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CHAPTER 6
MASTER BUDGET AND RESPONSIBILITY ACCOUNTING
The Short-Answer Questions, Exercises, and Problems marked with can be found on MyLab:
Accounting. Students can practise them as often as they want, and most feature step-by-step guided
instructions to help find the right answer. Items marked with have Excel templates available on
MyLab for students to use.
SHORT-ANSWER QUESTIONS
6-1 The budgeting cycle includes the following elements:
a. Planning the performance of the organization as a whole and of its subunits. The entire
management team agrees as to what is expected.
b. Providing a frame of reference, a set of specific expectations against which the actual results
can be compared.
c. Investigating variations from the plans. If necessary, corrective action follows investigation.
d. Planning again, considering feedback and changed conditions.
6-2 A master budget is a single comprehensive document that combines information from
many individual budgeted statements. The term “master” refers to its being a comprehensive
organization-wide set of budgets that coordinates all financial projections for a set period of time.
6-3 Plans can and sometimes should be changed if the feedback indicates an assumption
used in the budget was wrong. If the feedback indicates the plan was reasonable, then it is
necessary to understand the issues preventing the achievement of the planned results and
implement an appropriate remedy.
6-4 Strategy, plans, and budgets are interrelated and affect one another. Strategy is a broad
term that usually means selection of overall objectives. Strategic analysis underlies both long-run
and short-run planning. In turn, these plans lead to the formulation of budgets. Budgets provide
feedback to managers about the likely effects of their strategic plans. Managers use this feedback
to revise their strategic plans.
6-5 Yes, budgeted performance is better than past performance for judging managers.
Why? Mainly because inefficiencies included in past results can be detected and eliminated in
budgeting. Also, new opportunities in the future, which did not exist in the past, may otherwise be
ignored if past performance is used.
6-6 A company that shares its own internal budget information with other companies can
gain multiple benefits. One benefit is better coordination with suppliers, which can reduce the
likelihood of supply shortages. Better coordination with customers can result in increased sales as
demand by customers is less likely to exceed supply. Better coordination across the whole supply
chain can also help a company reduce inventories and thus reduce the costs of holding inventories.
Suppliers and customers become “partners in profit.” Here satisfied customers sell the final product
to new customers.
Copyright © 2019 Pearson Canada Inc.

6-1
Instructor’s Solutions Manual for Cost Accounting, Eighth Canadian Edition
6-7 A rolling budget is a budget or plan that is always available for a specified future
period by adding a month, quarter, or year in the future as the month, quarter, or year just ended is
dropped. For example, a 12-month rolling budget for the March 2018 to February 2019 period
becomes a 12-month rolling budget for the April 2018 to March 2019 period the next month, and
so on.
6-8 The steps in preparing an operating budget are:

1. Prepare the revenue budget
2. Prepare the production budget (in units)
3. Prepare the direct materials usage budget and direct materials purchases budget
4. Prepare the direct manufacturing labour budget
5. Prepare the manufacturing overhead budget
6. Prepare the ending inventories budget
7. Prepare the cost of goods sold budget
8. Prepare the nonproduction costs budget
9. Prepare the budgeted operating income statement
6-9 The revenue budget is typically the cornerstone for budgeting because production (and
hence costs) and inventory levels generally depend on the forecasted level of demand and revenue.
6-10 Sensitivity analysis adds an extra dimension to budgeting. It enables managers to

examine how budgeted amounts change with changes in the underlying assumptions. This helps
managers to monitor those assumptions that are most critical to a company attaining its budget and
to make timely adjustments to plans when appropriate.
6-11 Padding is when budget figures are either inflated (in the case of expenses) or deflated
(in the case of revenues) in order to make it easier to achieve them during the actual operations of
the firm. This makes it easier for managers to meet their budget targets and earn performance
bonuses. Senior managers should look at outside (external) data to see if the internal budgets are
reasonable. Senior managers should also be familiar with the operations of the firms—this will
make it easier for them to spot unreasonable budget estimates.
6-12 Non-output-based cost drivers can be incorporated into budgeting by the use of
activity-based budgeting (ABB). ABB focuses on the budgeted cost of activities necessary to
produce and sell products and services. Non-output-based cost drivers, such as the number of part
numbers, number of batches, and number of new products, can be used with ABB.
6-13 The choice of a responsibility centre type guides the variables to be included in the
budgeting exercise. For example, if a revenue centre is chosen, the focus will be on variables that
assist in forecasting revenue. Factors related to, say, costs of the investment base will be
considered only if they assist in forecasting revenue.
6-14 Equal or across-the-board reductions is a strategy that penalizes honest business

functions and rewards those that pad the budgets. The strategy produces a perverse incentive,
rewarding the overstatement of budgeted costs and the understatement of budgeted revenue.

6-2
Chapter 6: Master Budget and Responsibility Accounting
EXERCISES
6-15 (10 min.) Terminology.
A cash cycle, also known as an operating cycle, is the movement of cash arising from business
functions to inventories, to receivables, and back to cash when outputs are sold. It is a self-
liquidating cycle where all costs of a corporation are recovered when output is sold. Budgetary
slack is the practice of underestimating revenue and overestimating costs to make budget
constraints less challenging. Once the corporate budget is produced, all managers make a
commitment to reach budget targets. They are responsible for controllable cost that must be at or
below the budget constraint during each reporting time period. Some companies produce a rolling
budget that adds a reporting time period as one is completed. An investment budget affects the flow
in and out of cash either to make the investment or to pay to finance it.
6-16 (15 min.) Responsibility and controllability.

1. (a) Salesperson
(b) VP of sales
Permit the salesperson to offer a reasonable discount to customers, but require that he/she
clear bigger discounts with the VP. Also, base his/her bonus/performance evaluation not just
on revenue generated, but also on margins (or, ability to meet budget).
2. (a) VP of sales
(b) VP of sales
VP of sales should compare budgeted sales with actuals, and ask for an analysis of all the sales
during the quarter. Discuss with salespeople why so many discounts are being offered—and if
they are really needed to close each sale. Are our prices too high (i.e., uncompetitive)?
3. (a) Manager, shipping department
(b) Manager or director of operations (including shipping)
The shipping department manager must report delays more regularly and request additional
capacity in a timely manner. Operations manager should ask for a review of shipping
capacity utilization, and consider expanding the department.
4. (a) HR department
(b) Production supervisor
The production supervisor should devise his or her own educational standards that all new
plant employees are held to before they are allowed to work on the plant floor. Offer
remedial in-plant training to those workers who show promise. Be very specific about the
types of skills required when using the HR department to hire plant workers. Test the
workers periodically for required skills.
5. (a) Production supervisor
Get feedback from the workers, analyze it, and act on it. Get extra coaching and training
from experienced mentors.
6. (a) Maintenance department
First, get the requisite maintenance done on the machines. Make sure that the maintenance
department head clearly understands the repercussions of poor maintenance. Discuss and
establish maintenance standards that must be met (frequency of maintenance and tolerance
limits, for example). Test and keep a log of the maintenance work.

6-3
6-17 (30 min.) Budgeting: direct material usage, manufacturing cost, and gross
margin.
1.
Direct Material Usage Budget in Quantity and Dollars
Material
Wool Dye Total
Physical Units Budget
Direct materials required for
Blue Rugs (100,000 rugs × 30 skeins and 0.5 L.) 3,000,0000 skeins 50,000 L.
Cost Budget
Available from beginning direct materials inventory
(under a FIFO cost-flow assumption)
Wool: 349,000 skeins $ 715,450
Dye: 5,000 litres $ 24,850
To be purchased this period
Wool: (3,000,000 - 349,000) skeins × $2 per skein 5,302,000
Dye: (50,000 – 5,000) L. × $5 per L. _________ 225,000
Direct materials to be used this period: (a) + (b) $6,017,450 $ 249,850 $6,267,300
2.
Weaving budgeted = $18,852,000
= $3.3664 per DMLH
overhead rate 5,600,000 DMLH
Dyeing budgeted = $12,809,000 = $28.4644 per MH

overhead rate 450,000 MH
3. Budgeted unit cost of blue rug

Input per
Cost per Unit of
Unit of Input Output Total
Wool $2 30 skeins $ 60.00
Dye 5 0.5 L. 2.50
Direct manufacturing
labour 15 56 hrs. 840.00
1
Dyeing overhead 28.4644 4.5 mach-hrs. 128.09
Weaving overhead 3.3664 56 DMLH 188.52
Total $1219.11
1
0.15 machine hour per skein  30 skeins per rug = 4.5 machine-hrs. per rug.
4. Revenue budget
Selling
Units Price Total Revenue
Blue Rugs 100,000 $2,000 $200,000,000
Blue Rugs 95,000 $2,000 $190,000,000

6-4
5a. Cost of goods sold budget

Sales = 100,000 rugs
From Schedule Total
Beginning finished goods inventory $ 0
Direct materials used $ 6,267,300
Direct manufacturing labour
($840 × 100,000) 84,000,000
Dyeing overhead ($128.09 × 100,000) 12,809,000
Weaving overhead ($188.52 × 100,000) 18,852,000 121,928,300
Cost of goods available for sale 121,928,300
Deduct ending finished goods inventory 0
Cost of goods sold $121,928,300
5b. Cost of Goods Sold Budget

Sales = 95,000 rugs
From Schedule Total
Direct manufacturing labour
($840 × 100,000) 84,000,000
Dyeing overhead
($128.09 × 100,000) 12,809,000
Weaving overhead
($188.52 × 100,000) 18,852,000 121,928,300
Deduct ending finished goods inventory
($1,219.11 × 5,000) 6,095,550
6.
100,000 rugs sold 95,000 rugs sold
Revenue $200,000,000 $190,000,000
Less: Cost of goods sold 121,928,300 115,832,750
Gross margin $ 78,071,700 $ 74,167,250

6-5
6-18 (15 min.) Sales budget, service setting.

1.
2018 At 2018 Expected 2019 Expected 2019
McGrath & Sons Volume Selling Prices Change in Volume Volume
Radon Tests 11,000 $250 +10% 12,100
Lead Tests 15,200 $200 -10% 13,680
McGrath & Sons Sales Budget
For the Year Ended December 31, 2019
Selling Price Units Sold Total Revenue
Radon Tests $250 12,100 $3,025,000
Lead Tests $200 13,680 2,736,000
$5,761,000
2.
2018 Planned 2019 Expected 2019 Expected 2019
McGrath & Sons Volume Selling Prices Change in Volume Volume
Radon Tests 11,000 $250 +10% 12,100
Lead Tests 15,200 $190 -5% 14,440
McGrath & Sons Sales Budget

For the Year Ended December 31, 2019
Selling Price Units Sold Total Revenue

Radon Tests $250 12,100 $3,025,000
Lead Tests $190 14,440 2,743,600
$5,768,600
Expected revenue at the new 2019 prices are greater than the expected 2018 revenue of
$5,623,500 if the prices are unchanged. So, if the goal is to maximize sales revenue and if
Jim McGrath’s forecasts are reliable, the company should lower its price for a lead test in
2019.
6-19 (5 min.) Sales and production budget.
Budgeted sales in units 135,000

Add target ending finished goods inventory 16,300
Total requirements 151,300
Deduct beginning finished goods inventory 9,700
Units to be produced 141,600

6-6
6-20 (5 min.) Direct materials budget.
Direct materials to be used in production (bottles) 2,100,000

Add target ending direct materials inventory (bottles) 55,000
Total requirements (bottles) 2,155,000
Deduct beginning direct materials inventory (bottles) 23,700
Direct materials to be purchased (bottles) 2,131,300
6-21 (10 min.) Budgeting material purchases.

Finished Goods
(units)
Budgeted sales 52,250
Direct Materials
(in litres)
Direct materials needed for production (54,350  3) 163,050
Add target ending direct materials inventory 110,000
Deduct beginning direct materials inventory 117,350
Direct materials to be purchased 155,700
6-22 (30 min.) Revenues and production budget.

1.
Selling Units Total
Price Sold Revenues
12-ounce bottles $0.30 6,000,000a $1,800,000
1-gallon units 1.60 1,560,000b 2,496,000
$4,296,000
a
500,000 × 12 months = 6,000,000
b
130,000 × 12 months = 1,560,000
2. Budgeted unit sales (12-ounce bottles) 6,000,000

Total requirements 6,660,000
Units to be produced 5,680,000

6-7
3. Beginning = Budgeted + Target  Budgeted

inventory sales ending inventory production
= 1,560,000 + 300,000  1,200,000
= 660,000 1-gallon units
6-23 (30 min.) Budgeting; direct material usage, manufacturing cost, and gross
margin.
1.
Material
Wool Dye Total
Blue Rugs (200,000 rugs × 36 skeins and 0.8 gal.) 7,200,000 skeins 160,000 gal.
Cost Budget
Available from beginning direct materials inventory:
(a)
Wool: 458,000 skeins $ 961,800
Dye: 4,000 gallons $ 23,680
To be purchased this period: (b)
Wool: (7,200,000 – 458,000) skeins × $2 per skein 13,484,000
Dye: (160,000 – 4,000) gal. × $6 per gal. 936,000
Direct materials to be used this period: (a) + (b) $14,445,800 $ 959,680 $15,405,480
2. Weaving budgeted = $31, 620, 000

= $2.55 per DMLH
overhead rate 12, 400, 000 DMLH
Dyeing budgeted = $17, 280, 000 = $12 per MH

overhead rate 1, 440, 000 MH

6-8
3.
Budgeted Unit Cost of Blue Rug
Input per
Cost per Unit of
Unit of Input Output Total
Wool $ 2 36 skeins $ 72.00
Dye 6 0.8 gal. 4.80
Direct manufacturing labour 13 62 hrs. 806.00
Dyeing overhead 12 7.21 mach-hrs. 86.40
Weaving overhead 2.55 62 DMLH 158.10
Total $1,127.30
1
0.2 machine hour per skein  36 skeins per rug = 7.2 machine-hrs. per rug.
4.
Revenue Budget
Selling
Units Price Total Revenues
Blue Rugs 200,000 $2,000 $400,000,000
Blue Rugs 185,000 $2,000 $370,000,000
5a.
Cost of Goods Sold Budget
From Schedule Total

Direct manufacturing labour ($806 × 200,000) 161,200,000
Dyeing overhead ($86.40 × 200,000) 17,280,000

6-9
5b.
Production = 200,000 rugs
From Schedule Total

Direct manufacturing labour ($806 ×
200,000) 161,200,000
Dyeing overhead ($86.40 × 200,000) 17,280,000
Deduct ending finished goods inventory
($1,127.30 × 15,000) 16,909,500
Some students assume that Xander will produce only 185,000 rugs to match 185,000 rugs that ar
expected to be sold and carry no finished good inventory of the rugs. In this case the Cost of
goods sold budget will be as follows. The Cost of Goods Sold budget is higher because the fixed
overhead costs in the dyeing and weaving cost pools do not get “inventoried” in the closing
inventory of rugs but are instead expensed in the current period.

Cost of Goods Sold Budget for Producing 185,000 rugs
From Schedule Total

Direct materials useda $ 14,253,480
Direct manufacturing labour ($806 × 185,000) 149,110,000
Variable dyeing overhead ($70.55b × 185,000) 13,051,750
Fixed dyeing overheadc 3,170,000
Variable weaving overhead ($119.15d × 185,000) 22,042750
Fixed weaving overheade 7,790,000 209,417,980
a
[$961,800 + (185,000 rugs×36 skeins−458,000)×$2] + [$23,680 + (185,000 rugs×0.8 gallons−4,000)×$6]
b
Variable dyeing overhead cost per rug = ($6,560,000 + $7,550,000) ÷ 200,000 rugs = $70.55 per rug
c
Fixed dyeing overhead costs = $347,000 + $2,100,000 + $723,000 = $3,170,000
d
Variable weaving overhead cost per rug = ($15,400,000 + $5,540,000 + $2,890,000) ÷ 200,000 rugs = $119.15 per rug
e
Fixed weaving overhead costs = $1,700,000 + $274,000 + $5,816,000 = $7,790,000

6-10
6.
185,000 rugs sold 185,000 rugs sold
200,000 rugs sold 200,000 rugs produced 185,000 rugs produced
Revenue $400,000,000 $370,000,000 $370,000,000
Less: Cost of goods sold 225,505,480 208,595,980 209,417,980
Gross margin $174,494,520 $161,404,020 $160,582,020
7. If sales drop to 185,000 blue rugs, Xander should look to reduce fixed costs and produce
less to reduce variable costs and inventory costs.
8. Top management can look for ways to increase (stretch) sales and improve quality,
efficiency, and input prices to reduce costs in each cost category such as direct materials, direct
manufacturing labour, and overhead costs. Top management can also use the budget to
coordinate and communicate across different parts of the organization, create a framework for
judging performance and facilitating learning, and motivate managers and employees to achieve
“stretch” targets of higher revenues and lower costs.
6-24 (15-20 min.) Revenue, production, and purchases budget.
1. 985,000 motorcycles  505,000 yen = 497,425,000,000 yen
2. Budgeted sales (units) 985,000

3. Direct materials to be used in production, 948,000  2 1,896,000

Add target ending direct materials inventory 28,000
Deduct beginning direct materials inventory 19,000
Direct materials to be purchased 1,905,000
Cost per wheel in yen 21,300
Direct materials purchase cost in yen 40,576,500,000
Note the relatively small inventory of wheels. In Japan, suppliers tend to be located very
close to the major manufacturer. Inventories are controlled by just-in-time (JIT) and similar
systems. Indeed, some direct materials inventories are almost nonexistent.

6-11
6-25 (15-25 min.) Budgets for production and direct manufacturing labour.
All Frame Company
Budget for Production and Direct Manufacturing Labour
For the Quarter Ended March 31, 2019
January February March Quarter
Budgeted sales (units) 10,000 12,000 8,000 30,000
Add target ending finished goods inventory* (units) 16,000 12,500 13,500 13,500
Total requirements (units) 26,000 24,500 21,500 43,500
Deduct beginning finished goods inventory (units) 16,000 16,000 12,500 16,000
Units to be produced 10,000 8,500 9,000 27,500
Direct manufacturing labour-hours (DMLH) per unit  2.0  2.0  1.5
Total hours of direct manufacturing labour time needed 20,000 17,000 13,500 50,500
Direct manufacturing labour costs:
Wages ($10.00 per DMLH) $200,000 $170,000 $135,000 $505,000
Pension contributions ($0.50 per DMLH) 10,000 8,500 6,750 25,250
Workers’ compensation insurance ($0.15 per DMLH) 3,000 2,550 2,025 7,575
Employee medical insurance ($0.40 per DMLH) 8,000 6,800 5,400 20,200
Employment insurance (employer’s share)
($10.00  0.075 = $0.75 per DMLH) 15,000 12,750 10,125 37,875
Total direct manufacturing labour costs $236,000 $200,600 $159,300 $595,900
*100% of the first following month’s sales plus 50% of the second following month’s sales.
Note that the employee employment insurance levy of 7.5% is irrelevant. Such taxes are withheld from employees’ wages and paid to the
government by the employer on behalf of the employees; therefore, the employee 7.5% amounts are not additional costs to the employer.

6-12
6-26 (30 min.) Cash flow analysis.

1. The cash that TabComp Inc. can expect to collect during April 2019 is calculated below:
April cash receipts:
April cash sales ($400,000  .25) $100,000
April credit card sales ($400,000  .30  .96) 115,200
Collections on account:
March ($480,000  .45  .70) 151,200
February ($500,000  .45  .28) 63,000
January (uncollectable–not relevant) 0
Total collections $429,400
2. a. The projected number of the MZB-33 computer hardware units that TabComp Inc.
will order on January 25, 2019, is calculated as follows.
MZB-33
Units
March sales 110
Plus: Ending inventorya 27
Total needed 137
Less: Beginning inventoryb 33
Projected purchases in units 104
a
0.30  90 unit sales in April
b
0.30  110 unit sales in March
b.
Selling price = $2,025,000  675 units, or for March, $330,000 110 units
= $3,000 per unit
Purchase price per unit, 70%  $3,000 $ 2,100
Projected unit purchases × 104
Total MZB-33 purchases, $1,800  104 $218,400
3. Monthly cash budgets are prepared by companies such as TabComp Inc. in order to plan
for their cash needs. This means identifying when both excess cash and cash shortages may
occur. A company needs to know when cash shortages will occur so that prior
arrangements can be made with lending institutions in order to have cash available for
borrowing when the company needs it. At the same time, a company should be aware of
when there will be excess cash available for investment or for repaying loans.

6-13
6-27 (20-30 min.) Activity-based budgeting.
1.
Cost Soft Fresh Packaged
Activity Hierarchy Drinks Produce Food Total
Ordering
$90  14; 24; 14 Batch-level $1,260 $ 2,160 $1,260 $ 4,680
Delivery
$82  12; 62; 19 Batch-level 984 5,084 1,558 7,626
Shelf-stocking
$21  16; 172; 94 Output-unit-level 336 3,612 1,974 5,922
Customer support
$0.18  4,600; 34,200; 10,750 Output-unit-level 828 6,156 1,935 8,919
Total budgeted indirect costs $3,408 $17,012 $6,727 $27,147
Percentage of total indirect costs 13% 63% 25%

(subject to rounding)
2. Refer to the last row of the table in requirement 1. Fresh produce, which probably
represents the smallest portion of COGS, is the product category that consumes the
largest share (63%) of the indirect resources. Fresh produce demands the highest level of
ordering, delivery, shelf-stocking, and customer support resources of all three product
categories—it has to be ordered, delivered, and stocked in small, perishable batches, and
supermarket customers often ask for a lot of guidance on fresh produce items.
3. An ABB approach recognizes how different products require different mixes of support
activities. The relative percentage of how each product area uses the cost driver at each
activity area is:

Ordering Batch-level 27% 46% 27% 100%
Delivery Batch-level 13 67 20 100
Shelf-stocking Output-unit-level 6 61 33 100
Customer support Output-unit-level 9 69 22 100
By recognizing these differences, YM managers are better able to budget for different
unit sales levels and different mixes of individual product-line items sold. Using a single
cost driver (such as COGS) assumes homogeneity in the use of indirect costs (support
activities) across product lines which does not occur at YM. Other benefits cited by
managers include: (1) better identification of resource needs, (2) clearer linking of costs
with staff responsibilities, and (3) identification of budgetary slack.

6-14
6-28 (20–30 min.) Kaizen approach to activity-based budgeting (continuation of 6-27).

1.
Budgeted Cost-Driver Rates
Activity Cost Hierarchy January February March
Ordering Batch-level $90.00 $89.82 $89.64
Delivery Batch-level 82.00 81.84 81.67
Shelf-stocking Output-unit-level 21.00 20.96 20.92
Customer support Output-unit-level 0.18 0.18 0.179
The March 2019 rates can be used to compute the total budgeted cost for each activity
area in March 2019:

Ordering Batch-level
$89.64  14; 24; 14
Delivery Batch-level $1,255 $2,151 $1,255 $4,661
$81.67  12; 62; 19
Shelf-stocking Output-unit- 980 5,064 1,552 7,596
$20.92  16; 172; level
94 Output-unit- 335 3,598 1,966 5,899
Customer support level
$0.179  4,600;
34,200; 10,750 823 6,122 1,924 8,869
Total $3,393 $16,935 $6,697 $27,025
2. A kaizen budgeting approach signals management’s commitment to systematic cost

reduction. Compare the budgeted costs from Exercises 6-27 and 6-28.
Shelf- Customer
Ordering Delivery Stocking Support
Exercise 6-27 $4,680 $7,626 $5,922 $8,919
Exercise 6-28 (Kaizen) 4,661 7,596 5,899 8,869
The kaizen budget number will show unfavourable variances for managers whose
activities do not meet the required monthly cost reductions. This likely will put more
pressure on managers to creatively seek out cost reductions by working “smarter” within
YM or by having “better” interactions with suppliers or customers.
One limitation of kaizen budgeting, as illustrated in this question, is that it
assumes small incremental improvements each month. It is possible that some cost
improvements arise from large discontinuous changes in operating processes, supplier
networks, or customer interactions. Companies need to highlight the importance of
seeking these large discontinuous improvements as well as the small incremental
improvements.

6-15
PROBLEMS
6-29 (30–40 min.) Revenue and production budgets.
This is a routine budgeting problem. The key to its solution is to compute the correct quantities of
finished goods and direct materials. Use the following general formula:
 Budgeted   Target   Budgeted 

       Beginning 
 production 
  ending 
  sales or  _  inventory 
 or purchases   inventory   materials used   
     
1. Fraser Corporation
Revenue Budget
For 2019
Units Price Total

Widget 60,000 $198 $ 11,880,000
Thingamajig 40,000 300 12,000,000
Projected sales $23,880,000
Production Budget (in units)
For 2019
Widget Thingamajig
Budgeted sales in units 60,000 40,000
Add target finished goods inventories,
December 31, 2019 27,000 11,000
Total requirements 87,000 51,000
Deduct finished goods inventories,
January 1, 2019 22,000 10,000
Units to be produced 65,000 41,000

6-16
Direct Materials Purchases Budget (in quantities) for 2019
Direct Materials
A B C
Direct materials to be used in production
• Widget (budgeted production of 65,000
units times 4 kg of A, 2 kg of B) 260,000 130,000 —
• Thingamajig (budgeted production of 41,000
units times 5 kg of A, 3 kg of B, 1 unit of C) 205,000 123,000 41,000
Total 465,000 253,000 41,000
Add target ending inventories, December 31, 2019 36,000 32,000 7,000
Total requirements in quantities 501,000 285,000 48,000
Deduct beginning inventories, January 1, 2019 32,000 29,000 6,000
Direct materials to be purchased (quantities) 469,000 256,000 42,000
Direct Materials Purchases Budget (in dollars) for 2019
Budgeted Expected
Purchases Purchase
(Quantities) Price per Unit Total
Direct material A 469,000 $14 $6,566,000
Direct material B 256,000 7 1,792,000
Direct material C 42,000 5 210,000
Budgeted purchases $8,568,000
Direct Manufacturing Labour Budget for 2019
Direct
Budgeted Manufacturing Rate
Production Labour-Hours Total per
(Units) per Unit Hours Hour Total
Widget 65,000 2 130,000 $15 $1,950,000
Thingamajig 41,000 3 123,000 19 2,337,000
Total $4,287,000

6-17
Budgeted Finished Goods Inventory
At December 31, 2019
Widget:
Direct materials costs:
A, 4 kilograms at $14 $56
B, 2 kilograms at $7 14 $70
Direct manufacturing labour costs, 2 hours at $15 30
Manufacturing overhead costs at $24 per direct
manufacturing labour-hour (2 hours) 48
Budgeted manufacturing costs per unit $148
Finished goods inventory of Widget

$148  27,000 units $3,996,000
Thingamajig:
A, 5 kilograms at $14 $70
B, 3 kilograms at $7 21
C, 1 each at $5 5 $96
Direct manufacturing labour costs, 3 hours at $19 57
manufacturing labour-hour (3 hours) 72
Finished goods inventory of Thingamajig

$225  11,000 units 2,475,000
Budgeted finished goods inventory, December 31, 2019 $6,471,000

6-18
6-30 (30 min.) Budgeted income statement.
Easecom Company
Budgeted Operating Income Statement for 2019
(in thousands)
Revenue
Equipment ($6,000 × 1.06 × 1.15) $7,314
Maintenance contracts ($1,800 × 1.06) 1,908
Total revenue $9,222
Cost of goods sold ($4,600 × 1.03 × 1.06) 5,022
Gross margin 4,200
Operating costs:
Marketing costs ($600 + $250) 850
Distribution costs ($150 × 1.06) 159
Customer maintenance costs ($1,000 + $130) 1,130
Administrative costs 900
Total operating costs 3,039
Operating income $ 1,161
6-31 (40 min.) Budget schedules for a manufacturer.

