen D.Underzero-
basedb u
dgeti
ng,ama n
agerisre
qui
redtost
artatz
erobudgetlev
elseac
h
A.Requ
ir
edass
etsexc
eedavai
l
abl
eequi
t
ies
. per
iod
, asi
f t
heprogr
amsinvol
vedwer
ebeingi
nit
i
ate
dfort
hefi r
stti
me.
B.Bu
dgete
dcashre
cei
ptsar
eles
stha
nbudget
edc
ashd
isb
urse
ment
s.
C.Th
eb ud
get
edcashbal
anc
eg o
esbel
owthemi
ni
mumreq
uir
edba
lan
ce. PROBLEMS
D.An
yo ft
hea
boveoccur
s. Sal
esbudge
t
1. Budg
etedsal
esfort
hefi r
stsi
xmo n
thsof
2001forHenryCorp.
arel
ist
edbel
ow:
3
2.Whi
choft
hefol
l
owingsta
tement
sa b
ou t
budget
edfi nan
cia
lst
ateme
ntsi
sinco
rr
ect? Jan Feb Mar Apr May J
une
A.Thebudget
edincomestat
ementisdev
elop
edfr
omthebudget
edfor
thecur
ren
t y
ear. UNITS 6 ,
000 7
,000 8,0
00 7,0
00 5,0
00 4 ,0
00
B.Thebudget
edbalanc
es hee
tisdevel
opedent
i
rel
yfr
omthebudge
tsfo
rthecur
renty
ear. :
C.Oncee st
abl
is
hed,theb udget
edincomes t
at
ementprov
idest
heb asi
sfore v
alu
ati
ng Henr
yCo r
p.hasap o
li
cyofmai
ntai
ni
nganinven
tor
yo ffi ni
she
dg oodsequ
alt
o40per
cen
tof
companyper
for
ma nce
. t
henextmont
h'sbudge
tedsal
es.
IfHenr
yCorp.pl
anst
op rodu
ce6,00
0u ni
t
sinJu
ne,wh
atar
e
D.Costofgood
ss ol
disdeter
minedbymu l
ti
pl
yi
ngthebudge
teduni
tsal
esbythebudget
ed bu
dgete
ds a
lesfo
rJul
y?
tot
alu
n i
tpr
oduc
tio
nc ost
. A.1 ,
000uni
ts C.8 ,0
0 0uni
ts
B.3 ,
600uni
ts D.9 ,0
0 0uni
ts
Co
mpr
ehe
nsi
ve
MSQ-
06MAST
ERBUDGET Pa
ge4o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

Ques
ti
ons5a n
d6a r
eba s
edo nthefo
ll
owingi
nfor
ma t
i
on . Begi
nni
ngin
vent
or
yo f
fi ni
she
dg o
ods 3,
000uni
t
s
St
a.Barb
araiso neoftheman uf
act
urer
so fapartusedintheprod
ucti
onofapop u
larconsu
me r Pl
annedendi
ngi
nvent
or
yoffi n
ish
edgoo
ds 7,
600uni
t
s
pr
oduc
t.Sa l
eso ft
heconsume rpr
oducti
n1 985areesti
matedat5,0
00,000uni
t
s. Sta.Barbar
a Budge
tedsal
esofZ
IM 3
6,8
00uni
t
s
r
egul
arl
ysuppl
i
e s40%o fthepart
susedinthenewp r
oducts
.T wopart
sunit
sar
en eededfo
reach Al
lst
ocksoffinis
hedgoodsmus
thavesu
cces
sfu
ll
ypasse
dthequ
ali
t
ycont
rol
che
ck.Wh
ati
s
pr
oduc
tunit
.As i
defr
omt henewp r
oduct
s,ther
eisal
soar epl
acementpar
tsmark
et.Ov e
rthepast t
hedir
ectl
aborb
udget
fort
hemont
h?
t
hre
eyears,t
hec ompanyhassoldth
efoll
owin
gn umberofre
place
me nt
part
s: A.1 98,
720hour
s C.2 23,
500hou
rs
1982 300,
000 B.2 00,
000hour
s D.2 25,
000hou
rs
1983 330,
000
1984 363,
000 6
.T r
opi
ca lManuf
act
ur
ingCorpor
at
ionisusi
ngth
efol
lo
wingfl ex
ibl
e-
budgetf
or
mulaf
o rannua
l
Thi
str
endi
se xpect
edtoconti
nue.Thep a
rtsar
es ol
dforP4perpiec
einthenewproduct
sma r
ket i
ndi
rectlab
orcost
:Totalc
ost=P1 2
,00
0+P0 .
