Exam 22: Master Budgets and Planning

The ___________________________ shows the budgeted costs for factory overhead that will be needed to complete the estimated production for the period,often separated into variable and fixed costs.

Which of the following is not a result of following a well-designed budgeting process?

Walter Enterprises expects its September sales to be 20% higher than its August sales of $150,000.Purchases 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.Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month.The beginning cash balance on September 1 is $7,500.The ending cash balance on September 30 would be:

A budget can be an effective means of communicating management's plans to the employees of a business.

Alliance Company's budgets production of 24,000 units in January and 28,000 units in the February.Each finished unit requires 4 pounds of raw material K that costs $2.50 per pound.Each month's ending raw materials inventory should equal 40% of the following month's budgeted materials.The January 1 inventory for this material is 38,400 pounds.What is the budgeted materials need in pounds for January?

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

Activity-based budgeting is a budget system based on expected activities and their levels for the budget period,which helps management plan for the resources required.

Southland Company is preparing a cash budget for August.The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash disbursements during August.Southland Company wants to maintain a minimum cash balance of $10,000.To maintain the minimum cash balance of $10,000,the company must borrow:

Ratchet Manufacturing's August sales budget calls for sales of 8,000 units.Each month's sales are expected to exceed the prior month's results by 5%.The product selling price is $25 per unit.The expected total sales dollars for September's sales budget are:

Webster Corporation's monthly projected general and administrative expenses include $5,000 administrative salaries,$2,400 of other cash administrative expenses,$1,350 of depreciation expense,and 0.5% monthly interest on an outstanding bank loan of $10,000.Compute the total general and administrative expenses to be reported on the general and administrative expense budget per month.

Bioclean Co.sells a biodegradable cleaning product and has predicted the following sales for the first four months of the current year: Ending inventory for each month should be 20% of the next month's sales,and the December 31 inventory is consistent with that policy.How many units should be purchased in February?

A plan showing the planned sales units and the revenue to be derived from these sales,and is the usual starting point in the budgeting process,is called the:

Which of the following is a benefit derived from budgeting?

Zhang Industries budgets production of 300 units in June and 310 units in July.Each finished unit requires 4 pounds of raw material K,which costs $5 per pound.Each month's ending inventory of raw materials should be 30% of the following month's budgeted production.The June 1 raw materials inventory has 360 pounds of raw material K.Compute budgeted purchases for raw material K for June.

When preparing the cash budget,all of the following should be considered except:

Assuming a bottom-up process of budget development,which of the following should be initially responsible for developing sales estimates?

A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:

Use the following information to prepare the June cash budget for Springer Company.It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30. a.Beginning cash balance on June 1 is $52,000. b.Cash receipts from sales are expected to be $1,625,000. c.Cash payments for direct materials and direct labor are expected to be $246,500 and 573,100,respectively. d.Budgeted cash payments for variable overhead is $340,000. e.Budgeted depreciation,the only fixed overhead estimated for June: $24,000. f.Cash selling and administrative expenses budgeted for June are $282,000. g.Bank loan interest due in June: $8,000. h.Loan payment of $50,000 should be made if the preliminary cash balance is greater than $200,000.

Bengal Co.provides the following sales forecast for the next three months: The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales.Finished goods inventory on June 30 is 1,250 units.The budgeted production units for August are:

The master budget of a merchandising company includes a: