Exam 9: Profit Planning

Which of the following appears on the budgeted balance sheet?

Which of the following is an advantage of participative budgeting?

Figure 9-5. Sully Company provided the following information for last month. There were no beginning and ending inventories. Refer to Figure 9-5.What is gross margin for Sully Company last month?

CutMaster Salons anticipates giving 100 permanents in May,130 in June,and 120 in July.CutMaster needs one permanent wave kit for each perm,along with two boxes of wave tissues.Its inventory policy is to have 10 percent of the following month's materials needs on hand.On May 1,there were 15 wave kits and four boxes of wave tissues on hand.(Round any fractions of a unit to the nearest whole unit.)

Schrandt Company,an importer and retailer of Polish pottery and kitchenware,prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows: Actual sales for June and budgeted sales for July,August,and September are given below: Sales are 20 percent for cash and 80 percent on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 40 percent of sales.The desired ending inventory is equal to 25 percent of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000,and the monthly depreciation expenses are $7,000. What is the balance of the accounts receivable at the end of July?

Bank loan officers would find which of the following budgets to be one of the most important in determining whether or not to give a company a loan?

The planned ending cash balance for the year appears on which of the following statements?

Allison Company makes luggage.One popular model is the Traveler (a 21" wheeled carry-on).Budgeted sales for this model are: Desired ending inventory is 20 percent of the next month's sales.Inventory on March 1 is 3,100 units.Prepare a production budget for as many months as possible.

Karam Inc.has compiled the following data in order to put together their first quarter operating budget for 2011: Additional information: Karam sells each unit for $95. Company policy is to have 30 percent of next month's sales (in units)in ending finished goods inventory.This policy was met in December. Company policy is to have 40 percent of next month's production needs in ending raw materials inventory.The production needs for April is 95,500.This policy was met in December. It takes three pounds of material to produce each unit and the cost is $2.75/pound. Required: A.Prepare a sales budget for the January,February and March and for the first quarter in total. B.Prepare a production budget for January,February and March and for the first quarter in total. C.Prepare a direct materials purchases budget for January,February and March and for the first quarter in total.

The ____ is the person responsible for directing and coordinating the organization's overall budget process.

Does a not-for-profit agency need to budget? Why or why not?

What is the formula used to compute the units to be produced?

____________________ is individual behavior that is in basic conflict with the goals of the organization.

Budgets are financial plans for the future.

The _______________ tells how many units must be produced to meet sales needs and to satisfy ending inventory requirements.

Fredder Company usually sells about 20 percent of its merchandise during a month for cash with the remaining sales on account.The company's accounts receivable payment history is as follows: 30 percent in the month of sale,50 percent in the month following,and 15 percent in the second month following sale.Total budgeted sales for the second quarter are as follows: Assume all questions relate to the month of June.

When top management assumes total control of the budgeting process and only seeks superficial participation from lower-level managers this is known as ________________.

There are as many direct materials purchases budgets as there are products.

Which budget is the first one that must be completed in the master budgeting process and why?

Figure 9-5. Sully Company provided the following information for last month. There were no beginning and ending inventories. Refer to Figure 9-5.What is Sully's cost of goods sold per unit?