1a. Revenues Budget
Broncos Rams
Blankets Blankets Total
Units sold 140 195
Selling price $305 $378
Budgeted revenues $42,700 $73,710 $116,410
b. Production Budget in Units

Broncos Rams
Blankets Blankets
Budgeted unit sales 140 195
Add budgeted ending fin. goods inventory 24 29
Total requirements 164 224
Deduct beginning fin. goods inventory 14 19
Budgeted production 150 205

6-19
c. Direct Materials Usage Budget (units)

Red Black Broncos logo Rams logo
wool wool patches patches Total
Broncos blankets:
1. Budgeted input per f.g. unit 5 – 1 –
2. Budgeted production 150 – 150 –
3. Budgeted usage (1 × 2) 750 – 150 –
Rams blankets:
4. Budgeted input per f.g. unit – 6 – 1
5. Budgeted production – 205 – 205
6. Budgeted usage (4 × 5) – 1,230 – 205
7. Total direct materials
usage (3 + 6) 750 1,230 150 205
Direct Materials Cost Budget

8. Beginning inventory 40 20 50 65
9. Unit price (FIFO) $ 10 $ 14 $ 8 $ 7
10. Cost of DM used from
beginning inventory (8 × 9) $ 400 $ 280 $ 400 $ 455 $ 1,535
11. Materials to be used from
purchases (7 – 8) 710 1,210 100 140
12. Cost of DM in March $ 11 $ 13 $ 8 $ 9
13. Cost of DM purchased and
used in March (11 × 12) $7,810 $15,730 $ 800 $1,260 $26,600
14. Direct materials to be used
(10 + 13) $8,210 $16,010 $1,200 $1,715 $27,135
Direct Materials Purchases Budget

Black Bronco Rams
Red wool wool s logos logos Total
Budgeted usage
(from line 7) 750 1,230 150 205
Add target ending
inventory 30 20 30 30
Total requirements 780 1,260 180 235
Deduct beginning inventory 40 20 50 65
Total DM purchases 740 1,240 130 170
Purchase price (March) $ 11 $ 13 $ 8 $ 9
Total purchases $8,140 $16,120 $1,040 $1,530 $26,830
d. Direct Manufacturing Labour Budget

Direct
Budgeted Manuf. Labour-
Units Hours per Total Hourly
Produced Output Unit Hours Rate Total
Broncos blankets 150 4 600 $28 $16,800
Rams blankets 205 5 1,025 $28 28,700
1,625 $45,500

6-20
e. Manufacturing Overhead Budget
Variable manufacturing overhead costs (1,625 × $17) $27,625

Fixed manufacturing overhead costs 14,625
Total manufacturing overhead costs $42,250
Total manuf. overhead cost per hour = $42,250 ÷ 1,625 = $26 per direct manufacturing
labour-hour
Fixed manuf. overhead cost per hour = $ 14,625 ÷ 1,625 = $9 per direct manufacturing
labour-hour
f. Computation of unit costs of ending inventory of finished goods

Broncos Rams
Blankets Blankets
Direct materials
Red wool ($11 × 5, 0) $ 55 $ 0
Black wool ($13 × 0, 6) 0 78
Broncos logos ($8 × 1, 0) 8 0
Rams logos ($9 × 0, 1) 0 9
Direct manufacturing labour ($28 × 4, 5) 112 140
Manufacturing overhead
Variable ($17 × 4, 5) 68 85
Fixed ($9 × 4, 5) 36 45
Total manufacturing cost $279 $357
Ending Inventories Budget
Cost per Unit Units Total
Direct Materials
Red wool $ 11 30 $ 330
Black wool 13 20 260
Broncos logo patches 8 30 240
Rams logo patches 9 30 270
1,100
Finished Goods
Broncos blankets 279 24 6,696
Rams blankets 357 29 10,353
17,049
Total $18,149
g. Cost of goods sold budget

Beginning fin. goods inventory, March 1, 2017 ($1,960 + $2,945) $ 4,905
Direct materials used (from Dir. materials cost budget) $27,135
Direct manufacturing labour (Dir. manuf. labour budget) 45,500
Manufacturing overhead (Manuf. overhead budget) 42,250
Cost of goods manufactured 114,885
Cost of goods available for sale 119,790
Deduct ending fin. goods inventory, March 31, 2014 (Inventories budget) 17,049
Cost of goods sold $102,741

6-21
2. Areas where continuous improvement might be incorporated into the budgeting process:
(a) Direct materials. Either an improvement in usage or price could be budgeted. For
example, the budgeted usage amounts for the fabric could be related to the maximum
improvement (current usage – minimum possible usage) of yards of fabric for either
blanket. It may also be feasible to decrease the price paid, particularly with quantity
discounts on things like the logo patches.
(b) Direct manufacturing labour. The budgeted usage of 4 hours/5 hours could be
continuously revised on a monthly basis. Similarly, the manufacturing labour cost per
hour of $28 could be continuously revised down. The former appears more feasible
than the latter.
(c) Variable manufacturing overhead. By budgeting more efficient use of the allocation
base, a signal is given for continuous improvement. A second approach is to budget
continuous improvement in the budgeted variable overhead cost per unit of the
allocation base.
(d) Fixed manufacturing overhead. The approach here is to budget for reductions in the
year-to-year amounts of fixed overhead. If these costs are appropriately classified as
fixed, then they are more difficult to adjust down on a monthly basis.
6-32 (30–40 min.) Revenue and production budgets.
This is a routine budgeting problem. The key to its solution is to compute the correct quantities
of finished goods and direct materials. Use the following general formula:
 Budgeted   inventory   materials used   inventory 

production = Target ending + Budgeted sales or – Beginning
or purchases
1. Chen Corporation
Revenues Budget for 2017
Units Price Total

Thingone 69,000 $160 $11,040,000
Thingtwo 44,000 258 11,352,000
Budgeted revenues $22,392,000
2. The CEO would want to probe if the revenue budget is sufficiently stretched. Is the
revenue growing faster than the market? Should the company increase marketing and advertising
spending to grow sales? Would increasing the sales force or giving salespersons stronger
incentives result in higher sales?

6-22
3. Chen Corporation
Production Budget (in units) for 2017
Thingone Thingtwo
Budgeted sales in units 69,000 44,000
Add target finished goods inventories,
December 31, 2017 29,000 8,000
Deduct finished goods inventories,
January 1, 2017 24,000 7,000
Units to be produced 74,000 45,000
4. Chen Corporation
Direct Materials Purchases Budget (in quantities) for 2017
Direct Materials
A B C
Direct materials to be used in production
• Thingone (budgeted production of 74,000
units times 6 lbs. of A, 4 lbs. of B) 444,000 296,000 --
• Thingtwo (budgeted production of 45,000
units times 7 lbs. of A, 5 lbs. of B, 3 lb. of C) 315,000 225,000 135,000
Total 759,000 521,000 135,000
Add target ending inventories, December 31, 2017 38,000 34,000 12,000
Total requirements in units 797,000 555,000 147,000
Deduct beginning inventories, January 1, 2017 36,000 31,000 9,000
Direct materials to be purchased (units) 761,000 524,000 138,000
5. Chen Corporation
Direct Materials Purchases Budget (in dollars) for 2017
Budgeted Expected
Purchases Purchase
(Units) Price per unit Total
Direct material A 761,000 $13 $ 9,893,000
Direct material B 524,000 8 4,192,000
Direct material C 138,000 7 966,000
Budgeted purchases $15,051,000
6. Chen Corporation
Direct Manufacturing Labour Budget (in dollars) for 2017
Direct
Budgeted Manufacturing Rate
Production Labour-Hours Total per
(Units) per Unit Hours Hour Total
Thingone 74,000 4 296,000 $13 $3,848,000
Thingtwo 45,000 5 225,000 18 4,050,000
Total $7,898,000

6-23
7. Chen Corporation
Budgeted Finished Goods Inventory
at December 31, 2017
Thingone:
A, 6 pounds × $13 $78
B, 4 pounds × $8 32 $110
Direct manufacturing labour costs,
4 hours × $13 52
manufacturing labour-hour (4 hours × $24) 96
Finished goods inventory of Thingone
$258 × 29,000 units $ 7,482,000
Thingtwo:
A, 7 pounds × $13 $91
B, 5 pounds × $8 40
C, 3 each × $7 21 $152
Direct manufacturing labour costs,
5 hours × $18 90
manufacturing labour-hour (5 hours × $24) 120
Finished goods inventory of Thingtwo
$362 × 8,000 units 2,896,000
Budgeted finished goods inventory, December 31, 2017 $10,378,000
8. The CEO would want to ask the production manager why the target ending inventories
have increased. Could production be more closely tailored to demand? Could the efficiency and
productivity of direct materials and direct manufacturing labour be increased? Could direct
materials inventory be reduced?
9. Preparing a budget helps Chen Corporation manage costs based on revenues and
production needs, look for opportunities to increase efficiencies, reduce costs, particularly in
areas where costs are high, coordinate and communicate across different parts of the
organization, create a framework for judging performance and facilitating learning, and motivate
managers and employees to achieve “stretch” targets of higher revenues and lower costs.

6-24
6-33 (60 min.) Comprehensive operating budget.

1. Schedule 1: Revenues Budget for January 2018
Units Selling Price Total Revenues
Snowboards 2,900 $650 $1,885,000
2. Schedule 2: Production Budget (in Units) for January 2018

Snowboards
Budgeted unit sales (Schedule 1) 2,900
Add target ending finished goods inventory 200
Deduct beginning finished goods inventory 500
3. Schedule 3A: Direct Materials Usage Budget for January 2018

Wood Fiberglass Total
Wood: 2,600 × 9 b.f. 23,400
Fiberglass: 2,600 × 10 yards _______ 26,000
To be used in production 23,400 26,000
Cost Budget
Available from beginning inventory
Wood: 2,040 b.f. × $32.00 $ 65,280
Fiberglass: 1,040 b.f. × $8.00 $ 8,320
To be used from purchases this period
Wood: (23,400 – 2,040) × $34.00 726,240
Fiberglass: (26,000 – 1,040) × $9.00 _______ 224,640
Total cost of direct materials to be used $791,520 $232,960 $1,024,480
Schedule 3B: Direct Materials Purchases Budget for January 2018

Wood Fiberglass Total
Production usage (from Schedule 3A) 23,400 26,000
Add target ending inventory 1,540 2,040
Deduct beginning inventory 2,040 1,040
Purchases 22,900 27,000
Cost Budget
Wood: 22,900 × $34.00 $778,600
Fiberglass: 27,000 × $9.00 ________ $243,000
Purchases $778,600 $243,000 $1,021,600

6-25
4. Schedule 4: Direct Manufacturing Labour Budget for January 2018
Cost Driver DML Hours per Total Wage

Labour Category Units Driver Unit Hours Rate Total
Manufacturing labour 2,600 5.00 13,000 $29.00 $377,000
5. Schedule 5: Manufacturing Overhead Budget for January 2018

At Budgeted Level of 13,000
Direct Manufacturing Labour-Hours
Variable manufacturing overhead costs
($7.00 × 13,000) $ 91,000
Fixed manufacturing overhead costs 81,000
Total manufacturing overhead costs $172,000
$172,000
6. Budgeted manufacturing overhead rate: = $13.23 per hour
13,000
$172,000
7. Budgeted manufacturing overhead cost per output unit: = $66 per output unit
2,600
(rounded)
8. Schedule 6A: Computation of Unit Costs of Manufacturing Finished Goods in January 2018
Cost per
Unit of
Inputa Inputsb Total
Direct materials
Wood $34.00 9.00 $306.00
Fiberglass 9.00 10.00 90.00
Direct manufacturing labour 29.00 5.00 145.00
Total manufacturing overhead 66.00
$607.00
a
Cost is per board foot, yard, or per hour
b
Inputs is the amount of each input per board
9. Schedule 6B: Ending Inventories Budget, January 31, 2018
Cost per
Units Unit Total
Direct materials
Wood 1,540 $ 34.00 $ 52,360
Fiberglass 2,040 9.00 18,360
Finished goods
Snowboards 200 607.00 121,400
Total Ending Inventory $192,120

6-26
10. Schedule 7: Cost of Goods Sold Budget for January 2018

From
Schedule Total
Beginning finished goods inventory
January 1, 2018, $374.80 × 500 Given $ 187,400
Direct materials used 3A $1,024,480
Direct manufacturing labour 4 377,000
Manufacturing overhead 5 172,000
Cost of goods manufactured 1,573,480
Deduct ending finished goods
inventory, January 31, 2018 6B 121,400
11. Budgeted Income Statement for Skulas for January 2018

Revenues Schedule 1 $1,885,000
Cost of goods sold Schedule 7 1,639,480
Gross margin 245,520
Operating costs
Variable marketing costs ($250 × 38) $ 9,500
Fixed nonmanufacturing costs 35,000 44,500
12. The CEO would want to probe if the revenue budget is sufficiently stretched. Is the
revenue growing faster than the market? Should the company increase marketing and advertising
spending to grow sales? Would increasing the sales force or giving salespersons stronger
incentives result in higher sales?
The CEO would want to ask the production manager if production could be more closely
tailored to demand? Could the efficiency and productivity of direct materials and direct
manufacturing labour be increased? Could direct materials inventory be reduced?
The CEO should set stretch targets that are challenging but achievable because creating
some performance anxiety motivates employees to exert extra effort and attain better
performance. A major rationale for stretch targets is the psychological motivation that comes
from loss aversion—people feel the pain of loss more than the joy of success. Setting challenging
targets motivates employees to reach these targets because failing to achieve a target is seen as
failing. At no point should the pressure for performance push employees to engage in illegal or
unethical practices. So, while setting stretch targets, the CEO must place great emphasis on
adhering to codes of conduct and following appropriate norms and values. The CEO should also
not set targets that are very difficult or impossible to achieve. Such targets demotivate employees
because they give up on trying to achieve them.
13. Preparing a budget helps Skulas manage costs based on revenues and production needs,
look for opportunities to increase efficiencies, reduce costs, particularly in areas where costs are
high, coordinate and communicate across different parts of the organization, create a framework
for judging performance and facilitating learning, and motivate management and employees to
achieve “stretch” targets of higher revenues and lower costs.