75permachi
nehour
.F ort
hemont
hofJ une
,
an
dP4 .
50intherepl
acementpart
sma r
ket. t
heo p
e ra
ti
ngbudget
sarebasedupon10,
000hou
rsofpl
anne
dma chi
neti
me.Ind
ir
ectla
bor
co
stsi
n cl
udedi
nthi
spla
nnin
gb ud
getar
e
2
.T h
ees
ti
mate
dn u
mbe
rof
par
tst
obes
oldb
ySt
a.Ba
rbar
ain1
985i
s A.P7 ,500 C.P1 7
,500
A.2,
399
,300 C.4 ,3
99,
300 B.P8 ,500 D.P1 9
,500
B.4,
000
,000 D.4 ,4
35,
600
Questi
ons7and8a r
eb asedonthefol
lo
winginf
ormat
ion
.
3
.T h
eamoun
tofexp
ect
edr
eve
nueb
ase
dont
hees
ti
mat
ednu
mbero
fpa
rt
stob
eso
ldi
n19
85i
s Theb ud
getcommit
teeof F
erbel
Co mpanyisprepar
i
ngit
sma nuf
actu
ri
ngbudget
fortheyear1
983.
A.P9,
796,
850 C.P17,
597
,20
0 I
nit
i
a lest
i
matesind
icat
ea nannualsal
esforecas
tof40,0
00u ni
ts.Thecompanys ha
llal
sonee
d
B.P16
,000,
000 D.P17,
796
,85
0 10,
00 0uni
t
sforst
ock.Ec o
nomicl
o tp
u r
chasesof1,
750ki
losofmate
ri
alAatP8per ki
l
oa nd1
,00
0
l
it
ersofmater
i
alBa tP15perli
t
erarerequi
redtopr
oducethe50,
000uni
ts.
Pr
oduct
i
onb ud
get Budgete
dfact
oryoverhe
ade x
pensesforth
isprod
ucti
onare
:
4. Beat
l
essCo r
p,p
lan
stos e
ll2
00,
000unit
sofLet
-I
t-
Bep r
oducti
nJ ul
yanda n
ti
cip
ateag r
owt
h Fi
xedfac
toryover
head
i
nsalesof5%permo n
th.Thetar
getendi
nginv
ent
oryinunit
so ft
hepro
d uc
tis80%o fth
e Supervi
si
on P4,00
0
ne
xtmo n
th’
sest
i
matedsal
es.Th
ereare150,
000uni
tsi
ninve
n t
oryasoft
hee ndofJun
e.The Depreci
at
ion P2,
3 0
0
pr
oduct
io
nrequi
r
ementinuni
t
sofLet
-I
t-
Befort
hequart
erend
ingSe p
tember30wouldbe Ins
urance P5 0
0
A.6 65,
720 C.6 75,
9 2
5 Var
iabl
efact
oryover
head
B.6 70,
560 D.6 91,
5 2
5 Ind
ir
ectlabor P0.
50perdi
re
ctl
abo rhour
Ind
ir
ectsuppl
ies P0.
008perun
it
5
. Eac
huni
tofp
rodu
ctZI
Mta
kesfivedi
rect
lab
orhour
stomake
.Quali
tys
tan
dar
dsar
ehi
ghand Generalf
acto
ry P0.
10perdi
re
ctl
abo rhour
8%ofu
nit
spro
duceda
reno
rma
ll
yre
jec
tedduetos
ubst
anda
rdqua
li
ty
.Nextmont
h’
sbud
get
s Laborh
oursandrate
sforthetwooperat
io
nsare
ar
easf
ol
lows
: Operati
on1 4
,000hour
satP5.
00pe rhour
MSQ-
06MAST
ERBUDGET Pa
ge5o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

Op
era
ti
on2 2
,00
0ho
ursa
tP4
.50p
erh
our B.9
6,0
00k
gs. D.9
9,4
00k
gs.

7
. Bas
edont
heabov
ein
for
mat
i
on,t
heb
udg
ete
dto
tal
manuf
act
ur
in
gco
stsf
orF
erb
elCo
mpa
ny 1
1.GLORIACORP .hasthefol
l
owingbudgete
sti
ma t
esf
ori
tsseco
ndyea
rofoper
ati
ons:
f
ort
hey
ear198
3woul
dbe Pr
ojec
tedsal
es–P3 ,500,
000
A.P51,
040 C.P68,
800 Pr
ojec
tedneti
nc o
meb efor
etax–1 2
%o fsal
es
B.P60,
800 D.P76,
560 Est
imat
eds e
ll
inganda d
mini
str
ati
veexpen
ses–2 5%ofsal
es
Di
rect
laborandfact
oryover
headarebudget
edat70%ofthet
ota
lmanu
fact
ur
ingcos
t.
