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Exam 7: Budgeting

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Question 31

Multiple Choice

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Which of the following would not be used in preparing a cash budget for October?

A) beginning cash balance on October 1
B) budgeted salaries expense for October
C) estimated depreciation expense for October
D) budgeted sales and collections for October

E) A) and B)
F) A) and C)

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Question 32

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When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.

A) True
B) False

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Question 33

Multiple Choice

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The budgetary unit of an organization which is led by a manager who has both the authority over and responsibility for the unit's performance is known as a

A formal written statement of management's plans for the future, expressed in financial terms, is a

For April, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $98,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of April are

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted sales for the month are

Estimated cash payments are planned reductions in cash from all of the following except

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A 0.50 lb. per unit @ $0.60 per pound Material B 1.00 lb. per unit @ $1.70 per pound Material C 1.20 lb. per unit @ $1.00 per pound The dollar amount of  Material C used in production during the year is

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections in November are

Good Night manufactures comforters.  The estimated inventories on January 1 for finished goods, work in process, and materials were $51,000, $28,000, and $33,000, respectively. The desired inventories on December 31 for finished goods, work in process, and materials were $48,000, $35,000, and $29,000, respectively. Direct material purchases were $555,000. Direct labor was $252,000 for the year. Factory overhead was $176,000. Prepare a cost of goods sold budget for Good Night, Inc.

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business-September, October, and November-are $260,000, $375,000, and $400,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in September from accounts receivable are estimated to be

Laurie Inc.'s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $25,000. A flexible budget for 12,000 units of production would show

Below is budgeted production and sales information for Bluebird Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $14. Budgeted production for product XXX during the month is

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

An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units.  Total October sales are anticipated to be

The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods, $765,000; December 31 finished goods, $540,000; and cost of goods sold for the year, $2,560,000. The budgeted costs of goods manufactured for the year is

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

The objectives of budgeting are: (1) establishing specific goals for future operations (2) executing plans to achieve the goals (3) periodically comparing actual results with these goals

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

A company is preparing its cash budget.  Its cash balance on January 1 is $290,000 and it has a minimum cash requirement of $340,000. The following data has been provided: What is the amount of cash excess or deficiency (after considering the minimum cash balance required) for March?