6-27
6-34 (30 min.) Cash budgeting, budgeted balance sheet. (Appendix)

1.
Cash Collections from Receivables

From sales in:
December (60%  $1,650,000) $ 990,000
January (40%  $1,885,000) 754,000
Total $1,744,000
Cash Disbursements for Material Purchases
For purchases in:

December (50% × $820,000) $410,000
January (50% × $1,021,600a) 510,800
Total $920,800
a
6-34, Schedule 3B
Cash Disbursements for Fixed Overhead Costs

Fixed manufacturing overhead ($81,000b – $64,000) $17,000
Fixed nonmanufacturing overhead ($35,000c – $10,000) 25,000
Total $42,000
b
6-34, Schedule 5
c
6-34, Budgeted Income Statement
Cash Budget for January 2018
Beginning cash balance $ 124,000
Add receipts: Collection of receivables 1,744,000

Total cash available $1,868,000
Deduct disbursements:
Material purchases $ 920,800
Direct manufacturing labour 377,000
Variable manufacturing overhead 91,000
Fixed manufacturing overhead 17,000
Variable marketing costs 9,500
Fixed nonmanufacturing costs 25,000
Cash dividends 160,000
Total disbursements 1,600,300
Ending cash balance $ 267,700

6-28
2. Yes. Skulas has a budgeted cash balance of $267,700 on January 31, 2018, after paying the
dividend of $160,000 at the end of January.
3. Skulas’ managers prepare a cash budget in addition to the operating income budget to plan
cash flows to ensure that the company has adequate cash to pay vendors, meet payroll, and pay
operating expenses as these payments come due. Skulas could be very profitable on an accrual
accounting basis, but the pattern of cash receipts from revenues might be delayed and result in
insufficient cash being available to make scheduled payments for its expenses. Skulas’ managers
may then need to initiate a plan to borrow money to finance any shortfall. Building a profitable
operating plan does not guarantee that adequate cash will be available, so Skulas’ managers need
to prepare a cash budget in addition to an operating income budget.
4. Budgeted Balance Sheet for Skulas as of January 31, 2018

Cash $ 267,700
Accounts receivable (60% × $1,885,000) 1,131,000
Inventory 6-34 Schedule 6B 192,120
Property, plant, and equipment (net) 1,175,600
Total assets $2,766,420
Accounts Payable $ 510,800

Long-term liabilities 182,000
Stockholders’ equity 2,073,620
Total liabilities and stockholders’ equity $2,766,420
6-35 (60 min.) Comprehensive problem with ABC costing.

1.
Revenue Budget
For the Month of April
Units Selling Price Total Revenue

Cat-allac 500 $160 $ 80,000
Dog-eriffic 300 250 75,000
Total $155,000
2.
Production Budget
Product
Cat-allac Dog-eriffic
Add target ending finished goods inventory 35 15
Total required units 535 315
Deduct beginning finished goods inventory 15 30
Units of finished goods to be produced 520 285

6-29
3a.

Material
Plastic Metal Total
Cat-allac (520 units × 4 kg and 0.5 kg) 2,080 kg 260 kg
Dog-errific (285 units × 6 kg and 1 kg) 1,710 kg 285 kg
Total quantity of direct materials to be used 3,790 kg 545 kg
Cost Budget
Plastic: 250 kg × $3.80/kg $ 950
Metal: 60 kg × $3/kg $ 180
Plastic: (3,790 – 250) kg  $4/kg 14,160
Metal: (545 – 60) kg  $3/kg __ ____ 1,455
Direct materials to be used this period $15,110 $ 1,635 $16,745
3b.
Direct Material Purchases Budget
Material
Plastic Metal Total
To be used in production (requirement 3) 3,790 kg 545 kg
Add target ending inventory 380 kg 55 kg
Total requirements 4,170 kg 600 kg
Deduct beginning inventory 250 kg 60 kg
Purchases to be made 3,920 kg 540 kg
Cost Budget
Plastic: 3,920 kg  $4 $15,680
Metal: 540 kg  $3 ______ $ 1,620
Purchases $15,680 $ 1,620 $ 17,300
4.
Direct Manufacturing Labour Costs Budget
Output Units
Produced DMLH Total Hourly Wage
(requirement 2) per Unit Hours Rate Total
Cat-allac 520 3 1,560 $10 $15,600
Dog-errific 285 5 1,425 10 14,250
Total $29,850

6-30
5. Machine Setup Overhead

Cat-allac Dog-errific Total
Units to be produced 520 285
Units per batch ÷ 20 ÷15
Number of batches 26 19
Setup time per batch  1.5 hrs.  1.75 hrs.
Total setup time 39 hrs. 33.25 hrs. 72.25 hrs.
Budgeted machine setup costs = $100 per setup hour  72.25 hours
= $7,225
Processing Overhead
Budgeted machine-hours (MH)
= (10 MH per unit × 520 units) + (18 MH per unit × 285 units)
= 5,200 MH + 5,130 MH = 10,330 MH
Budgeted processing costs
= $5 per MH × 10,330 MH
= $51,650
Inspection Overhead
Budgeted inspection hours
= (0.5  26 batches) + (0.6  19 batches)
= 13 + 11.4 = 24.4 inspection hrs.
Budgeted inspection costs
= $16 per inspection hr.  24.4 inspection hours
= $390.40
Manufacturing Overhead Budget
Machine setup costs $ 7,225
Processing costs 51,650
Inspection costs 390
Total costs $59,265

6-31
6.
Unit Costs of Ending Finished Goods Inventory
April 30
Product
Cat-allac Dog-errific
Cost per Input per Input per
Unit of Unit of
Input Output Total Unit of Output Total
Plastic $ 4 4 kg $ 16.00 6 kg $ 24.00
Metal 3 0.5 kg 1.50 1 kg 3.00
Direct manufacturing labour 10 3 hrs. 30.00 5 hrs. 50.00
Machine setup 100 0.075 hrs. 1 7.50 0.1167 hr1 11.67
Processing 5 10 MH 50.00 18 MH 90.00
Inspection 16 0.025 hr2 0.40 0.04 hr.2 0.64
Total $105.40 $179.31
1
39 setup hours ÷ 520 units = 0.075 hours per unit; 33.25 setup hours ÷ 285 units = 0.1167 hours per unit
2
13 inspection hours ÷ 520 units = 0.025 hours per unit; 11.4 inspection hours ÷ 285 units = 0.04 hours per
unit

April 30
Quantity Cost per Unit Total

Direct Materials
Plastic 380 $4 $1,520
Metals 55 3 165 $1,685
Finished goods
Cat-allac 35 $105.40 $3,689
Dog-errific 15 179.31 2,690 6,379
Total ending inventory $8,064
7.
Beginning finished goods inventory, April, 1 ($1,500 + $5,580) $ 7,080
Direct materials used (requirement 3) $16,745
Direct manufacturing labour (requirement 4) 29,850
Manufacturing overhead (requirement 5) 59,265
Deduct: Ending finished goods inventory, April 30 (reqmt. 6) 6,379
8.
Nonmanufacturing Costs Budget
Salaries ($36,000 ÷ 2  1.05) $18,900
Other fixed costs ($36,000 ÷ 2) 18,000
Sales commissions ($155,000  1%) 1,550
Total nonmanufacturing costs $38,450

6-32
9.
Budgeted Operating Income Statement
Revenue $155,000
Cost of goods sold 106,561
Gross margin 48,439
Operating (nonmanufacturing) costs 38,450
6-36 (25 min.) Cash budget (continuation of 6-35).

Cash Budget
April 30
Cash balance, April 1 $ 5,360
Add receipts
Cash sales ($155,000 × 10%) 15,500
Credit card sales ($155,000 × 90% × 97%) 135,315
Total cash available for needs (x) $156,175
Deduct cash disbursements
Direct materials ($8,500 + ($17,300 × 50%)) $ 17,150
Manufacturing overhead ($59,265 – $20,000 depreciation) 39,265
Nonmanufacturing salaries 18,900
Sales commissions 1,550
Other nonmanufacturing fixed costs ($18,000 – $10,000 deprn) 8,000
Machinery purchase 13,700
Income taxes 5,000
Total disbursements (y) $133,415
Financing
Repayment of loan $ 2,000
1 20
Interest at 12% ($2,000  12%  )
12
Total effects of financing (z) $ 2,020
Ending cash balance, April 30 (x) ─ (y) ─ (z) $ 20,740
6-37 (15 min.) Responsibility and controllability.

The time lost in the plant should be charged to the purchasing department. Certainly, the
plant manager could not be asked to underwrite a loss which is due to failure of delivery
over which he had no supervision. Although the purchasing agent may feel that he has done
everything he possibly could, he must realize that, in the whole organization, he is the one
who is in the best position to evaluate the situation. He receives an assignment. He may
accept it or reject it. But if he accepts, he must perform. If he fails, the damage is evaluated.
Everybody makes mistakes. The important point is to avoid making too many mistakes and
also to understand fully that the extensive control reflected in “responsibility accounting” is
the necessary balance to the great freedom of action that individual executives are given.

6-33
Discussions of this problem have again and again revealed a tendency among
students (and among accountants and managers) to “fix the blame”—as if the variances
arising from a responsibility accounting system should pinpoint misbehaviour and provide
answers. The point is that no accounting system or variances can provide answers.
However, variances can lead to questions. In this case, in deciding where the penalty
should be assigned, the student might inquire who should be asked—not who should be
blamed.
Classroom discussions have also raised the following diverse points:
(a) Is the railway company liable? Yes, and they have liability insurance.
(b) Costs of idle time are usually routinely charged to the production department.
Should the information system be fine-tuned to reallocate such costs to the
purchasing department? Both purchasing and the plant manager answer to either a
business manager or an operations manager. The buck stops here. Some companies
have the purchasing department answer directly to the plant manager, which would
be a probable result of the above mistake. Give accountability to the plant manager
as his/her authority warrants it.
(c) How will the purchasing managers behave in the future regarding willingness to
take risks?
The text emphasizes the following: Beware of overemphasis on controllability. For
example, a time-honoured theme of management is that responsibility should not be given
without accompanying authority. Such a guide is a useful first step, but responsibility
accounting is more far-reaching. The basic focus should be on information or knowledge,
not on control. The key question is: “Who is the best informed?” Put another way, “Who is
the person who can tell us the most about the specific item, regardless of ability to exert
personal control?”
6-38 (15 min.) Budgeting and governance.

1. The standards proposed by Maki are not challenging. In fact, she set the target at the level
her department currently achieves.
DM 2.95 kg  100 units = 295 kg

DL 19.2 min.  100 units = 1,920 min ÷ 60 = 32 hrs.
MT 9.9 min.  100 units = 990 min. ÷ 60 = 16.5 hrs.
2. Maki probably chose these standards so that her department would be able to make the
goal and receive any resulting reward. With a little effort, her department can likely beat
these goals.
3. As discussed in the chapter, benchmarking might be used to highlight the easy targets set
by Maki. Perhaps the organization has multiple plant locations that could be used as
comparisons. Alternatively, management could use industry averages. Also, management
should work with Maki to better understand her department and encourage her to set
more realistic targets. Finally, the reward structure should be designed to encourage
increasing productivity, not beating the budget.