8
.T h
efa
cto
ryo
ver
headrat
ebase
dond
ir
ect
lab
orhou
rswoul
dbe I
nvent
ori
esaree s
ti
ma t
edasfol
lo
ws :
A.P0.
67perd
ir
ectl
aborh
our C.P2.1
6perdi
r
ect
lab
orh
our Rawma te
ri
als Goodsinpr
ocess Fin
ish
edg oo
ds
B.P1.
80perd
ir
ectl
aborh
our D.P2.7
0perdi
r
ect
lab
orh
our Begi
nnin
g P220,
000 P250,
000 P350,0
00
Endi
ng 27
0,000 300
,00
0 420,
000
Rawmater
i
alspur
chas
esbudget Theest
imate
dp ur
chasesofrawma t
eri
al
swouldbe
9. Mi
enCo .isbudget
ingsale
so f5 3
,000u ni
tsofp r
oductNousforOct
ober2000.The A.P6 97,00
0 C.P7 47,
500
manuf
act
ur
eo fo
neu n
itof
No u
srequi
res4k i
lo
sofchemic
alLoi
re
.Duri
ngOcto
ber1998
,Mi
ne B.P7 32,50
0 D.P9 67,
500
pl
anstoreduc
et h
ei nv
ento
ryo fLoi
reb y5 0,
000kil
osa ndi
ncr
easethefi ni
she
dgoods
i
nven
tor
yofNo u
sb y6,0
00u ni
t
s.T hereisnoNo usworkinpr
oce
ssinv
ent
ory.Howmany Oper
ati
nge xpensesbudget
ki
l
osofLoi
r
eisMienbudget
in
gtop u
rchaseinOct
ober2000? 12
.Co okCo .’
stota
lcostsofoperat
ingfi ves a
lesoffic eslasty
earwere$500,
000,ofwhic
h$70,0
00
A.1 38
,000 C.1 86
,000 re
presentedfi xedc osts
.Co o
kh asdeterminedthattot
alcost
sa r
esigni
fi c
an t
l
yinfl uenc
edb y
B.1 62
,000 D.2 38
,000 t
hen umb erofsal
e so ffic eso pe
rat
ed .L as
ty ear
’scostsandnumberofsalesoffic escanbe
useda stheb asesforp r
e d
ict
in
ga nnualco st
s.Wh atwo u
ldbetheb udget
edc os
tforthe
1
0.Nextmonth’
sbudget
edsale
sforTEMPi s1 8,
000uni
t
s.Ea chuni
tofp r
oductTEMPuses6 comingyear i
fCookwe retooperat
esevens al
eso ffic es?
ki
l
ogramso frawma t
eri
al
s.T heproducti
onandinv
ento
ryb u
dget
sf orJune1 9
92areas A.$ 5 86,
000 C.$ 672,
000
f
ol
lows: B.$ 6 02,
000 D.$ 700,
000
Openi
ngI n
vent
ory Pl
annedEn d
ing 13
.Ka rmel,I
nc.p a
yso utsal
esc ommissi
onstoitssal
e st
ea minthemo n
ththecompanyrecei
ves
Inve
ntor
y cashforpayme n
t.T hesec o
mmi ssi
onsequal 5
%o ft
otal(
mo nt
hl
y)cashinflowsa saresul
tof
Ra wma t
er
ial
s 21,000kgs. 24,400kgs. sal
es. Ka r
me lhasb udgetedsa l
esof$ 300,0
00f orAu g
u st
,$400,
000forSeptember,and
Fini
shedgoods 15,0
0 0uni
t
s 11,
4 0
0u ni
t
s $200,
00 0forOcto
b er.App r
oxi
ma t
el
y,halfofal
l s
a l
esa r
eo ncre
dit
,andtheotherhal
fareal
l
Dur
ingtheprodu
cti
onpro
cess,
iti
susuall
yfoun
dthat1
0%o fpr
oduct
ionuni
tsarescr
app
edas cashsa l
es.Experi
en cein
d i
cat
esthat70%o fthebu d
getedcredi
tsal
eswil
lbecol
lect
edinthe
de
fect
iveandthi
slo
ssoccur
saft
ertherawma t
er
ial
shav
eb e
enp l
ace
dinp r
ocess. monthfoll
owingthes al
e,20%t h
emo n t
ha f
tert
hat,and1 0
%o ft
hesale
swillb
eu ncol
le
cti
bl
e.
