Exam 20: Budgetary Planning

If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?

Comma Manufacturing budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2016 to June 30, 2017: Three kilos of raw materials are needed to produce each unit of finished product. If Comma Manufacturing plans to produce 560,000 units during the 2016-2017 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During August, the following items were budgeted: Wages Expense \ 150,000 Purchase of office equipment 72,000 Selling and Administrative Expenses 48,000 Depreciation Expense 36,000 The budgeted cash disbursements for August are

Which of the following does not appear as a separate section on the cash budget?

Financial budgets must be completed before the operating budgets can be prepared.

Long-range plans are used more as a review of progress toward long-term goals rather than an evaluation of specific results to be achieved.

Which of the following statements is incorrect?

The budget committee in a company is often headed by the

The number of direct labor hours needed for production is obtained from the production budget.

Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered.

The direct materials budget shows: Units to be produced $\quad\quad\quad\quad\quad\quad 3,000$ Total pounds needed for production $\quad 9,000$ Total materials required $\quad\quad\quad\quad\quad 9,900$ What are the direct materials per unit?

A common starting point in the budgeting process is

A critical factor in budgeting for a service firm is to

Which of the following is done to improve the reliability of the sales forecast?

For better management acceptance, the flow of input data for budgeting should begin with the

The direct materials budget details 1. the quantity of direct materials to be purchased. 2. the cost of direct materials to be purchased.

The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than

A company budgeted unit sales of 204,000 units for January, 2017 and 240,000 units for February 2017. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 61,200 units of inventory on hand on December 31, 2016, how many units should be produced in January, 2017 in order for the company to meet its goals?

Which one of the following is not needed in preparing a production budget?

A budget is most likely to be effective if