6-34
6-39 (60 min.) Comprehensive problem with ABC costing

1.
Revenue Budget

Cat-allac 530 $205 $108,650
Dog-eriffic 225 310 69,750
Total $178,400
2.
Production Budget
Product
Add target ending finished goods inventory 30 10
Total required units 560 235
Deduct beginning finished goods inventory 10 19
Units of finished goods to be produced 550 216
3.
Material
Plastic Metal Total
Cat-allac (550 units × 4 lbs. and 0.5 lb.) 2,200 lbs. 275 lbs.
Dog-eriffic (216 units × 6 lbs. and 1 lb.) 1,296 lbs. 216 lbs.
Total quantity of direct material to be used 3,496 lbs. 491 lbs.
Cost Budget
Plastic: 290 lbs. × $3.80 per lb. $ 1,102
Metal: 70 lbs. × $3.10 per lb. $ 217
Plastic: (3,496 – 290) lbs.  $5 per lb. 16,030
Metal: (485 – 70) lbs.  $4 per lb. _ 1,684
Direct materials to be used this period $17,132 $1,901 $19,033

6-35
Direct Material Purchases Budget

Material
Plastic Metal Total
To be used in production (requirement 3) 3,496 lbs. 491 lbs.
Add target ending inventory 410 lbs. 65 lbs.
Total requirements 3,906 lbs. 556 lbs.
Deduct beginning inventory 290 lbs. 70 lbs.
Purchases to be made 3,616 lbs. 486 lbs.
Cost Budget
Plastic: 3,616 lbs.  $5 $18,080
Metal: 486 lbs.  $4 _______ $1,944
Purchases $18,080 $1,944 $20,024
4.
Output Units
Produced DMLH Total Hourly Wage
(requirement 2) per Unit Hours Rate Total
Cat-allac 550 3 1,650 $10 $16,500
Dog-eriffic 216 5 1,080 10 10,800
Total $27,300
5. Machine Setup Overhead

Cat-allac Dog-eriffic Total
Units to be produced 550 216
Units per batch ÷ 25 ÷9
Number of batches (rounded up) 22 24
Setup time per batch ×1.50 hrs. ×1.75 hrs.
Total setup time 33 hrs. 42 hrs. 75 hrs.
Budgeted machine setup costs = $105 per setup hour  75 hours

= $7,875
Processing Overhead
Budgeted machine-hours (MH) = (11 MH per unit × 550 units) + (19 MH per unit × 216 units)
= 6,050 MH + 4,104 MH = 10,154 MH
Budgeted processing costs = $10 per MH × 10,154 MH
= $101,540
Inspection Overhead
Budgeted inspection-hours = (0.5  22 batches) + (0.7  24 batches)
= 11 + 16.8 = 27.8 inspection hrs.
Budgeted inspection costs = $15 per inspection hr.  27.8 inspection hours
= $417

6-36
Manufacturing Overhead Budget

Machine setup costs $ 7,875
Processing costs 101,540
Inspection costs 417
Total costs $109,832
6.
April 30
Product
Unit of Unit of Unit of
Input Output Total Output Total
Plastic $ 5 4 lbs. $ 20.00 6 lbs. $ 30.00
Metal 4 0.5 lbs. 2.00 1 lb. 4.00
Direct manufacturing labour 10 3 hrs. 30.00 5 hrs. 50.00
Machine setup 105 0.06 hrs.a 6.30 0.2 hra 21.00
Processing 10 11 MH 110.00 19 MH 190.00
Inspection 15 0.02 hrb 0.30 0.08 hr.b 1.20
Total $168.60 $296.20
a
33 setup-hours ÷ 550 units = 0.06 hours per unit; 42 setup-hours ÷ 210 units = 0.2 hours per unit
b
11 inspection hours ÷ 550 units = 0.02 hours per unit; 16.8 inspection hours ÷ 210 units = 0.08 hours per unit

April 30
Quantity Cost per unit Total

Direct Materials
Plastic 410 $ 5 $2,050
Metals 65 4 260 $ 2,310
Finished goods
Cat-allac 30 $168.60 $5,058
Dog-eriffic 10 296.20 2,962 8,020

6-37
7.
Beginning finished goods inventory, April, 1 ($1,000 + $4,650) $ 5,650
Direct materials used (requirement 3) $ 19,033
Direct manufacturing labour (requirement 4) 27,300
Manufacturing overhead (requirement 5) 109,832
Deduct: Ending finished goods inventory, April 30 (requirement 6) 8,020
8.
Salaries ($32,000 ÷ 2  1.05) $16,800
Other fixed costs ($32,000 ÷ 2) 16,000
Sales commissions ($178,400  1%) 1,784
Total nonmanufacturing costs $34,584
9.
Budgeted Income Statement
Revenues $178,400
Gross margin 24,605
Operating (nonmanufacturing)
costs 34,584
Operating income $ (9,979)
10. Animal Gear is making a loss and will need to increase revenues and manage costs to
turn around the business. Preparing a budget helps Animal Gear manage costs based on revenues
and production needs, look for opportunities to increase efficiencies, reduce costs, particularly in
areas where costs are high, coordinate and communicate across different parts of the
organization, create a framework for judging performance and facilitating learning, and motivate
management and employees to achieve “stretch” targets of higher revenues and lower costs.

6-38
6-40 (25 min.) Cash budget (continuation of 6-39).

1.
Cash Budget
April 30
Cash balance, April 1 $ 5,900
Add receipts
Cash sales ($178,400 × 10%) 17,840
Credit card sales ($178,400 × 90% × 98%) 157,349
Direct materials ($8,000 + $20,024 × 50%) $ 18,012
Manufacturing overhead ($109,832 ─ $25,000 depreciation) 84,832
Nonmanufacturing salaries 16,800
Sales commissions 1,784
Other nonmanufacturing fixed costs ($16,000 ─ $10,000 depreciation) 6,000
Machinery purchase 13,000
Income taxes 5,000
Financing
Repayment of loan $ 2,000
1 20
Interest at 12% ($2,000  12%  )
12
Total effects of financing (z) $ 2,020
Ending cash balance, April 30 (x) ─ (y) ─ (z) $ 6,341
Note: The solution assumes that the loan is repaid. Some students may point out that the cash
balance at the end of April after the loan is paid is anticipated to be $6,341, which is less than
$7,000 and so Animal Gear would not repay the loan. Under this assumption, the $2,000
repayment would not be shown. Our assumption is that Animal Gear has $8,361 ($181,089
−$172,728) at the end of April before the loan is paid which is more than $7,000 and so the loan
will be repaid.
2. Animal Gear’s managers prepare a cash budget in addition to the operating income
budget to plan cash flows to ensure that the company has adequate cash to pay vendors, meet
payroll, and pay operating expenses as these payments come due. Animal Gear could be very
profitable on an accrual accounting basis, but the pattern of cash receipts from revenues might be
delayed and result in insufficient cash being available to make scheduled payments for its
expenses. Animal Gear’s managers may then need to initiate a plan to borrow money to finance
any shortfall. Building a profitable operating plan does not guarantee that adequate cash will be
available, so Animal Gear’s managers need to prepare a cash budget in addition to an operating
income budget.

6-39
6-41 (60 min.) Comprehensive budgeting problem; activity-based costing, operating

and financial budgets.
1a.
Revenues Budget
For the Month of June, 2018

Regular 2,000 $120 $240,000
Deluxe 3,000 195 585,000
Total $825,000
b.
Production Budget
Product
Regular Deluxe
Budgeted unit sales 2,000 3,000
Add: target ending finished goods inventory 400 600
Total required units 2,400 3,600
Deduct: beginning finished goods inventory 250 650
Units of finished goods to be produced 2,150 2,950
c.
Material
Cloth Wood Total
Regular (2,150 units × 1.3 yd.; 0 b.f.) 2,795 yds. 0 b.f.
Deluxe (2,950 units × 1.5 yds.; 2 b.f.) 4,425 yds. 5,900 b.f.
Total quantity of direct materials to be used 7,220 yds. 5,900 b.f.
Cost Budget
(under a FIFO cost-flow assumption) $ 3,219 $ 6,060

Cloth: (7,220 yd. – 610 yd.) × $5.25 per yd. 34,703
Wood: (5,900 – 800) × $7.50 per b. f. 38,250
Direct materials to be used this period $37,922 $44,310 $82,232

6-40

Material
Cloth Wood Total
To be used in production 7,220 yds. 5,900 ft
Add: Target ending direct material inventory 386 yds. 295 ft
Total requirements 7,606 yds. 6,195 ft
Deduct: beginning direct material inventory 610 yds. 800 ft
Purchases to be made 6,996 yds. 5,395 ft
Cost Budget
Cloth: (6,996 yds. × $5.25 per yd.) $36,729
Wood: (5,395 ft × $7.50 per b.f.) ______ $40,463
Total $36,729 $40,463 $77,192
d.
Output Units Direct Manufacturing Total Hourly Wage Total

Produced Labour-Hours per Unit Hours Rate
Regular 2,150 5 10,750 $15 $161,250
Deluxe 2,950 7 20,650 15 309,750
Total 31,400 $471,000
e.
Manufacturing Overhead Costs Budget
For the Month of June 2018
Total
Machine setup
(Regular, 43 batchesa × 2 hrs./batch + Deluxe, 59 batchesb × 3 hrs./batch)  $18/hour $ 4,734
Processing (31,400 DMLH  $1.80) 56,520
Inspection [(2,150 + 2,950) pairs  $1.35 per pair] 6,885
Total $68,139
a
Regular: 2,150 pairs ÷ 50 pairs per batch = 43; bDeluxe: 2,950 pairs ÷ 50 pairs per batch = 59

6-41
f.
Regular Deluxe
Unit of Input Unit of Output Total Unit of Output Total
Cloth $ 5.25 1.3 yd $ 6.83 1.5 yd $ 7.88
Wood 7.50 0 b.f. 0.00 2 b.f. 15.00
Direct manufacturing labour 15.00 5 hr. 75.00 7 hrs. 105.00
Machine setup 18.00 0.04 hra 0.72 0.06 hrb 1.08
Processing 1.80 5 hrs 9.00 7 hrs 12.60
Inspection 1.35 1 pair 1.35 1 pair 1.35
Total $92.90 $142.91
a
2 hours per setup ÷ 50 pairs per batch = 0.04 hr. per unit
b
3 hours per setup ÷ 50 pairs per batch = 0.06 hr. per unit

June, 2018

Direct Materials
Cloth 386 yards $5.25 $2,026.50
Wood 295 b.f. 7.50 2,212.50 $ 4,239
Finished goods
Regular 400 $ 92.90 $37,160
Deluxe 600 142.91 85,746 122,906
g.
Beginning finished goods inventory, June 1 ($23,250 + $92,625) $115,875
Direct materials used (requirement c) $ 82,232
Direct manufacturing labour (requirement d) 471,000
Manufacturing overhead (requirement e) 68,139
Deduct ending finished goods inventory, June 30 (requirement f) 122,906

6-42
h.
Total
Marketing and general administration
8% × $825,000 $66,000
Shipping
(5,000 pairs ÷ 40 pairs per shipment) × $15 1,875
Total $67,875
2.
Cash Budget
June 30, 2018
Cash balance, June 1 (from Balance Sheet) $ 9,435
Add receipts
Collections from May accounts receivable 307,800
Collections from June accounts receivable
($825,000  60%) 495,000
Total collection from customers 802,800

Direct material purchases in May $ 15,600
Direct material purchases in June
($77,192  80%) 61,754
($68,139  70% because 30% is depreciation) 47,697
Nonmanufacturing costs
($67,875  90% because 10% is depreciation) 61,088
Taxes 10,800
Dividends 15,000
Financing
Interest at 6% ($150,000  6%  1 ÷ 12) (z) $ 750
Ending cash balance, June 30 (x) – (y) – (z) $128,546

6-43
3.
Budgeted Income Statement
Revenues $825,000
Bad debt expense ($825,000  2%) 16,500
Net revenues $808,500
Gross margin 194,160
Operating (nonmanufacturing) costs $67,875
Interest expense (for June) 750 68,625
Net income $125,535
Budgeted Balance Sheet

June 30, 2018
Assets
Cash $ 128,546
Accounts receivable ($825,000 × 40%) $330,000
Less: allowance for doubtful accounts 16,500 313,500
Inventories
Direct materials $ 4,239
Finished goods 122,906 127,145
Fixed assets $870,000

Less: accumulated depreciation
($136,335 + $68,139  30% + $67,875 × 10%)) 163,564 706,436
Total assets $1,275,627
Liabilities and Equity

Accounts payable ($77,192 × 20%) $ 15,438
Interest payable 750
Long-term debt 150,000
Common stock 300,000
Retained earnings ($698,904 + $125,535 – $15,000)) 809,439
Total liabilities and equity $1,275,627

6-44
MINI-CASE
6-42 (60 min.) Comprehensive budgeting problem; activity-based costing, operating

and financial budgets.
1a.
Revenue Budget
For the Month of June
Units Selling Price Total Revenue

Large 3,000 $3 $ 9,000
Giant 1,800 4 7,200
Total $16,200
1b.
Production Budget
Product
Large Giant
Budgeted unit sales 3,000 1,800
Add: target ending finished goods inventory 300 180
Total required units 3,300 1,980
Deduct: beginning finished goods inventory 200 150
Units of finished goods to be produced 3,100 1,830
1c.
Material
Sugar Sticks Total
Large (3,100 units × 0.25 lb.; 1 stick) 775 lbs. 3,100
Giant (1,830 units × 0.50 lb.; 1 stick) 915 lbs. 1,830
Total quantity of direct materials to be used 1,690 lbs. 4,930
Cost Budget
(under a FIFO cost-flow assumption) $ 64 $ 105
Sugar: (1,690 lbs. – 125 lbs.) × $0.50 per lb. 783
Sticks: (4,930 – 350) × $0.30 per stick ____ 1,374
Direct materials to be used this period $847 $1,479 $2,326

6-45

Material
Sugar Sticks Total
To be used in production 1,690 lbs. 4,930
Add: Target ending direct material inventory 240 lbs. 480
Total requirements 1,930 lbs. 5,410
Deduct: beginning direct material inventory 125 lbs. 350
Purchases to be made 1,805 lbs. 5,060
Cost Budget
Sugar: (1,805 lbs. × $0.50 per lb.) $903
Sticks: (5,060 × $0.30 per stick) ____ $1,518
Total $903 $1,518 $2,421
1d.
Output Units Direct Manufacturing Total Hourly Wage Total
Produced Labour-Hours per Unit Hours Rate
Large 3,100 0.20 620 $8 $4,960
Giant 1,830 0.25 457.5 8 3,660
Total 1,077.5 $8,620
1e.
Manufacturing Overhead Costs Budget
Total
Machine setup
(Large 310 batchesa  0.08 hrs./batch + Giant 183 batchesb  0.09
hrs./batch)  $20/hour $ 825
Processing (1,077.5 DMLH  $1.70) 1,832
Total $2,657
a
Large: 3,100 units ÷ 10 units per batch = 310
b
Giant: 1,830 units ÷ 10 units per batch = 183

6-46
1f.
Large Giant
Unit of Input Unit of Output Total Unit of Output Total
Sugar $ 0.50 0.25 lb $0.125 0.50 lb. $ 0.25
Sticks 0.30 1 0.30 1 0.30
Direct manufacturing
labour 8.00 0.2 hr. 1.60 0.25 hr. 2.00
Machine setup 20.00 0.008 hr.a 0.16 0.009 hra 0.18
Processing 1.70 0.2 hr 0.34 0.25 hr 0.425
Total $2.525 $3.155
a
0.08 hour per setup ÷ 10 units per batch = 0.008 hr. per unit;
0.09 hour per setup ÷ 10 units per batch = 0.009 hr. per unit.

