Subject: Finance and Accounting
Topic: COST ACCOUNTING
Language: English (U.S.)
Pages: 4
Instructions
Cost Acct Q1 Why is budgeting important? Describe how you use budgeting in your personal life or in your company. Q2 I was just thinking about this....would separation of duties be just as important in budgeting as it is in financial accounting reporting?? I mean, should the budgeting folks be the same as the folks that prepare "after the fact" financial statements?? I am wondering if there is any possibility of collusion here....your thoughts, anyone? Q3 B&B is a retailer of consumer goods. The company generates a gross margin of 25% of sales. Sales are 30% for cash and 70% on credit. Credit sales are collected in the month following sale, and accounts receivable on December 31, 2014 are the result of December credit sales. Actual and budgeted sales for the period were as follows: December 2014(actual) $150,000 January 2015 $160,000 February 2015 $152,000 March 2015 $162,000 April 2015 $140,000 The company plans for each month's ending inventory to be 30% of the following month's budgeted cost of goods sold. Half of a month's inventory purchases are paid for in the month of purchase; the other half are paid for in the month following purchase. The accounts payable on June 30 are the result of December, 2014 purchases of inventory. Additional Information: Account Balances as of December 31, 2015: Cash $15,000 Accounts receivable $105,000 Inventory $48,000 Buildings and equipment, net $220,000 Accounts payable $45,000 Capital stock $150,000 Retained earnings $195,000 Questions: 1. Using the data above, for quarter ending March 2015, prepare the following: a. The schedule of the expected cash collections b. The merchandise purchases budget Hi everyone, here is more information for B&B: All monthly expenses were paid monthly. Monthly expenses included: commissions, $20,000; rent, $15,200; other expenses (excluding depreciation), 10% of sales. Depreciation is $5,500 for the quarter and includes depreciation on new assets acquired during the quarter. The assets acquired for cash during the quarter included equipment of $15,000 in January and $10,000 in February. The company wishes to maintain a minimum cash balance of $20,000 at the end of January and February and $5,000 at the end of March. The company has a financing facility that allows the company to borrow in increments of $1,000 at the beginning of each month from a local bank. The interest rate on these loans is 1% per month, and interest is not compounded. The company, when able, repays the loan plus accumulated interest at the end of the quarter. Based on the budgets prepared earlier and the additional information above, complete the: a. Schedule of expected cash disbursements – merchandise purchases b. Schedule of expected cash disbursement –Selling and administrative expenses c. Cash budget Q4 Hello everyone! How do companies use responsibility centers? How are the managers of the responsibility centers held accountable? Anyone? Q5 Also, how are responsibility centers used to incentivize managers (of the centers)? Examples? Anyone? Q6 This topic makes me think whether managers of responsibility centers should be responsible only for costs that they can control? Or should they bear a "portion" of common costs...such as if the corporation owns an airplane? Should responsibility centers be charged an allocated amount for the upkeep and maintenance of this airplane even if the responsibility center managers do not use it? Anyone? :-) AIS Q1 Controlling inventory has evolved with the widespread use of technology. Describe one advance in technology that helps reduce theft or errors. What does your company use? Does this replace a physical inventory? Why or why not? Q2 Class: What is the role of the accountants in preventing and detecting the theft of cash? Q3 The Association of Certified Fraud Examiners does a good job at keeping its members well informed about fraud-related matters. You may check them out at www.acfe.com. Give a brief report on the website. Q4 Compare internal control issues between the invoice approval and payment process in a manual office with that of an automated office where all departments are connected to the same AIS. Is an ink pen signature more desirable than a digital approval? Why or why not? Q5 Class: What is the role of the AIS in safeguarding cash payment activities? Q6 I agree that there are many problems with signature identification. Class: In a theft investigation, does John Doe’s signature on a document mean that John Doe signed it?

Cost Acct

Q1

Why is budgeting important? Describe how you use budgeting in your personal life or in your company.

Q2

I was just thinking about this....would separation of duties be just as important in budgeting as it is in financial accounting reporting?? I mean, should the budgeting folks be the same as the folks that prepare "after the fact" financial statements?? I am wondering if there is any possibility of collusion here....your thoughts, anyone?

Q3     

B&B is a retailer of consumer goods. The company generates a gross margin of 25% of sales. Sales are 30% for cash and 70% on credit. Credit sales are collected in the month following sale, and accounts receivable on December 31, 2014 are the result of December credit sales. Actual and budgeted sales for the period were as follows:

December 2014(actual)

$150,000

January 2015

$160,000

February 2015

$152,000

March 2015

$162,000

April 2015

$140,000

The company plans for each month's ending inventory to be 30% of the following month's budgeted cost of goods sold. Half of a month's inventory purchases are paid for in the month of purchase; the other half are paid for in the month following purchase. The accounts payable on June 30 are the result of December, 2014 purchases of inventory.

 

Additional Information:


 

Account Balances as of December 31, 2015:

 Cash

$15,000

 Accounts receivable

$105,000

 Inventory

$48,000

Buildings and equipment, net

$220,000

Accounts payable

$45,000

Capital stock

$150,000

Retained earnings

$195,000

 

Questions:


1. Using the data above, for quarter ending March 2015, prepare the following:

a. The schedule of the expected cash collections

b. The merchandise purchases budget


Hi everyone, here is more information for B&B: All monthly expenses were paid monthly. Monthly expenses included: commissions, $20,000; rent, $15,200; other expenses (excluding depreciation), 10% of sales. Depreciation is $5,500 for the quarter and includes depreciation on new assets acquired during the quarter. The assets acquired for cash during the quarter included equipment of $15,000 in January and $10,000 in February. The company wishes to maintain a minimum cash balance of $20,000 at the end of January and February and $5,000 at the end of March. The company has a financing facility that allows the company to borrow in increments of $1,000 at the beginning of each month from a local bank. The interest rate on these loans is 1% per month, and interest is not compounded. The company, when able, repays the loan plus accumulated interest at the end of the quarter.

Based on the budgets prepared earlier and the additional information above, complete the:

a. Schedule of expected cash disbursements – merchandise purchases

b. Schedule of expected cash disbursement –Selling and administrative expenses

c. Cash budget

Q4

Hello everyone! How do companies use responsibility centers? How are the managers of the responsibility centers held accountable? Anyone?

Q5

Also, how are responsibility centers used to incentivize managers (of the centers)? Examples? Anyone?

Q6

This topic makes me think whether managers of responsibility centers should be responsible only for costs that they can control? Or should they bear a "portion" of common costs...such as if the corporation owns an airplane? Should responsibility centers be charged an allocated amount for the upkeep and maintenance of this airplane even if the responsibility center managers do not use it? Anyone? :-)



AIS

Q1

Controlling inventory has evolved with the widespread use of technology. Describe one advance in technology that helps reduce theft or errors. What does your company use? Does this replace a physical inventory? Why or why not?

Q2

Class: What is the role of the accountants in preventing and detecting the theft of cash?

Q3

The Association of Certified Fraud Examiners does a good job at keeping its members well informed about fraud-related matters. You may check them out at www.acfe.com. Give a brief report on the website.

Q4

Compare internal control issues between the invoice approval and payment process in a manual office with that of an automated office where all departments are connected to the same AIS. Is an ink pen signature more desirable than a digital approval? Why or why not?

Q5


Class: What is the role of the AIS in safeguarding cash payment activities?

Q6

I agree that there are many problems with signature identification.

Class: In a theft investigation, does John Doe’s signature on a document mean that John Doe signed it?