Whatwil
lther
awma te
ri
alpu
rchase
sb einJune
? Basedo nthisi
nfor
ma ti
on,whats h
ouldbeth etot
alamo untofsal
escommissi
onspaidoutby
A.8 9,800kgs
. C.9 8,
440kgs. Karmelinthemo nt
ho fOctober
?
MSQ-
06MAST
ERBUDGET Pa
ge6o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

A.$
8,5
00 C.$
17,
000 Month Cas
hSa l
es Cre
ditSale
s
B.$
13,
500 D.$
22,
000 Febr
uary P8 0
,000 P3 40,
000
March 100
,000 400,0
00
1
4.Budj
iCor
p.i
sp r
epari
ngi
tsbudget
for19
B.F or19A,th
efol
lowin
gwererep
o r
ted
: Apr
il 90
,000 370,0
00
Sal
es(100,
000unit
s) P1,
000,
000 May 120
,000 460,0
00
CostofGoodsSol
d 600,
000 Jun
e 110
,000 380,0
00
Gro
ssPr o
fi t P4 00,
000 Col
l
ecti
onsare40
%inthemont
hofsa
le,4
5%inth
emo nt
hfol
lowi
ngthesale,and1 0
%two
Opera
ti
ngEx pe
nses(i
ncl
udi
ngdepre
cia
tionofP40,
000) 240,
000 mont
hsfol
lo
wingt
hesal
e.Th
eremai
ni
ng5%isex
pect
edtobeun c
oll
ect
i
b l
e.T hecompan
y’s
NetI
ncome P1 60,
000 t
ot
albudget
edcol
l
ect
i
onfr
omApri
lt
oJun
eamount
sto
Sel
l
ingpr
ice
swilli
ncr
easeby10%a ndsal
esvolumeinuni
tswil
ldec
rea
seb y5%.Thecostof A.P1 ,
090,
250 C.P1 ,
397,
500
go
od ss
oldasap erc
entofsal
eswil
li
ncr
easeto6 2%.Othe rt
handepr
ecia
ti
on,a
llope
rat
i
ng B.P1 ,
325,
500 D.P1 ,
468,
500
co
stsar
evari
able
.Bu dj
iwi
ll
budgetaneti
ncomefor19Bof
A.P1 67,
100 C.P1 68,
000 1
7.T
hef
oll
owi
ngh i
st
ori
calpat
ter
nonitsc
redi
tsal
esofRai
nyCo.wa
spres
ent
ed:
B.P1 67,
500 D.P1 76,
000 7
0 %coll
ect
ionduri
ngthemonthofs
ale
.
1
5 %inthefi rs
t mont
ha f
t
ersal
e.
1
5.I
ti
sb udget
i
ngtimeforDe lCo.Thefol
lowingassumpti
onswer
ea gr
eeduponfort
henextyear 1
0 %inthesecondmo n
thaft
ersa
le.
af
t
e rast
rat
egi
cp l
anni
ngs essi
onwh i
chcove r
edafi v
e-ye
arhor
izo
n 4
%i nthethi
r
dmo n t
haft
ersal
e.
1
. Salesisest
i
ma tedtobea t70,0
00u ni
tsati
tsnati
ona
lsel
li
ngpri
ceofP126.0
0.7 5% 1
%u nc
oll
ect
ibl
e.
oftot
alsal
esa r
eo ncre
dit
.1 .