June
Direct Materials
Sugar 240 lbs. $0.50 $120
Sticks 480 sticks 0.30 144 $ 264
Finished goods
Large 300 $2.525 $758
Giant 180 3.155 568 1,326
1g.
Beginning finished goods inventory, June 1 ($500 + $474) $ 974
Direct materials used (requirement c) $2,326
Direct manufacturing labour (requirement d) 8,620
Manufacturing overhead (requirement e) 2,657
Deduct ending finished goods inventory, June 30 (requirement f) 1,326

6-47
1h.
Total
Marketing and general administration
10%  16,200 $1,620
2.
Cash Budget
June 30
Cash balance, June 30 $ 587
Add receipts
Collections from May accounts receivable 4,704
Collections from June accounts receivable
($16,200  80%  50%) 6,480
Collections from June cash sales
($16,200  20%) 3,240
Total collection from customers 14,424
Direct material purchases in May $ 696
Direct material purchases in June
( $2,421  70%) 1,695
( $2,657  60% because 40% is depreciation) 1,594
Nonmanufacturing costs
( $1,620  70% because 30% is depreciation) 1,134
Taxes 500
Financing
Interest at 12% ($20,000  12%  1 ÷ 12) (z) $ 200
Ending cash balance, June 30 (x) ─ (y) ─ (z) $ 572
3.
Budgeted Operating Income Statement
Revenue $16,200
Gross margin 2,949
Operating (nonmanufacturing) costs $1,620
Bad debt expense ($16,200  80%  1%) 130
Interest expense (for June) 200 1,950
Net income $ 999

6-48
Budgeted Balance Sheet

June 30
Assets
Cash $ 572
Accounts receivable ($16,200  80%  50%)) $ 6,480
Less: allowance for doubtful accounts 130 6,350
Inventories
Direct materials $ 264
Finished goods 1,326 1,590
Fixed assets $190,000

Less: accumulated depreciation
($55,759 + 2,657  40% + 1,620  30%) 57,308 132,692
Total assets $141,204
Liabilities and Equity

Accounts payable ($2,421  30%) $ 726
Interest payable 200
Long-term debt 20,000
Common stock 10,000
Retained earnings ($109,279 + $999) 110,278
Total liabilities and equity $141,204
6-43 (60 min.) University department, budget revision options.
This exercise illustrates the difficulty of budgeting issues in universities. There are multiple
stakeholders—student-athletes, student non-athletes, coaches, sports administrators, university
faculty, university administrators, and alumni. Actions that benefit one type of stakeholder can
“gore the ox” of other stakeholders.
The general options that groups could examine are outlined below.
Increasing Revenue
There are at least two approaches to “increase” revenue:
(a) Increase revenue from outside sources. For example, sell more tickets to football, basketball,
etc. This is heavily driven by success. Medley’s concerns about academic standards likely
will constrain Tax’s flexibility to recruit any athlete he believes to be a major star.
Some universities have been innovative in terms of increasing cable television revenue
from coverage of university sporting games.
Tax could propose direct fundraising for the athletics department. This could run into
problems with Medley, as she may require all fundraising to be coordinated at the university
level.
(b) Increase the “revenue” attributed to the athletics department. Tax could argue that a
successful athletics program has many positive externalities for Maritime University, many of
which increase MU revenue.
• Alumni are more likely to give money and other contributions when they are stimulated
by being on campus to watch a nationally ranked team or viewing a successful MU team
on television. Many universities use tickets to athletic events and invitations to related
social functions as a thank-you to major donors.

6-49
• Athletics officials (especially nationally prominent coaches) are expected to assist Medley
and her senior officers in promoting MU to potential donors, parents of future students,
etc. For example, the coach of a number-one-ranked football team may attend over 50
dinners/functions a year on behalf of the university. Some of these dinners are “one-on-
one” with potential large donors.
• Merchandising revenue sold to alumni and other supporters is likely to increase when
MU’s athletics teams achieve national success. These include sweaters, towels, and rings.
The current budgeting process gives zero recognition to these externalities, which may well exceed
the projected $3.612 million deficit.
Decreasing Costs
Tax can always cut costs to meet any level Medley may impose. However, the ways to achieve any
substantial reduction will be relatively painful.
(a) Reduce scholarships (either number or amount) to students. This can take time to achieve
bottom-line reductions as existing students may have three more years of scholarship
remaining. Unless Tax cuts existing scholarships, he is restricted to cutting back on
scholarships to new students. This option will be very painful. One consequence will be
lower-quality levels of student athletes which will have implications for the sporting
competitiveness of MU. The option of cutting back on already committed existing
scholarships would be traumatic (but it has occurred).
Tax could undertake across-the-board cuts or target the reductions to some sports. For
example, sports that do not draw sizable crowds may be candidates for reduction. One
difficulty here is that Tax is faced with both reducing total costs and increasing the relative
percentage of scholarships to women. The scholarship breakdown is:
Men’s Women’s
Program Program Total
Football 37 — 37
Basketball 21 11 32
Swimming 6 4 10
Other 4 2 6
Total 68 17 85
The largest percentage of scholarships are for the two highly successful programs—men’s
football (37/85 = 44%) and men’s basketball (21/85 = 25%). There is little room for cutbacks
in the second tier sports at MU.
(b) Reduce sports sponsored by the athletics department. Cut out support for all but a few
targeted sporting programs. This will cause morale problems for students in these sporting
programs (such as rugby, soccer, and volleyball).
(c) Reduce salaries and other costs of the athletics department. The salary for Bill Madden is an
obvious target for Tax’s cost reduction. However, Madden may have a multi-year contract
that leaves MU little room for cost reduction. Moreover, if cost reduction is attempted,
Madden may leave, which could have negative general effects on morale and university
finances. Tax could approach alumni or sponsors to cover Madden’s salary and other costs.
This would address Medley’s budget balance concerns but not her concern as to the level of
Madden’s salary relative to leading academics’.

6-50
Cost reductions could be achieved by reducing the number of assistant coaches and the number of
support officials. The effect of these reductions on student morale and MU athletic achievements is
difficult to measure.
Gender Issues
Based on dollar expenditures and scholarships, Medley has evidence to support her concerns. The
men’s programs get the “lion’s share” of the expenditures and student scholarships.
Men’s Women’s
Program Program
Costs $13.248 million $3.36 million
Full student scholarships 68 17
Tax could respond by noting that the men’s programs have a lower deficit based on revenue minus
assigned costs (in millions):
Men’s Women’s
Program Program
Revenue $12.420 $ 0.936
Assigned costs 13.248 3.360
Contribution $(0.828) $(2.424)
This lower deficit reflects, in part, the large revenue-drawing capacity of their successful men’s
football and athletics departments.
Medley’s demands for a balanced budget, more gender equality, and higher academic
standards leaves Tax in an unenviable position.

6-51
Another random document with
no related content on Scribd:
Europe had followed with an attentive eye the
[1847 a.d.] events we have just related. Peoples were
preoccupied with them, courts saw in them a
source of serious anxiety. All, taking the Vienna congress as their
point of view, desired a federative, neutral, and peaceable
Switzerland. From this point of view the cause of the Sonderbund
seemed to them to have justice on its side. But everywhere, owing to
diversified interests, the language differed. “A fine country and a
good people,” said King Louis Philippe, “but it is in a bad way. Let us
keep from interfering. To hinder others so doing is to render them a
great service.” Guizot nevertheless proposed to occupy himself in
Swiss affairs in a conference to be held at Paris or in London, but he
was unsuccessful. Once Austrian troops on the one hand, French on
the other, drew near Switzerland, but they were speedily recalled to
their cantonments. Metternich would willingly have taken the lead,
had he not known that France could not leave Austria to interfere
alone. Thenceforth, of the two powers, one contented itself with
secretly aiding the Sonderbund by relays of arms and money, the
other with lavishing encouragements on the seven cantons through
its ambassador.
Prussia hesitated, recommending Neuchâtel prudence. Czar
Nicholas could not understand an intervention unless the powers
had sixty thousand men behind them. Great Britain would not
interfere at all. Under the ministry of Lord Palmerston, a young
statesman named Peel, son of the illustrious minister of that name,
joined the Bear Club at Bern where radicals met. At Rome, the
French ambassador, Rossi, an ancient deputy of the Geneva diet,
was charged to solicit Pius IX to recall the Jesuits from Lucerne. It
was thought both in London and Paris that the best means of
restoring peace to Switzerland was to take from the radicals their
principal grievance and their flag. The holy father contented himself
with letting the Swiss know that he would remain passive in the strife
(passive se habere decrevit).
Switzerland, under these circumstances, was persuaded that the
moment had come frankly to declare to Europe her intention of being
sole interpreter of her Pact of Alliance; to have done with the
questions that agitated her; and to constitute herself on the basis of
an enlarged and equitable democracy, which would soon see her the
first on the road towards which all European peoples were
proceeding. She knew the states which lavished advice on her to be
torn by a revolutionary spirit and incapable of uniting against her in a
common resolution. It was under the influence of this thought that
Ochsenbein opened the confederation diet on the 5th of July, 1847.
Although only the son of a hotel keeper, without instruction in the
classics, but gifted with prompt and pleasing intelligence, he
presented himself unembarrassed before an assembly wherein the
heads of the two parties dividing Switzerland were sitting, and at
which the majority of ministers from foreign powers assisted.
Frankness characterised his discourse. Foreseeing a European
crisis—“Our modern world,” said he, “rests on worm-eaten columns,
on institutions that have for support only the powers of habit and
interests, a construction that the slightest storm will make a ruin.
Well, this storm approaches; the colossus is quite aware of it. He
sleeps a dangerous sleep.” Descending from these heights to
questions of the moment, the president of the diet proclaimed the
right of the majority, whom Switzerland had always recognised.
When this majority had been declared, he courteously invited all the
cantons to join with it. Callame, a Neuchâtel deputy, exposed in
language firm and untouched by passion the gravity of events that
had given place to a separate alliance, and demanded that they
should leave those who had concluded it the time to convince
themselves that it was no longer necessary.
In reality, the vote of the majority meant a declaration of war. The
diet adjourned so as to give the parties time either to unite or to
finish their preparations for hostilities. It reassembled on the 18th of
October. Two delegates, envoys of peace, were sent from each of
the Sonderbund cantons, but they met with scant welcome: one-half
wanted war.
Colonel Dufour is Made Commander of the Army

On the 29th of October the deputies from the seven cantons left
Bern, and on the 4th of November it was decided that the decree
ordering the dissolution of their alliance should be executed by arms.
The diet put on foot fifty thousand men, and entrusted the command,
with the rank of general, to Colonel Dufour, of Geneva. No name in
the army was more respected, none had more weight. Dufour did not
belong to either side. In sympathy he was conservative, but was
none the less a man of progress. He had been in the wars and
published writings on military science, fruits of a long and wide
experience. No chief knew as he did the canton militia, over whose
manœuvres he had for a number of years presided in the camp at
Thun, as chief instructor of the engineering corps. To these warlike
qualities he united the virtues of a man of peace. He was occupied in
the elaboration, on a plan he had conceived, of the fine map of
Switzerland which bears his name, when he was called to quit the
pursuits of the student for the field of battle. He comprehended the
danger to his country. He clearly perceived his duty, and he thought
only of accomplishing it.
In accepting the first command he made what he considered
necessary stipulations, demanding a sufficient number of troops and
absolute power. All this he obtained, though not without some
resistance. He was given 100,000 men and 260 field pieces. This
army he distributed into seven divisions. In the choice of superior
officers, he exacted that he alone should judge of their capacity
without any regard to political opinion; this was the way both to get
excellent officers and to prepare for what he considered to be his
duty—the quieting of hatreds after the struggle. In a short time there
was no longer question of politics in the army. Addressing once his
heads of divisions, “I shall never depart,” he said, “from the laws of
moderation and humanity. A stranger to political agitation and faithful
to my military duties, I shall try to establish order and discipline in the
federal troops, to make public and private property respected, to
protect the Catholic religion in her ministers, her temples, and her
religious establishments—in a word, to do everything to soften the
inevitable evils of war. If violence be used, let it not come from us.
After fighting, spare the vanquished; however strong one may be,
relieve the despair of the enemy: then we can congratulate ourselves
after the fight on never having forgotten that it was between
confederates.”
These instructions being made known, the general resolved to
trust nothing to chance, and to make no offensive movement unless
sure of the superiority of his forces; this he recognised as the surest
way towards a speedy ending with the least bloodshed. Soon the
confidence he inspired began to show itself. The city of Bâle, long
undecided, sent him excellent artillery. Neuchâtel and Appenzell
alone continued to take no part in the war. The promptitude with
which the army got under arms, well ordered, well clothed, and well
equipped, astonished foreigners. The redivision of troops was
necessitated by the situation. The country occupied by the
Sonderbund formed three distinct masses—Fribourg, the original
cantons, and Valais. Dufour proposed to attack them separately, and
to begin with Fribourg.
Preparations of the Sonderbund
The powers held exaggerated ideas of the Sonderbund forces. It

