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Exam 21: Budgeting

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Question 1

Multiple Choice

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The cash payments for Finch Company expected in the month of June are

A) $215,500
B) $188,800
C) $214,000
D) $212,000

E) C) and D)
F) B) and C)

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Question 2

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Flexible budgeting builds the effect of changes in level of activity into the budget system.

A) True
B) False

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Question 3

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The production budget is the starting point for preparation of the direct labor cost budget.

Gilbert's expects its September sales to be 20% higher than its August sales of $150,000.Manufacturing costs were $100,000 in August and are expected to be $120,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Payments of manufacturing costs are as follows: 25% in the month of production and 75% in the following month.The beginning cash balance on September 1 is $7,500.The ending balance on September 30 would be

What is the budgeted units of production for March?

The first budget to be prepared is usually the sales budget.

Based on the following production and sales data of Frixion Co.for March of the current year,prepare (a)a sales budget and (b)a production budget.

Truliant Co.sells a product called Withitall and has predicted the following sales for the first four months of the current year: ​ Ending inventory for each month should be 20% of next month's sales.How many units should be produced in February?

At the beginning of the period,the Molding Department budgeted direct labor of $33,000 and supervisor salaries of $24,000 for 3,000 hours of production.The department actually completed 2,500 hours of production.Determine the budget for the department assuming that it uses flexible budgeting?

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called master budgeting.

Total budgeted sales of both products for the year would be

The budgeted balance sheet assumes that all operating and financing plans are met.

The budgeted volume of production is normally computed as the sum of (1)the expected sales volume and (2)the desired ending inventory.

The master budget of a small manufacturer would normally include all component budgets that impact on the financial statements.

Which of the following budgets provides the starting point for the preparation of the direct labor cost budget?

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

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

Budgeted production for product XXX during the month is

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials,$44,000 for direct labor,variable utilities of $5,000,and supervisor salaries of $24,000.A flexible budget for 12,000 units of production would show