5 %o fnet
sale
sisprov
ide
dfordoubt
fu
laccount
s. T
hes
a l
esonaccountoft
helasts
ixmont
hsofthey
e a
rwerer
epor
te
dasfo
ll
ows:
2
. Salesdis
countsaregiv
entova r
iouscust
omersatdi
ff er
entr
atesandnett
og r
ossrat
i
o Jul
y P12
0,0
00
isat93% August 14
0,0
00
3
. Ma r
k-uponme r
chandi
seisa t45%o fin
voic
ec os
t.Begin
ninginv
ent
o r
yisP80,
9 0
0 Sept
emb e
r 16
0,0
00
andise x
pect
e dtobereducedbyP1 5,
000a t
theendoft
hep e
ri
od. Octo
ber 18
0,0
00
4
. Sell
ingandadmin i
st
rat
i
vee x
pe ns
e si
se x
pecte
dtobe1 5
%o fgro
sssales
. November 20
0,0
00
5
. De p
reci
ati
onisco mput
eda t
P5 00,
0 0
0. December 17
0,0
00
Theproj
ect
edo pe
rat
i
n gincomeforth
ey earis
A.P1 73,8
02 C.P2 52
,741
B.P2 52,3
41 D.P2 96
,841 Thet
ot
alcas
hcol
l
ect
ion
sd u
ri
ngth
ef o
urt
hcal
end
arquart
erf
ro
msa
lesma
deo
nac
cou
nt
du
ri
ngt
hefou
rt
hca
len
darqu
art
erwo
uldbe
Cashb
udget A.P345,
000 C.P5 0
2,8
00
16
.Pe r
aIn
c.pr
epa
redt
hef
ol
lo
win
gsa
lesb
udg
et B.P460,
000 D.P5 5
0,0
00
MSQ-
06MAST
ERBUDGET Pa
ge7o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

i
nDe c
emb e
rina
nti
ci
pat
i
onofhig
hersa
lesv
olumefo
rCh r
i
stmas.Th
ein
crea
sewil
lbeabo
ut
1
8.MNOCo r
porat
i
onhasaP35,
000bal
an c
eo facc
oun
trece
ivabl
eatt
hebegi
nni
ngofi
t
sbudg
et P100
,000.Amount
spayab
letotr
adecr
edi
to
rswil
la l
soi
ncre
asebyP25,
000.Est
ima
teof
pe
ri
od.Ithasbudg
ete
dP160,
000cre
d i
tsal
esandexp
ectstocol
l
ect7
0%o ft
hes
eduri
ngt
he pa
yme n
ttobemadedu
ri
ngthemont
hofDec
emb e
rformer
chandi
sei
s
bu
dgetper
io
d. A.P1 00,
000 C.P2 50,
000
Whati
stheendi
ngbal
anc
eofacco
untsrec
e i
vab
lea
ssumingth
atal
lbut
10%oftheb
egi
nni
ng B.P1 50,
000 D.P3 00,
000
ba
lan
ceiscol
le
cte
dd u
ri
ngt
hebudget
p er
i
od .
A.$ 3
,560 C.P7 1,
500 2
2.JL
TCo r
pora
ti
onexpect
stosel
l150,
000u n
it
sd u
ri
ngthefi r
stqua
rte
rof1998,wit
hane n
din
g
B.P5 1,
500 D.P1 43
,500 i
nvent
or
yforth
eq ua
rt
erof20,
000u ni
t
s.V ar
iabl
emanuf
act
uri
ngcost
sarebudgetedatP50
pe
ru ni
t
,wit
h7 0%oftot
alvar
i
ablema n
ufac
tur
ingcos
tsre
quir
i
ngc a
shp a
ymentsduri
ngthe
1
9.I
npre
p ar
i
ngit
sc as
hb u
dgetf
orJ
uly
,19x7
,Art
Companymadeth
efol
l
owi
ngproj
ect
i
ons qu
art
er.Fix
edma nu
fac
tur
in
gc os
tsarebudget
edatP120,
000perquar
te
r,40%o fwhi
chare
Sal
es P1
,500
,000 ex
pect
edtoreq
uir
ecashpaymentdu
ri
ngthequart
er
.
Gros
sProfi t 25% I
nthecashbud
get,
payment
sformanuf
actu
ri
ngcostsd
uri
ngth
eq u
art
erwil
lt
ot
al
Decr
easeini
nvent
or
ie
s P 7 0
,000 A.P5 ,
298,
000 C.P5 ,
998,
000
Decr
easeinacco
unt
spayabl
efo
rin
vent
or
ie
s 120,
000 B.P5 ,
950,
000 D.P8 ,
500,
000
Fo
rJuly
,19X7
, whatwer
eth
ee s
ti
mate
dcashdi
sbur
semen
tfo
rinv
ent
or
ie
s?
A.P 9 35,
000. C.P1 ,
055
,00
0. 2
3.Har
ri
sonCo mp anyh asb u
dg et
editsopera
ti
onsforAugust
.Noc h
ang ei
nth
einvent
orylev
el
B.P1 ,
050,
000. D.P1 ,
175
,00
0. du
rin
gthemo n
thisp la
nned.Se l
ect
edd at
abasedonesti
matedamountsa
reasf
oll
ows:
Netl
oss $(
120,
000)
2
0.TheJanu
a r
y1 983budgetofBal
agta
sCo mpanyisbei
ngp r
epare
db yt
hebudgetoffic e roft
he I
ncreaseina ccount
sp a
ya bl
e 4
8,000
co
mp an
y.I ntheprepa
rat
io
no fth
ec as
hb ud
gettheest
imatesf
orthemont
ho f
J a
nuary
,1983 Depre
c i
ati
one xpense 4
2,000
i
ncl
udethefoll
owin
g: Decr
ea seing r
o s
sa mountsoft
radeaccountr
ecei
vabl
es 72
,000
Sal
es P937,5
00 Purc
haseo f equi
pme nt
o n90-daycr
edit
ter
ms 1
8,000
Grossprofi t(
basedons a
les
) 25% Prov
is
ionfo resti
matedwa rr
ant
yliab
il
i
ty 1
2,000
I
ncreaseininv
ento
ri
es P75,0
00 Whati
sthee xpectedchangeinthec as
hp os
it
i
ond ur
in
gAu gu
s t
?