could hardly put on foot more than thirty thousand regular troops.
The Landsturm, it is true, meant a more considerable number of
men, but not having received sufficient organisation could not be
compared to the excellent reserves of the large cantons, and did not
give the help expected of them. Far from one another, the separatist
states could only with difficulty lend one another aid. The original
cantons tried nevertheless to keep their ways open by means of
boldness in offensive actions. Even before the diet began its
campaign, the men of Uri seized the St. Gotthard passes (November
3rd); threw themselves across the Levantina, surprised three
thousand Ticinese encamped at Airolo, and drove them as far as the
Moesa bridge. But arrived at this point, they found themselves face
to face with Grisons and Ticino militia, superior to them in number,
who stopped their progress. The expedition had no other result than
that of holding back two thousand excellent soldiers from the places
where decisive blows were to be struck. Another attempt, made from
Lucerne, to penetrate into Catholic Aargau and to free Fribourg, by
means of a diversion, had no better success.
The Capitulations of Fribourg and Lucerne End the Sonderbund
Without taking much account of these movements, Dufour

occupied himself only in concentrating his forces so as to surround
the Sonderbund states, on all their accessible frontiers. His
provisions were assured, his hospital organised. Immediately upon
the rupture being announced, Colonel Ochsenbein, who presided
over the diet, left office to put himself entirely at the disposition of the
general-in-chief. The general placed him at the head of the Bernese
reserves, which composed his seventh division and which he
assimilated with the active troops. He stationed them first on the
Lucerne frontier, and when he arranged to draw near Fribourg, he
called Ochsenbein to advance towards that capital, in order to make
the enemy think he would attack from the eastern side. However,
twenty thousand men and fifty-four artillery pieces, under colonels
Rilliet, Burkhard, and Donatz, advanced from the north and west by
different routes, and kept their movements secret that they might
arrive on the same day at the gate of Fribourg. On the 13th the town
was surrounded. An experienced leader, Colonel Maillardoz, had
raised defences all round, and they had prepared to attack these
exterior forts when the Fribourg government, recognising the
impossibility of resistance, gave up the town, dismissed the troops,
and renounced the Sonderbund. The taking of Fribourg would not
have cost the federal army a single man if through a mistake a
Vaudois troop had not rushed under fire from the Bertigny redoubt,
which resulted in seven killed and a large number wounded.
As soon as Fribourg had capitulated the general confided to
Colonel Rilliet the care of occupying the military cantonments and
watching the entrance of Valais. He himself hastened to Aarau, to
prepare for the investment of Lucerne. Two rivers, the Emme and the
Reuss, protected this town. The bridges on these rivers had been
broken or fortified. The ground on which it was foreseen that the
most serious engagements would be delivered was the labyrinth
which stretches from the Reuss to the Lake of Zug; bristling with
wooded hills, where passage had been stopped by barricades and
mines had been laid in the defiles. It was necessary to attack these
strong positions, because they served as a link between Schwyz and
Lucerne, and success on this point was decisive, whilst elsewhere it
was not so. The leader whom the five cantons had put in charge of
their militia, Ulrich de Salis-Soglio, understood this, and went to
these places. The forces he could dispose of were some twenty
thousand regulars and a similar body of the Landsturm. Salis had
learned warfare in fighting Napoleon. A sincere Protestant, he had
nevertheless devoted himself to a cause which had his political
sympathies, but of which he despaired.
A resolution being taken to force his entrenchments, Dufour set
five divisions of his army on the march from the various points they
occupied, giving them Lucerne as object. Ochsenbein’s reserves
went down the Emme valley, overcoming a lively resistance. The
Burkhard and Donatz divisions approached the Emme and the
Reuss between the bridges of Wolhusen and Gislikon, at the same
time that colonels Ziegler and Gmur at the head of some odd
thousands of men attacked Salis in his intrenched camps. Ziegler
mastered the Gislikon bridge and the Honau defiles. Gmur, after
having received on his march the submission of Zug, scaled the
heights of Meyers Kappel. Everything made for success. Victory was
hotly disputed, but the Schwyzers were in the end thrown back
towards Immensee, whence they fell back on Art and Goldau.
Troops from the other cantons turned to Lucerne. The separation of
Schwyz with its allies was accomplished. On every hand the federal
troops marched simultaneously on that capital. The gates were
opened to them by a convention, and on the 24th of November
Dufour made his entry. On the following days the Waldstätte and the
Valais made their submission. Twenty-five days after the decree of
execution the task of the army was complete—the Sonderbund no
longer existed.d
The diet now debated the draft constitution
[1848-1874 a.d.] drawn up by Kern of Thurgau and Druey of
Vaud, which in the summer of 1848 was
accepted by fifteen and a half cantons, the minority consisting of the
three forest cantons, Valais, Zug, Ticino, and Appenzell (Tuner
Rhodes), and it was proclaimed on September 12th.
From 1848 onwards the cantons continually revised their
constitutions, always in a democratic sense, though after the
Sonderbund War Schwyz and Zug abolished their Landsgemeinde.
The chief point was the introduction of the referendum, by which
laws made by the cantonal legislature may (facultative referendum)
or must (obligatory referendum) be submitted to the people for their
approval; and this has obtained such general acceptance that
Fribourg alone does not possess the referendum in either of its two
forms, Ticino having accepted it in its optional form in 1883. It was
therefore only natural that attempts should be made to revise the
federal constitution of 1848 in a democratic and centralising sense,
for it had been provided that the federal assembly, on its own
initiative or on the written request of fifty thousand Swiss electors,
could submit the question of revision to a popular vote. In 1866 the
restriction of certain rights to Christians only was swept away; but
the attempt at final revision in 1872 was defeated by a small majority,
owing to the efforts of the anti-centralising party. Finally, however,
another draft was better liked, and on April 19th, 1874, the new
constitution was accepted by the people. This constitution is that
now in force, and is simply an improved edition of that of 1848. The
federal tribunal (now of nine members only) was fixed (by federal
law) at Lausanne, and its jurisdiction enlarged, especially in
constitutional disputes between cantons and the federal authorities,
though jurisdiction in administrative matters (e.g., educational,
religious, election, commercial) is given to the federal council—a
division of functions which is very anomalous, and does not work
well.
A system of free elementary education was set up, and many
regulations were made on ecclesiastical matters. A man settling in
another canton was, after a residence of three months, only, given all
cantonal and communal rights, save a share in the common property
(an arrangement which as far as possible kept up the old principle
that the “commune” is the true unit out of which cantons and the
confederation are built), and the
membership of the “commune” carries with
it cantonal and federal rights. The
referendum was introduced in its
“facultative” form—i.e., all federal laws must
be submitted to popular vote on the
demand of thirty thousand Swiss electors or
of eight cantons. If the revision of the
federal constitution is demanded by one of
the two houses of the federal assembly or
by fifty thousand Swiss citizens, the
question of revision must be submitted to a
popular vote, as also the draft of the revised
constitution—these provisions, contained
already in the constitution of 1848, forming
a species of “obligatory referendum.” It was
supposed that this plan would lead to
radical and sweeping changes, but as a
matter of fact there have been (1874-1886)
about one hundred and seven federal laws
and resolutions passed by the assembly, of
which nineteen were by the referendum
submitted to popular vote, thirteen being
rejected, while six only were accepted—the
rest becoming law, as no referendum was
demanded. There has been a very steady A Swiss Finial
opposition to all schemes aiming at
increased centralisation. By the
constitutions of 1848 and 1874 Switzerland has ceased to be a mere
union of independent states joined by a treaty, and has become a
single state with a well-organized central government.
This new constitution inclined rather to the Act
[1874-1887 a.d.] of Mediation than to the system which prevailed
before 1798. A status of “Swiss citizenship” was
set up, closely joined to cantonal citizenship: a man settling in a
canton not being his birthplace got cantonal citizenship after two
years, but was excluded from all local rights in the “commune” where
he might reside. A federal or central government was set up, to
which the cantons gave up a certain part of their sovereign rights,
retaining the rest. The federal legislature (or assembly) was made up
of two houses—the council of states (Stände Rat), composed of two
deputies from each canton, whether small or great (forty-four in all),
and the national council (National Rat), made up of deputies (now
145 in number) elected for three years, in the proportion of one for
every twenty thousand souls or fraction over ten thousand, the
electors being all Swiss citizens. The federal council or executive
(Bundesrat) consisted of seven members elected by the federal
assembly; they are jointly responsible for all business, though for the
sake of convenience there are various departments, and their
chairman is called the president of the confederation. The federal
judiciary (Bundesgericht) is made up of eleven members elected by
the federal assembly for three years; its jurisdiction is chiefly
confined to civil cases, in which the confederation is a party (if a
canton, the federal council may refer the case to the federal tribunal),
but takes in also great political crimes—all constitutional questions,
however, being reserved for the federal assembly. A federal
university and a polytechnic school were to be founded; the latter
only has as yet been set up (1887) and is fixed at Zurich. All military
capitulations were forbidden in the future. Every canton must treat
Swiss citizens who belong to one of the Christian confessions like
their own citizens, for the right of free settlement is given to all such,
though they acquired no rights in the “commune.” All Christians were
guaranteed the exercise of their religion, but the Jesuits and similar
religious orders were not to be received in any canton. German,
French, and Italian were recognised as national languages.
The constitution as a whole marked a great step forward; though
very many rights were still reserved to the cantons, yet there was a
fully organised central government. Almost the first act of the federal
assembly was to exercise the power given them of determining the
home of the federal authorities, and on November 28th, 1848, Bern
was chosen, though Zurich still ranks as the first canton in the
confederation. By this early settlement of disputes Switzerland was
protected from the general revolutionary movement of 1848.
The federal constitution of 1848 set up a permanent federal
executive, legislature, and tribunal, each and all quite distinct from
and independent of any cantonal government. This system was a
modified revival of the state of things that had prevailed from 1798 to
1803, and was an imitation of the political changes that had taken
place in the cantonal constitutions after 1830. Both were victories of
the centralist or radical party, and it was therefore but natural that
this party should be called upon to undertake the federal government
under the new constitution, a supremacy that it has kept ever since.
To the centralists the council of states (two members from each
canton, however large or small) has always been a stumbling-block,
and they have mockingly nicknamed it “the fifth wheel of the coach.”
In the other house of the federal legislature, the national council (one
member per twenty thousand, or fraction of over ten thousand of the
entire population), the radicals have always since its creation in 1848
had a majority. Hence, in the congress formed by both houses sitting
together, the radicals have had it all their own way. This is
particularly important as regards the election of the seven members
of the federal executive which is made by such a congress. Now the
federal executive (federal council) is in no sense a cabinet—i.e., a
committee of the party in the majority in the legislature for the time
being. In the Swiss federal constitution the cabinet has no place at
all. Each member of the federal executive is elected by a separate
ballot, and holds office for the fixed term of three years, during which
he cannot be turned out of office, while as yet but a single instance
has occurred of the rejection of a federal councillor who offered
himself for re-election.
Further, none of the members of the federal executive can hold a
seat in either house of the federal legislature, though they may
appear and speak (but not vote) in either, while the federal council as
such has not necessarily any common policy, and never expresses
its views on the general situation (though it does as regards
particular legislative and administrative measures) in anything
resembling the “speech from the throne” in England. Thus it seems
clear that the federal executive was intended by the federal
constitution of 1848 (and in this respect that of 1874 made no
change) to be a standing committee of the legislature as a whole, but
not of a single party in the legislature, or a “cabinet,” even though it
had the majority. Yet this rule of a single political party is just what
has taken place. Between 1848 and the end of 1899, thirty-six
federal councillors were elected (twenty-three from German-
speaking, eleven from French-speaking, and two from Italian-
speaking Switzerland, the canton of Vaud heading the list with
seven). Now of these thirty-six two only were not radicals, viz. M.
Ceresole (1870-75) of Vaud, who was a Protestant liberal-
conservative, and Herr Zemp (elected in 1891), a Romanist
conservative; yet the conservative minority is a large one, while the
Romanists form about two-fifths of the population of Switzerland.
But, despite this predominance of a single party in the federal
council, no true cabinet system has come into existence in
Switzerland, as members of the council do not resign even when
their personal policy is condemned by a popular vote, so that the
resignation of Herr Welti (a member of the federal council from 1866
to 1891), in consequence of the rejection by the people of his railway
policy, caused the greatest amazement and consternation in
Switzerland.
The chief political parties in the federal
[1891-1900 a.d.] legislature are the right, or conservatives
(whether Romanists or Protestants), the centre
(now often called “liberals,” but rather answering to the whigs of
English political language), the left (or radicals), and the extreme left
(or the socialists). In the council of states there is always a federalist
majority, since in this house the smaller cantons are on an equality
with the greater ones, each indifferently having two members. But in
the national council (147 elected members) there has always been a
radical majority over all other parties, the numbers of the various
parties after the triennial elections of 1899 being roughly as follows:
radicals, 86; socialists, 9; Centre, 19; and the Right, 33. The
socialists long worked under the wing of the radicals, but now in
every canton (save Geneva) the two parties have quarrelled, the
socialist vote having largely increased. In the country the anti-radical
opposition is made up of the conservatives, who are strongest in the
Romanist, and especially the forest cantons, and of the “federalists”
of French-speaking Switzerland. There is no doubt that the people
are really anti-radical, though occasionally led away by the
experiments made recently in the domain of state socialism: they
elect, indeed, a radical majority, but very frequently reject the bills
laid before them by their elected representatives.
From 1885 onwards Switzerland had some troubles with foreign
powers owing to her defence of the right of asylum for fugitive
German socialists, despite the threats of Prince Bismarck, who
maintained a secret police in Switzerland, one member of which,
Wohlgemuth, was expelled in 1889, to the prince’s huge but useless
indignation. From about 1890, as the above troubles within and
without gradually subsided, the agitation in the country against the
centralising policy of the radicals became more and more strongly
marked. By the united exertions of all the opposition parties, and
against the steady resistance of the radicals, an amendment was
introduced in 1891 into the federal constitution, by which fifty
thousand Swiss citizens can by the “initiative” compel the federal
legislature and executive to take into consideration some point in the
federal constitution which, in the opinion of the petitioners, requires
reform, and to prepare a bill dealing with it which must be submitted
to a popular vote. Great hopes and fears were entertained at the
time as to the working of this new institution, but both have been
falsified, for the initiative has as yet only succeeded in inserting (in
1893) in the federal constitution a provision by which the Jewish
method of killing animals is forbidden. On the other hand, it has
failed (in 1894) to secure the adoption of a socialist scheme by which
the state was bound to provide work for every able-bodied man in
the country, and (also in 1894) to carry a proposal to give to the
cantons a bonus of two francs per head of the population out of the
rapidly growing returns of the customs duties.
The great rise in the productiveness of these duties has tempted
the Swiss people of late years to embark on a course of state
socialism, which may be also described as a series of measures
tending to give more and more power to the central federal
government at the expense of the cantons. So, in 1890, the principle
of compulsory universal insurance against sickness and accidents
was accepted by a popular vote, in 1891 likewise that of a state or
federal bank, and in 1898 that of the unification of the cantonal laws,
civil and criminal, into a set of federal codes. In each case the
federal government and legislature were charged with the
preparation of laws carrying out in detail these general principles.
But in 1897 their proposals as to a federal bank were rejected by the
people, while at the beginning of 1900 the suspicion felt as to the
insurance proposals elaborated by the federal authorities was so
keen that a popular demand for a popular vote was signed by
115,000 Swiss citizens, the legal minimum being only 30,000: they
were rejected (20th of May, 1900) on a popular vote by a two to one
majority. The preparation of the federal codes has progressed
quietly, drafts being framed by experts and then submitted for
criticism to special commissions and public opinion. But this method,
though the true one to secure the evolving of order out of chaos,
takes time.
By a popular vote in 1887 the federal authorities were given a
monopoly of alcohol, but a proposal to deal similarly with tobacco
has been very ill received (though such a monopoly would
undoubtedly produce a large amount), and would pretty certainly be
refused by the people if a popular vote were ever taken upon it. In
1895 the people declined to sanction a state monopoly of matches,
even though the unhealthy nature of the work was strongly urged,
and have also resolutely refused on several occasions to accept any
projects for the centralising of the various branches of military
administration, etc. Among other reforms which have recently been
much discussed in Switzerland are the introduction of the obligatory
referendum (which hitherto has applied only to amendments to the
federal constitution) and the initiative (now limited to piecemeal
revision of the federal constitution) to all federal laws, etc., and the
making large federal money grants to the primary schools (managed
by the several cantons). The former scheme is an attempt to restrain
important centralising measures from being presented as laws (and
as such exempt from the compulsory referendum), and not as
amendments to the federal constitution, while the proposed school
grant is part of the radical policy of buying support for unpopular
measures by lavish federal subventions, which it is hoped will
outweigh the dislike of the cantons to divest themselves of any
remaining fragments of their sovereignty.e
BRIEF REFERENCE-LIST OF AUTHORITIES BY
CHAPTERS
[The letter a is reserved for Editorial Matter.]
Transcriber’s Note: Chapters I-IV are not in this volume.
Chapter I. Switzerland to the Founding of the

