The cash budget is developed from the budgeted income statement.
a. True
b. False
Answer: B
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Storing and Issuing Materials
- If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs.
- If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual costs.
- A static planning budget is suitable for planning and for evaluating how well costs are controlled.
- It may be easier to control fixed costs than variable costs.
- A flexible budget performance report should contain fixed as well as variable and mixed.
- A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget.
- When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected.
- A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period.
- The ____ sheet is used to accumulate the indirect costs in each department that cannot be charged to specific jobs.
- A materials ledger card serves as a(n) __________ record.
- The protection and identification of materials and the keeping of records are the responsibility of the ______________________.
- The general ledger Raw Materials account controls the _______.
- The costs of materials issued from the storeroom are summarized in the ______.
- A bill of materials Is sometimes used as a materials requisition.
- A materials requisition is used to authorize the purchase of direct materials.
- The cost of indirect materials used is charged directly to the specific job.
- The return shipping order authorizes the return of materials to the supplier.
- The return of materials to the supplier is recorded in the returned materials journal.
- At the end of the period, the balance of the Raw Materials account should equal the total of the balances (dollar amount) on the materials ledger cards.
- The On Order column of the materials ledger card shows the number of units reserved for job orders to be manufactured.
- It is not necessary to record the cost of unused materials returned to the storeroom on the job cost sheet or the departmental overhead analysis sheet.
- Materials returned to the storeroom are recorded at current market price.
- A general journal entry is made to correct the Vouchers Payable account for materials shipped back to the supplier.
- The return of materials to the storeroom is recorded on the materials ledger card by an entry in parentheses or brackets in the issued column.
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