Decreaseintr
adeaccount
spayabl
e P30,0
00 A. $18,
000d ec r
ea s
e. C. $36,0
00incr
ease.
Theest
i
ma t
e dcashdis
burs
eme nt
sfori
nvent
or
iesinJan
u ar
y,1983i
s B. $30,
000d ec r
ea s
e. D. $54,0
00incr
ease.
A.P5 98,
12 5 C.P7 48,125
B.P7 33,
12 5 D.P8 08,125 2
4.Thefo
ll
owinginformati
onwa se x
tr
actedfr
omtheMa yCashBudgetofHai
rSt
ars
,ag r
oomp ad
f
ormena ndwo me n:
2
1.St
a.El
enaMe r
chandi
sin
gCo mpanyp l
anst
os el
li
nDe c
e mber15,0
00uni
tsofi
tsprodu
ctata Bu dgetof Hai
rStar
s, agro
o mpadformena n
dwo men:
un
itpr
ic
eo fP2 0.Theesti
matedgro
ssp r
ofi ti
s2 5
%o fsal
e s
.T hei
nve
n t
or
ywillbei
ncr
ea s
ed Exce s
so f cas
ha va
il
a bl
eoverdi
sburs
eme nt
s P 8 00
MSQ-
06MAST
ERBUDGET Pa
ge8o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

Cashbal
ance
,May1 1
0,10
0 B.P4
14,
000
. D.P4
30,
000
.
Tot
alc
ashdis
bur
semen
tfo
rMay 3
2,50
0
Thebusi
nes
scano n
lybo
rr
owmo n
eyinr
oundfigur
esofP1,
000amo
unt
s.Ift
hebusi
nes
sis Compr
ehensiv
e
r
equi
redtomaint
ai
nami ni
mumc as
hbala
nceofP10,
000,ho
w muc
hmo neysho
uldbe Ques
ti
ons27thru30a r
ebasedonth
efol
lowi
ngin
for
mati
on.
bo
rro
wedinMay? Fo
rpurpose
so fprepa
ri
ngthecashpr
oj
ecti
onsandot
herbudg
etest
i
mat
esfort
heth
ir
dquar
te
rof
A.P9 ,
200 C.P22,
000 19
88,th
efoll
owingi
nfor
mati
onispr
esen
tedtoyo
ub yt
hemanagemen
tof
Vir
goCorp
orat
i
on:
B.P1 0,
000 D.P23,
000 SecondQua r
te
rSale
sDa t
a: Pesos Uni
ts
Apr
il P530,
000 1
0,6
00
2
5.Di
gnaComp anyhadth
efo l
l
owingtr
ansact
i
onsi
n19
x7,
thei
rfir
sty
earo
fop
era
ti
ons May 550,
000 1
1,0
00
Sal
es(90%c ol
l
ectedi
n1 997) P1
,50
0,000 June 570,
000 1
1,4
00
Baddebt
swr i
t
e-off s 6
0,00
0
Di
sburse
me nt
sforcostandexpen
ses 1
,20
0,000 Proj
ect
eds al
esfort
h enextf
ourmo nt
hs Peso
s Un i
t
s
Di
sburse
me ntf
orin
comet axes 9
0,000 Jul
y 540,
000 10,800
Pur
chaseoffi xedas s
ets 4
00,000 August 550,
000 11,000
Depre
cia
tio
no ffi x
eda sset
s 8
0,00
0 Septe
mb er 560,
000 11,200
Pr
oceedsfro
mi s
suanceo fc
ommo nst
ock 50
0,000 Octobe
r 580,
000 11,600
Pr
oceedsfro
ms hort
-t
ermb or
rowi
ngs 10
0,000 Al
lsale
sa r
eo nc hargeba s
isandb i
ll
eda tth
ee ndo ft
h emont
h.A5 %d i
scounti
sg i
veno n
Payment
so nshor
t-
ter
mb orro
wings 5
0,000 co
ll
ect
ionswit
hi
nt he15daysfromb i
l
li
ngd a
te.Salescol
le
cti
onsar
egener
all
yma deasfol
lows:
Whati
sthecashbala
ncea tDecember31,1
9x7
? 70% wi t
hinthemo nthfol
lo
wingtheb i
ll
i
ngd at
ewi t
h4 0
%o fthi
sbei
ngc ol
l
ectedwithi
nthe
A.P1 5
0 ,
000. C.P210
,000
. di
scountperi
od.