Confederation (earliest times to 1291 a.d.)
b Strabo, Geographica.
c John Wilson, History of Switzerland (in the “Cabinet
Cyclopædia”).
d Ferdinand Keller, Pfahlbauten.
e Frederic Troyon, Habitations lacustres.
f Victor Gross, Les Proto-helvétes.
g Elisée Reclus, The Lacustrian Cities of Switzerland (in
Smithsonian Report for 1861).
h G. O. Montelius, De Chronologie der Pfahlbauten in
Mittheilungen der Anthropologischen Gesellschaft in Wien. Vol. XXX.
i John Lubbock, Prehistoric Times.
j T. Studer, Pfahlfan Bevölkering in Zeit für Ethr. Verband, 1885.
k Rudolf Virchow, in letter prefixed to V. Gross, Les Proto-
helvétes.
l Robert Munro, The Lake Dwellings of Europe.
m A. Vieusseux, The History of Switzerland.
n Michael Stettler, Annales.
o Johann von Müller, Geschichte der Schweizerischen
Eidgenossenschaft.
p Alexandre Daguet, Histoire de la Confédération Suisse.
Chapter II. The Rise of The Swiss Confederation (1288-1402

a.d.)
c E. A. Freeman, The Historical Geography of Europe.

d A. Rilliet, Les Origines de la Confédération Suisse.
e J. Dierauer, Geschichte der Schweizerischen
Eidgenossenschaft.
f W. A. B. Coolidge, History of Switzerland in Encyclopædia
Britannica.
g K. Dändliker, Histoire du Peuple Suisse.
k J. Von Müller, Geschichte der Schweizerischen
Eidgenossenschaft.
lG. Meyer von Knonau, Die Sage von der Befreiung der
Waldstätte, in Sweizer Oeffentliche Vorträge.
m A. Huber, Die Waldstätte, Uri, Sweiz, Unterwalden, etc.
n R. von Radegg, Capella Eremitana.
o John of Winterthur, Chronikon Vitodurani in W. Oechsli’s
Anfänge der Schweizerischen Eidgenossenschaft.
p W. Oechsli, Quellenbuch zur Schweizer Geschichte.
q A. Vieusseux, The History of Switzerland.
r J. Wilson, History of Switzerland.
s J. Vulliemin, Histoire de la Confédération Suisse.
Chapter III. The Confederation at the Height of its Power

(1402-1516 a.d.)
b W. A. B. Coolidge, Switzerland, in Encyclopædia Britannica.

c A. Vieusseux, The History of Switzerland.
d Vulliemin, Histoire de la Confédération Suisse.
e A. Dauget, Histoire de la Confédération Suisse.
f A. Morin, Précis de l’Histoire.
g Wilson.
h P. Verri, Storia di Milano.
i F. Guicciardin, Historia di Milano.
Chapter IV. The Sixteenth and Seventeenth Centuries
b A. Vieusseux, The History of Switzerland.

c J. K. L. Gieseler, Compendium of Ecclesiastical History.
d J. Wilson, History of Switzerland.
e J. Strickler, Grundniss der Schweizer-Geschichte.
f Maguenot, Abrége de l’Histoire de la Suisse.
g Daguet, Histoire de la Confédération.
Chapter V. The Eighteenth Century
b Johann Heinrich Daniel Zschokke, Des Schweizerlandes

Geschichte.
c J. Wilson, History of Switzerland.
d A. Vieusseux, The History of Switzerland.
e K. Dändliker, History of Switzerland.
f A. Daguet, Histoire de la Confédération.
g R. Weiss, Coup d’œil sur les relations politiques entre la
république Française et le corps Helvétique (1793).
h R. Weiss, Réveillez-vous, Suisses, le danger approche.
i W. Coxe, A History of the House of Austria.
Chapter VI. Switzerland Since 1798
b J. Wilson, History of Switzerland.

c W. Müller, Politische Geschichte der Neuersten Zeit.
d Vulliemin, Histoire de la Confédération Suisse.
e W. A. B. Coolidge, article on Switzerland in Encyclopædia
Britannica.
A GENERAL BIBLIOGRAPHY OF SWISS
HISTORY
BASED ON THE WORKS QUOTED, CITED, OR

CONSULTED IN THE PREPARATION OF THE
PRESENT WORK; WITH CRITICAL AND
BIOGRAPHICAL NOTES
Adams, F. O., and C. D. Cunningham, The Swiss Confederation,

London, 1889.—Ah, J. J. von, Die Bundesbriefe der ältern
Eidgenossen, Einsiedeln, 1891.—Alt, F. N. de, Histoire de la Suisse,
Fribourg, 1750-1755, 10 vols.
François Joseph Nicholas, baron of Alt, the son of an ancient
patrician family of Fribourg, Switzerland, was born in 1689, and died
in 1771. His history, which was admirably planned, would have
greater value for the general student if much of the extraneous
matter and all the violent Catholic partisanship were eliminated.
Amtliche Sammlung der Akten aus der Zeit der Helvetischen
Republik, 2 vols., translated by J. Strickler, Bern, 1886-1890, 4 vols.
—Amtliche Sammlung der ältern eidgenössischen Abschiede
1245-1798, 1839-1856, 8 vols. Reports of the old Federal diets,
containing an enormous amount of historical matter.—Anshelm,
Berner-Chronik, Bern, 1825-1833, 6 vols.—Arx, J. von, Geschichte
von St. Gallen, St. Gallen, 1810, 2 vols.—Aubigné, T. A. d’, Histoire
Universelle 1550-1601, Geneva, 1626, 3 vols.
Théodore Agrippa d’Aubigné, one of the most notable characters
of the sixteenth century, was born at St. Maury, near Pons, February
8th, 1550, of an old and noble family which had embraced the
religion of the Calvinists. The young d’Aubigné neglected none of the
educational opportunities afforded him by his father, and at the age
of six was already able to read Latin, Greek and Hebrew. At thirteen
he escaped from the restraints of his tutor to take part in the siege of
Orléans. After his father’s death he won reputation as a warrior
under the prince of Condé, and later entered the service of the king
of Navarre. In the wars of Henry IV for the recovery of his kingdom,
d’Aubigné further distinguished himself; but he was finally obliged by
the enmity of the queen-mother to retire from the court. During his
exile he composed the history of his time, a work remarkable for its
fearless frankness. The first two volumes were printed without
opposition; but the third was condemned on account of its merciless
criticisms. D’Aubigné, however, caused it to be printed, thereby
incurring the burning of all three volumes; the confiscation of all his
goods, and the savage persecution of his later years, until his death
at Geneva, April 29, 1630.
Bachtold, J., and F. Vetter, Bibliotek älterer Schriftwerke der

deutschen Schweiz, Frauenfeld, 1882-1884, 5 vols.—Baker, T. G.,
The Model Republic, London, 1895.—Baebler, J. J., Die alten
eidgenössischen Bunde, St. Gall., 1848.—Baumgartner, G. J., Die
Schweiz in ihren Kämpfen und Umgestaltungen, 1830-1850, Zurich,
1853-66, 4 vols.; Erlebnisse auf dem Felde der Politik,
Schaffhausen, 1844; Geschichte Spaniens zur Zeit der französichen
Revolution, Berlin, 1861; Geschichte des Schweiz Freistaats und
Kantons St. Gallen, Zurich, 1868, 2 vols.—Berchtold, J., Histoire du
canton de Fribourg, Fribourg, 1841-1845.—Berthold, de Constance,
continuator of the Chronicon de sex ætatibus mundi.—Blochmann,
C. J., Heinrich Pestalozzi, Leipsic, 1846.—Bloesch, E., Rapport sur
les affaires communales Berne, 1851.—Blumer, J. J., Staats- und
Rechtsgeschriften der Schweiz. Demokratien, St. Gallen, 1850-59, 3
vols.; Handbuch des schweiz. Bundesstaatsrechts, Schaffhausen,
1877-87, 13 vols.—Bluntschli, J. K., Geschichte des schweiz.
Bundesrechts, Stuttgart, 1875, 2 vols.; Staats- und Rechtsgeschichte
der Stadt und Landschaft Zurich, Zurich, 1838, 2 vols.—Bohmer, J.
F., Regesta Karolorum, Frankfort, 1833.—Bonivard, F., Les
Chroniques de la Genève, Geneva, 1831, 2 vols.
François Bonivard, to whom we owe the vivid pictures of the
agitations which marked the beginning of the sixteenth century, was

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Cost Accounting A Managerial Emphasis Canadian 8th Edition Horngren Solutions Manual Instant Download All Chapter

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Copyright:

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Cost Accounting A Managerial

Emphasis Canadian 8th Edition

Cost Accounting A Managerial Emphasis Canadian 7th

Cost Accounting A Managerial Emphasis Canadian 6th

Cost Accounting A Managerial Emphasis 13th Edition

Cost Accounting A Managerial Emphasis 2nd Edition

Cost Accounting A Managerial Emphasis Canadian 15th

Cost Accounting A Managerial Emphasis Canadian 6th

Cost Accounting A Managerial Emphasis Canadian 7th

Cost Accounting A Managerial Emphasis 14th Edition

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6-8 The steps in preparing an operating budget are:

6-10 Sensitivity analysis adds an extra dimension to budgeting. It enables managers to

6-14 Equal or across-the-board reductions is a strategy that penalizes honest business

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6-16 (15 min.) Responsibility and controllability.

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Dyeing budgeted = $12,809,000 = $28.4644 per MH

3. Budgeted unit cost of blue rug

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5a. Cost of goods sold budget

5b. Cost of Goods Sold Budget

Cost of goods sold $115,832,750

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6-18 (15 min.) Sales budget, service setting.

McGrath & Sons Sales Budget

Selling Price Units Sold Total Revenue

6-19 (5 min.) Sales and production budget.

Budgeted sales in units 135,000

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6-20 (5 min.) Direct materials budget.

Direct materials to be used in production (bottles) 2,100,000

6-21 (10 min.) Budgeting material purchases.

6-22 (30 min.) Revenues and production budget.

2. Budgeted unit sales (12-ounce bottles) 6,000,000

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3. Beginning = Budgeted + Target  Budgeted

2. Weaving budgeted = $31, 620, 000

Dyeing budgeted = $17, 280, 000 = $12 per MH

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From Schedule Total

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From Schedule Total

Sales = 185,000 rugs

From Schedule Total

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6-24 (15-20 min.) Revenue, production, and purchases budget.

1. 985,000 motorcycles  505,000 yen = 497,425,000,000 yen

2. Budgeted sales (units) 985,000

3. Direct materials to be used in production, 948,000  2 1,896,000

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6-26 (30 min.) Cash flow analysis.

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6-27 (20-30 min.) Activity-based budgeting.

Total budgeted indirect costs $3,408 $17,012 $6,727 $27,147

Percentage of total indirect costs 13% 63% 25%

Cost Soft Fresh Packaged

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