Exam 8: Budgetary Planning

Grover has forecast sales to be $125,000 in February,$135,000 in March,$150,000 in April,and $140,000 in May.The average cost of goods sold is 70% of sales.All sales are made on credit and sales are collected 60% in the month of sale,and 40% the month following.What are budgeted cash receipts in April?

Harney,Inc.has prepared the following budgets for March.In March,budgeted production equals budgeted sales,and direct materials inventory will stay constant. What is budgeted cost of goods sold for March?

The production budget must be prepared before the sales budget can be prepared.

Larken has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Larken's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Monthly manufacturing overhead is budgeted to be $17,000 plus $6 per unit produced.What is budgeted manufacturing overhead for August?

Maple Inc.produces wooden boxes.The production budget for the next three months is: July 15,000 units,August 17,000,September 17,500.Each box requires three skill levels: 1.0 hours of unskilled labor (paid $8 per hour),1.5 hours of semi-skilled labor (paid $10)and 2.0 hours of skilled labor (paid $15 per hour). Required: Prepare a labor budget for the three months July - September.Provide the labor requirements according to skill level in hours and in labor cost as well as in total.Provide the budget monthly as well as a total for the quarter.

The formula for budgeted direct materials purchases is:

Walnut has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Walnut's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Selling and administrative costs are budgeted to be $15,000 per month plus $5 per unit sold.What are budgeted selling and administrative expenses for July?

Lea Company produces hand tools.Budgeted sales for March are 10,000 units.Beginning finished goods inventory in March is budgeted to be 1,300 units,and ending finished goods inventory is budgeted to be 1,400 units.How many units will be produced in March?

Participative budgeting allows employees throughout the organization to have input into the budget-setting process.

Meredith Company has budgeted sales for the upcoming months as follows: Forty percent of the sales are credit sales,the remainder are made in cash.Credit sales are collected 50% in the month of sale,40% in the month following the sale,and 8% in the second month following the sale. a.Compute Meredith Company's cash receipts for June. b.Compute Meredith Company's cash receipts for July. c.Compute Meredith Company's cash receipts for August.

Walnut has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Walnut's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Selling and administrative costs are budgeted to be $15,000 per month plus $5 per unit sold.What are budgeted selling and administrative expenses for September?

Which of the following is not a source that can be used in preparing the sales budget?

Which of the following is the backward-looking phase of the planning and control cycle?

Ebony Co.has forecast sales to be $300,000 in May,$375,000 in June,$475,000 in July and $600,000 in August.Forty percent of sales are made in cash,the remainder is on account.Credit sales are partially collected in the month of sale,with all collections completed by the end of the month following the sale.The August 31 accounts receivable is budgeted to be $108,000.What are budgeted cash collections for July?

Grover has forecast sales to be $125,000 in February,$135,000 in March,$150,000 in April,and $140,000 in May.The average cost of goods sold is 70% of sales.All sales are on made on credit and sales are collected 60% in the month of sale,and 40% the month following.What are budgeted cash receipts in March?

Participative budgeting is an approach to budgeting that:

Audrey has forecast sales to be $205,000 in February,$270,000 in March,$290,000 in April,and $310,000 in May.The average cost of goods sold is 60% of sales.All sales are made on credit and sales are collected 50% in the month of sale,30% the month following and the remainder two months after the sale.What is the budgeted Accounts Receivable balance on May 31?

Crystal,Inc.has prepared the following budgets for March.In March,budgeted production is 1,000 units,budgeted sales is 1,200 units,and direct materials inventory will stay constant. What is budgeted cost of goods sold for March?

Which of the following statements is true about the strategic plan?

Willow Products expects the following sales of its single product: Willow Products desires an ending finished goods inventory to be equal to 30% of the next month's sales needs.Actual March 1 inventory is projected to be 1,300 units. Required: Prepare a production budget for Willow Products for as many months as is possible.