B.P1 7
0 ,
000 D.P280
,000
. 27% o nthes ec
ondmo nthfo
ll
owingthebil
l
ingdat
e.
3% c onsi
dereduncoll
ect
ibl
e
2
6.I
nprepar
i
n git
sb u
dgetfo
rJ ul
y,1997,JoyComp anyhasth efol
l
owinga
ccou
ntsre
cei
vab
le Mer
c h
andis
ep urc
ha s
esareg ene
rall
ypai
da sfol
l
ows :
i
nf
or
ma t
i
ona vai
l
abl
e: 50% wi t
hinthemo n
ththeyareincu
rre
d .
Ac
co u
ntsre
ceiv
abl
ea tJ
une3 0
,1 9
x7 P350,
000 50% a f
terthemo nt
htheyareinc
u r
red
Es
ti
ma t
edcredi
tsa
lesfo
rJuly P400,
000 Endi
nginven
toryinunit
s(costperuniti
sP4 0)i
s3 0%h i
gherth
anthefo
ll
owingmo nt
h’ssale
sin
Es
ti
ma t
edcoll
ect
i
onsinJul
yforcred
its
alesinJul
yandp ri
ormont
hs P320,
000 uni
t
s.Op era
ti
nge xpensesareonc as
hb asi
sa n
da reest
imat
edtobe15%o ft
hec urr
entmo n
th’
s
Es
ti
ma t
edwrit
e-
off sinJul
yforuncol
l
ecti
blecre
ditsa
les P1 6
,000 sa
lesi
nclud
ingmo nth
lydepreci
at
ionofP10,00
0.
Es
ti
ma t
edprovi
si
onfordo
u b
tf
ulaccoun
tsforcre
dits
alesinJul
y P12,
000 AsofJune30,1988,AccountsRecei
vablebal
ancewa sP630,
000andMerchan
d i
seInvent
orywas
What
istheproj
ect
edbal
anceofaccount
srecei
vableatJ
uly31,19x7? P565,
000.
A.P4 0
2,000. C.P4 26,
000.
MSQ-
06MAST
ERBUDGET Pa
ge9o
f11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

2
7.Th
ebu
dget
edc
ashc
oll
ect
i
onsf
ort
hemo
ntho
fJu
lywo
uldbe mat
eri
alar
en eededtomanu
fact
ur
ee ac
hu n
itoffi ni
shedprodu
ct.Rawmat
eri
al
sareexpe
cte
dto
A.P39
1,0
20 C.P547,
500 cos
tP0.1
8p ergal
londur
i
ngthecomin
gmo nth,i
tspr
evai
li
ngcost
.Rawma t
er
ia
lsex
pecte
dtobe
B.P53
9,5
20 D.P556,
020 onhandatt
heendo ft
hemont
htot
al8,
000ga l
l
o n
s.
Var
ia
bleadmi
n i
st
rat
iv
eandsel
li
ngexpe
n s
esisP1.00peruni
t
.
2
8.Th
ebu
dget
edc
ashp
ayme
ntso
fth
emo
ntho
fSep
temb
erwoul
dbe I
nassi
sti
ngth
ec ompanyt
ofor
mulat
ethebudget,
youdete
rmine
dthefo
ll
owi
ngbu
dgetp
a r
amet
ers
.
A.P45
9,6
00 C.P518,
000
B.P46
8,8
00 D.P533,
600 3
1.Bu
dge
tedco
sto
fra
wma
ter
i
alst
obeu
sedi
npr
odu
cti
oni
s
A.P8,
910 C.P2 2,
410
2
9.Th
epr
oj
ect
edn
eti
nco
mef
orSe
pte
mbe
rwo
uldbe B.P14,
940 D.P1 24
,50
0
A.P28
,00
0 C.P1
12,
000
B.P38
,00
0 D.P1
22,
200 3
2.Bu
dge
tedr
awma
ter
i
alsp
urc
has
esc
ost
is
A.P22,
410 C.P2
3,7
60
3
0.Theb
alan
ceofa
ccoun
tsre
cei
vab
lea
tth
een
do f
Jul
y,a
ssumi
ngt
hat
nou
nco
ll
ect
i
blea
cco
unt
s B.P22,
950 D.P1
24,
500
ar
ewri
tt
enofffor
Julywoul
dbe
A.P613,98
0 C.P6 3
0,4
80 3
3.Bu
dge
teddi
r
ect
lab
ori
s
B.P622,50
0 D.P6 4
5,6
60 A.P20,
750 C.P6
2,2
50
B.P33,
200 D.P8
3,0
00
Questi
ons3 1thr
u3 8a r
eb asedo nt
hefol
l
owin
gi nf
ormati
on.
Thefoll
owinginformati
o nh a
sb eengathe
redb ytheBu dge
tDi r
ectoro ftheKa ret
onCo mpany, 3
4.Va
ri
abl
eover
hea
dco
stp
erd
ir
ect
lab
orh
our
is
anot
hero utfi tma nagedb ytheMa sugi
dCo mp a
n y
.T hefi rm ma nufact
uresa ndsell
sonlyone A.P1.60 C.P4
.80
pr
oduct.Th esell
ingpriceduri
ngthecomin
gmo nthisexpec
tedtobet hep r
evai
lingpri
ceofP5p er B.P1.80 D.P6
.40
uni
t.Exp e
c t
eds al
esd uri
ngthemo nt
hisatot
alof 7
5 ,
000uni
tsoffi ni
sh e
dg ood s
.F i
ni
shedg o
ods
expec
tedtob eo nhan da tt
heendo ft
hemonthtota
l50,00
0u ni
t
s .F i
nishedgoo dsexpect
edtobe 3
5.Fi
xedo
ver
hea
dco
stp
erd
ir
ect
lab
orh
our
is
onhanda tthebeginni
n gofhemo nt
htot
al42,
000u ni
ts. A.P1.60 C.P4
.80
Di
rectl
ab orcostisP3 .
00p erhour.One-f
our
tha nhourofdi
rectl
ab orisrequi
redtoma nufac
tur
e B.P1.80 D.P6
.40
eachunitoffi nishedp r
oduct
.
Fact
oryo v
e r
headisa ppli
edtowo rk
-i
n-
proc
esso nthebasi
sofdirectl
a b
o rhour
s .Va r
i
ablefac
tor
y 3
6.Bu
dge
tedc
ont
ri
but
i
onma
rgi
nis
expens
e satthep l
a n
n edlevelofoper
at
ion
sise xpect
edtoamo unttoP3 3,200;fi xedo v
erhea
dis A.P1.
80 C.P3
.40
expec
tedtoa mou ntt
oP9 9 ,
600. B.P2.
58 D.P5
.00
Therawma t
eri
alsexpe ct
edtobeo nhandatt
h ebeginni
ngofth
emo nthtot
a l5
,000g al
l
ons.On l
y
onekindofra wma ter
ialisusedtoprod
ucethefi ni
shedgoods.On ea ndone-hal
fg a
ll
onsofraw 3
7.Bu
dge
tedc
ost
ofg
ood
sso
ld(
fu
llc
ost
)i
s
MSQ-
06MAST
ERBUDGET Pa
ge1
0of
11
MANAGEMENTADVI
SORYSERVI
CES HI
LARI
OTAN

A.P7
6,5
00 C.P1
96,
500 T
heo
ry Prob
lems
B.P9
6,5
00 D.P3
04,
000 1
.A 2
1.B 1.D 2
1.D
2
.C 2
2.C 2.C 2
2.C
3
8.Ne
tpr
ofitbef
or
eta
xis 3
.D 2
3.B 3.D 2
3.D
A.P53,
000 C.P1
78,
500 4
.D 2
4.B 4.A 2
4.B
B.P103
,50
0 D.P2
49,
500 5
.A 2
5.A 5.D 2
5.C
6
.C 2
6.D 6.B 2
6.B
7
.B 2
7.A 7.C 2
7.B
8
.A 2
8.C 8.B 2
8.D
9
.C 2
9.B 9.C 2
9.A
1
0.C 3
0.B 10.D 3
0.C
1
1.B 3
1.A 11.C 3
1.C
1
2.B 3
2.B 12.C 3
2.B
1
3.C 3
3.B 13.B 3
3.C
1
4.C 3
4.D 14.A 3
4.A
1
5.D 15.A 3
5.C
1
6.B 16.D 3
6.B
1
7.D 17.B 3
7.C
1
8.B 18.B 3
8.B
1
9.A 19.D
2
0.D 20.D

MSQ-
06MAST
ERBUDGET Pa
ge1
1of
11